SB 125: Health care coverage.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2015-06-17
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans or insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. PPACA, in connection with state health benefit exchanges, defines a small employer to mean an employer who employed an average of at least one but not more than 100 employees on business days during the preceding calendar year, and requires the number of employees, for purposes of determining the size of the employer, to be determined using a counting method in which full-time equivalents are treated as full-time employees for plan years beginning on or after January 1, 2016.
Existing law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the purchase of qualified health plans through the Exchange by qualified individuals and small employers. Existing law requires, on and after October 1, 2013, a health care service plan or health insurer to fairly and affirmatively offer, market, and sell all of the plans or insurers small employer plan contracts or health benefit plans for plan years on or after January 1, 2014, to all small employers in each service area or geographic region in which the plan or insurer provides or arranges for health care services or benefits. For plan years commencing on or after January 1, 2016, existing law defines a small employer to mean any person, firm, proprietary or nonprofit organization, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50% of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible full-time employees, as specified.
This bill would revise the definition of small employer, for plan years commencing on or after January 1, 2016, to instead require the use of the full-time equivalent employee counting method for determining the size of the employer, as specified under PPACA.
(3)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of January 1, 2018.
(4)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.
(5)This bill would declare that it is to take effect immediately as an urgency statute.
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans or insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. PPACA, in connection with state health benefit exchanges, defines a small employer to mean an employer who employed an average of at least one but not more than 100 employees on business days during the preceding calendar year, and requires the number of employees, for purposes of determining the size of the employer, to be determined using a counting method in which full-time equivalents are treated as full-time employees for plan years beginning on or after January 1, 2016.
Existing law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the purchase of qualified health plans through the Exchange by qualified individuals and small employers. Existing law requires, on and after October 1, 2013, a health care service plan or health insurer to fairly and affirmatively offer, market, and sell all of the plans or insurers small employer plan contracts or health benefit plans for plan years on or after January 1, 2014, to all small employers in each service area or geographic region in which the plan or insurer provides or arranges for health care services or benefits. For plan years commencing on or after January 1, 2016, existing law defines a small employer to mean any person, firm, proprietary or nonprofit organization, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50% of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible full-time employees, as specified.
This bill would revise the definition of small employer, for plan years commencing on or after January 1, 2016, to instead require the use of the full-time equivalent employee counting method for determining the size of the employer, as specified under PPACA.
(3)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of January 1, 2018.
(4)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.
(5)This bill would declare that it is to take effect immediately as an urgency statute.
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. PPACA, in connection with state health benefit exchanges, defines a small employer to mean an employer who employed an average of at least one but not more than 100 employees on business days during the preceding calendar year, and requires the number of employees, for purposes of determining the size of the employer, to be determined using a counting method in which full-time equivalents are treated as full-time employees for plan years beginning on or after January 1, 2016.
Existing law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the purchase of qualified health plans through the Exchange by qualified individuals and small employers. Existing law requires, on and after October 1, 2013, a health care service plan or health insurer to fairly and affirmatively offer, market, and sell all of the plans or insurers small employer plan contracts or health benefit plans for plan years on or after January 1, 2014, to all small employers in each service area or geographic region in which the plan or insurer provides or arranges for health care services or benefits. For plan years commencing on or after January 1, 2016, existing law defines a small employer to mean any person, firm, proprietary or nonprofit organization, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50% of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible full-time employees, as specified.
This bill would revise the definition of small employer, for plan years commencing on or after January 1, 2016, to instead require the use of the full-time equivalent employee counting method for determining the size of the employer, as specified under PPACA.
(3)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of January 1, 2018.
(4)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.
(5)This bill would declare that it is to take effect immediately as an urgency statute.
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. PPACA, in connection with state health benefit exchanges, defines a small employer to mean an employer who employed an average of at least one but not more than 100 employees on business days during the preceding calendar year, and requires the number of employees, for purposes of determining the size of the employer, to be determined using a counting method in which full-time equivalents are treated as full-time employees for plan years beginning on or after January 1, 2016.
Existing law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the purchase of qualified health plans through the Exchange by qualified individuals and small employers. Existing law requires, on and after October 1, 2013, a health care service plan or health insurer to fairly and affirmatively offer, market, and sell all of the plans or insurers small employer plan contracts or health benefit plans for plan years on or after January 1, 2014, to all small employers in each service area or geographic region in which the plan or insurer provides or arranges for health care services or benefits. For plan years commencing on or after January 1, 2016, existing law defines a small employer to mean any person, firm, proprietary or nonprofit organization, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent 50% of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible full-time employees, as specified.
This bill would revise the definition of small employer, for plan years commencing on or after January 1, 2016, to instead require the use of the full-time equivalent employee counting method for determining the size of the employer, as specified under PPACA.
(3)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of January 1, 2018.
(4)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.
(5)This bill would declare that it is to take effect immediately as an urgency statute.
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. PPACA, in connection with state health benefit exchanges, defines a small employer to mean an employer who employed an average of at least one but not more than 100 employees on business days during the preceding calendar year, and requires the number of employees, for purposes of determining the size of the employer, to be determined using a counting method in which full-time equivalents are treated as full-time employees for plan years beginning on or after January 1, 2016.
Existing law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the purchase of qualified health plans through the Exchange by qualified individuals and small employers. Existing law requires, on and after October 1, 2013, a health care service plan or health insurer to fairly and affirmatively offer, market, and sell all of the plans or insurers small employer plan contracts or health benefit plans for plan years on or after January 1, 2014, to all small employers in each service area or geographic region in which the plan or insurer provides or arranges for health care services or benefits. For plan years commencing on or after January 1, 2016, existing law defines a small employer to mean any person, firm, proprietary or nonprofit organization, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible full-time employees, as specified.
This bill would revise the definition of small employer, for plan years commencing on or after January 1, 2016, to instead require the use of the full-time equivalent employee counting method for determining the size of the employer, as specified under PPACA.
(2)
(3)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of January 1, 2018.
(3)
(4)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.
(4)
(5)This bill would declare that it is to take effect immediately as an urgency statute.
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of January 1, 2018.
(3)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.
(4)This bill would declare that it is to take effect immediately as an urgency statute.
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from October 1 to December 15, November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of June 30, 2017. January 1, 2018.
(3)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.
(4)This bill would declare that it is to take effect immediately as an urgency statute.
(1)Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a plan or insurer to provide annual enrollment periods for policy years on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill would instead require that those annual enrollment periods extend from October 1 to December 15, inclusive. Because a willful violation of that requirement by a health care service plan would be a crime, the bill would impose a state-mandated local program.
(2)Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.
This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2017.
Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of December 31, 2015.
This bill would extend until June 30, 2017, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of June 30, 2017.
(3)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.
(4)This bill would declare that it is to take effect immediately as an urgency statute.
As used in this article, the following definitions shall apply:
(a)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(b)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health care service plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (m).
(c)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, at the small employers regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business and included as employees under a health care service plan contract of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are deemed to be eligible employees if all four of the following apply:
(A)They otherwise meet the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employees health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (m).
(d)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(e)In force business means an existing health benefit plan contract issued by the plan to a small employer.
(f)Late enrollee means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 1357.503. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations plan contract consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in the plan, except where that member or person qualifies for a special enrollment period provided pursuant to Section 1357.503.
(g)New business means a health care service plan contract issued to a small employer that is not the plans in force business.
(h)Preexisting condition provision means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollees effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. No health care service plan shall limit or exclude coverage for any individual based on a preexisting condition whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date.
(i)Creditable coverage means:
(1)Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the Public Health Service Act, as amended by Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(j)Rating period means the period for which premium rates established by a plan are in effect and shall be no less than 12 months from the date of issuance or renewal of the plan contract.
(k)(1)Small employer means any of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this paragraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (l), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining employer eligibility in the small employer market, shall be determined using the method for counting full-time employees and full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(l)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(m)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months.
(n)Affiliation period means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective.
(o)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(p)Nongrandfathered small employer health care service plan contract means a small employer health care service plan contract that is not a grandfathered health plan.
(q)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(r)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.
(s)Small employer health care service plan contract means a health care service plan contract issued to a small employer.
(t)Waiting period means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the contract.
(u)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(v)Family means the subscriber and his or her dependent or dependents.
(w)Health benefit plan means a health care service plan contract that provides medical, hospital, and surgical benefits for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or coverage under a specialized health care service plan contract.
SEC. 2.Section 1399.849 of the Health and Safety Code is amended to read:1399.849.(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 3.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where disparities in outcomes associated with the social determinants of health as well as gender, race, sexual orientation, or gender identity are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer-reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 4.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For the 201011 to 201617 fiscal years, inclusive, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 5.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 6.Section 127665 of the Health and Safety Code is repealed.SEC. 7.Section 127665 is added to the Health and Safety Code, to read:127665.This chapter shall become inoperative on July 1, 2017, and, as of January 1, 2018, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2018, deletes or extends the dates on which it becomes inoperative and is repealed.
SEC. 8.Section 10753 of the Insurance Code is amended to read:10753.(a)Agent or broker means a person or entity licensed under Chapter 5 (commencing with Section 1621) of Part 2 of Division 1.
(b)Benefit plan design means a specific health coverage product issued by a carrier to small employers, to trustees of associations that include small employers, or to individuals if the coverage is offered through employment or sponsored by an employer. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health care services which has significant incentives for the covered individuals to use the system.
(c)Carrier means a health insurer or any other entity that writes, issues, or administers health benefit plans that cover the employees of small employers, regardless of the situs of the contract or master policyholder.
(d)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(e)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health benefit plan covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (s).
(f)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, in the small employers regular place of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business, and they are included as employees under a health benefit plan of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. A permanent employee who works at least 20 hours but not more than 29 hours is deemed to be an eligible employee if all four of the following apply:
(A)The employee otherwise meets the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employee health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The insurer may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (s).
(g)Enrollee means an eligible employee or dependent who receives health coverage through the program from a participating carrier.
(h)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(i)Financially impaired means, for the purposes of this chapter, a carrier that, on or after the effective date of this chapter, is not insolvent and is either:
(1)Deemed by the commissioner to be potentially unable to fulfill its contractual obligations.
(2)Placed under an order of rehabilitation or conservation by a court of competent jurisdiction.
(j)Health benefit plan means a policy of health insurance, as defined in Section 106, for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, or coverage that provides excepted benefits, as described in Sections 2722 and 2791 of the federal Public Health Service Act, subject to Section 10701.
(k)In force business means an existing health benefit plan issued by the carrier to a small employer.
(l)Late enrollee means an eligible employee or dependent who has declined health coverage under a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in the plan, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05.
(m)New business means a health benefit plan issued to a small employer that is not the carriers in force business.
(n)Preexisting condition provision means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insureds effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage.
(o)Creditable coverage means:
(1)Any individual or group policy, contract, or program, that is written or administered by a health insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The federal Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subdivision (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(p)Rating period means the period for which premium rates established by a carrier are in effect and shall be no less than 12 months from the date of issuance or renewal of the health benefit plan.
(q)(1)Small employer means either of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a carrier shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health benefit plan to a small employer pursuant to this chapter, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this chapter, provisions of this chapter that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this subparagraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (r), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining employer eligibility in the small employer market, shall be determined using the method for counting full-time employees and full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(r)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria which (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (q), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has been offering health insurance to its members for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any benefit plan design that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the benefit plan design offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the carrier with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a master policy by an admitted insurer is delivered directly to the association or a trust formed for or sponsored by an association to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(s)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it may also include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include those persons as members of the guaranteed association, the association must so elect in advance of purchasing coverage from a plan. Health plans may require an association to adhere to the membership composition it selects for up to 12 months.
(t)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(u)Nongrandfathered health benefit plan means a health benefit plan that is not a grandfathered health plan.
(v)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(w)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.
(x)Waiting period means a period that is required to pass with respect to the employee before the employee is eligible to be covered for benefits under the terms of the contract.
(y)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(z)Family means the policyholder and his or her dependents.
SEC. 9.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 10.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.
SEC. 11.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
As used in this article, the following definitions shall apply:
(a)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(b)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health care service plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (m).
(c)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, at the small employers regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business and included as employees under a health care service plan contract of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are deemed to be eligible employees if all four of the following apply:
(A)They otherwise meet the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employees health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (m).
(d)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(e)In force business means an existing health benefit plan contract issued by the plan to a small employer.
(f)Late enrollee means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 1357.503. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations plan contract consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in the plan, except where that member or person qualifies for a special enrollment period provided pursuant to Section 1357.503.
(g)New business means a health care service plan contract issued to a small employer that is not the plans in force business.
(h)Preexisting condition provision means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollees effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. No health care service plan shall limit or exclude coverage for any individual based on a preexisting condition whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date.
(i)Creditable coverage means:
(1)Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the Public Health Service Act, as amended by Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(j)Rating period means the period for which premium rates established by a plan are in effect and shall be no less than 12 months from the date of issuance or renewal of the plan contract.
(k)(1)Small employer means any of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this paragraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (l), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining employer eligibility in the small employer market, shall be determined using the method for counting full-time employees and full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(l)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(m)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months.
(n)Affiliation period means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective.
(o)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(p)Nongrandfathered small employer health care service plan contract means a small employer health care service plan contract that is not a grandfathered health plan.
(q)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(r)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.
(s)Small employer health care service plan contract means a health care service plan contract issued to a small employer.
(t)Waiting period means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the contract.
(u)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(v)Family means the subscriber and his or her dependent or dependents.
(w)Health benefit plan means a health care service plan contract that provides medical, hospital, and surgical benefits for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or coverage under a specialized health care service plan contract.
SEC. 2.Section 1399.849 of the Health and Safety Code is amended to read:1399.849.(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 3.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where disparities in outcomes associated with the social determinants of health as well as gender, race, sexual orientation, or gender identity are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer-reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 4.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For the 201011 to 201617 fiscal years, inclusive, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 5.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 6.Section 127665 of the Health and Safety Code is repealed.SEC. 7.Section 127665 is added to the Health and Safety Code, to read:127665.This chapter shall become inoperative on July 1, 2017, and, as of January 1, 2018, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2018, deletes or extends the dates on which it becomes inoperative and is repealed.
SEC. 8.Section 10753 of the Insurance Code is amended to read:10753.(a)Agent or broker means a person or entity licensed under Chapter 5 (commencing with Section 1621) of Part 2 of Division 1.
(b)Benefit plan design means a specific health coverage product issued by a carrier to small employers, to trustees of associations that include small employers, or to individuals if the coverage is offered through employment or sponsored by an employer. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health care services which has significant incentives for the covered individuals to use the system.
(c)Carrier means a health insurer or any other entity that writes, issues, or administers health benefit plans that cover the employees of small employers, regardless of the situs of the contract or master policyholder.
(d)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(e)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health benefit plan covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (s).
(f)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, in the small employers regular place of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business, and they are included as employees under a health benefit plan of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. A permanent employee who works at least 20 hours but not more than 29 hours is deemed to be an eligible employee if all four of the following apply:
(A)The employee otherwise meets the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employee health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The insurer may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (s).
(g)Enrollee means an eligible employee or dependent who receives health coverage through the program from a participating carrier.
(h)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(i)Financially impaired means, for the purposes of this chapter, a carrier that, on or after the effective date of this chapter, is not insolvent and is either:
(1)Deemed by the commissioner to be potentially unable to fulfill its contractual obligations.
(2)Placed under an order of rehabilitation or conservation by a court of competent jurisdiction.
(j)Health benefit plan means a policy of health insurance, as defined in Section 106, for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, or coverage that provides excepted benefits, as described in Sections 2722 and 2791 of the federal Public Health Service Act, subject to Section 10701.
(k)In force business means an existing health benefit plan issued by the carrier to a small employer.
(l)Late enrollee means an eligible employee or dependent who has declined health coverage under a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in the plan, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05.
(m)New business means a health benefit plan issued to a small employer that is not the carriers in force business.
(n)Preexisting condition provision means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insureds effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage.
(o)Creditable coverage means:
(1)Any individual or group policy, contract, or program, that is written or administered by a health insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The federal Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subdivision (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(p)Rating period means the period for which premium rates established by a carrier are in effect and shall be no less than 12 months from the date of issuance or renewal of the health benefit plan.
(q)(1)Small employer means either of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a carrier shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health benefit plan to a small employer pursuant to this chapter, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this chapter, provisions of this chapter that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this subparagraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (r), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining employer eligibility in the small employer market, shall be determined using the method for counting full-time employees and full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(r)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria which (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (q), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has been offering health insurance to its members for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any benefit plan design that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the benefit plan design offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the carrier with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a master policy by an admitted insurer is delivered directly to the association or a trust formed for or sponsored by an association to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(s)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it may also include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include those persons as members of the guaranteed association, the association must so elect in advance of purchasing coverage from a plan. Health plans may require an association to adhere to the membership composition it selects for up to 12 months.
(t)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(u)Nongrandfathered health benefit plan means a health benefit plan that is not a grandfathered health plan.
(v)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(w)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.
(x)Waiting period means a period that is required to pass with respect to the employee before the employee is eligible to be covered for benefits under the terms of the contract.
(y)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(z)Family means the policyholder and his or her dependents.
SEC. 9.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 10.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.
SEC. 11.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
As used in this article, the following definitions shall apply:
(a)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(b)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health care service plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (m).
(c)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, at the small employers regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business and included as employees under a health care service plan contract of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are deemed to be eligible employees if all four of the following apply:
(A)They otherwise meet the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employees health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (m).
(d)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(e)In force business means an existing health benefit plan contract issued by the plan to a small employer.
(f)Late enrollee means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 1357.503. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations plan contract consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in the plan, except where that member or person qualifies for a special enrollment period provided pursuant to Section 1357.503.
(g)New business means a health care service plan contract issued to a small employer that is not the plans in force business.
(h)Preexisting condition provision means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollees effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. No health care service plan shall limit or exclude coverage for any individual based on a preexisting condition whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date.
(i)Creditable coverage means:
(1)Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the Public Health Service Act, as amended by Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(j)Rating period means the period for which premium rates established by a plan are in effect and shall be no less than 12 months from the date of issuance or renewal of the plan contract.
(k)(1)Small employer means any of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this paragraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (l), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining employer eligibility in the small employer market, the number of employees shall be determined using the method for counting full-time employees and full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(l)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(m)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months.
(n)Affiliation period means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective.
(o)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(p)Nongrandfathered small employer health care service plan contract means a small employer health care service plan contract that is not a grandfathered health plan.
(q)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(r)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.
(s)Small employer health care service plan contract means a health care service plan contract issued to a small employer.
(t)Waiting period means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the contract.
(u)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(v)Family means the subscriber and his or her dependent or dependents.
(w)Health benefit plan means a health care service plan contract that provides medical, hospital, and surgical benefits for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or coverage under a specialized health care service plan contract.
SEC. 2.Section 1399.849 of the Health and Safety Code is amended to read:1399.849.(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 3.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where disparities in outcomes associated with the social determinants of health as well as gender, race, sexual orientation, or gender identity are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer-reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 4.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For the 201011 to 201617 fiscal years, inclusive, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 5.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 6.Section 127665 of the Health and Safety Code is repealed.SEC. 7.Section 127665 is added to the Health and Safety Code, to read:127665.This chapter shall become inoperative on July 1, 2017, and, as of January 1, 2018, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2018, deletes or extends the dates on which it becomes inoperative and is repealed.
SEC. 8.Section 10753 of the Insurance Code is amended to read:10753.(a)Agent or broker means a person or entity licensed under Chapter 5 (commencing with Section 1621) of Part 2 of Division 1.
(b)Benefit plan design means a specific health coverage product issued by a carrier to small employers, to trustees of associations that include small employers, or to individuals if the coverage is offered through employment or sponsored by an employer. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health care services which has significant incentives for the covered individuals to use the system.
(c)Carrier means a health insurer or any other entity that writes, issues, or administers health benefit plans that cover the employees of small employers, regardless of the situs of the contract or master policyholder.
(d)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(e)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health benefit plan covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (s).
(f)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, in the small employers regular place of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business, and they are included as employees under a health benefit plan of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. A permanent employee who works at least 20 hours but not more than 29 hours is deemed to be an eligible employee if all four of the following apply:
(A)The employee otherwise meets the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employee health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The insurer may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (s).
(g)Enrollee means an eligible employee or dependent who receives health coverage through the program from a participating carrier.
(h)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(i)Financially impaired means, for the purposes of this chapter, a carrier that, on or after the effective date of this chapter, is not insolvent and is either:
(1)Deemed by the commissioner to be potentially unable to fulfill its contractual obligations.
(2)Placed under an order of rehabilitation or conservation by a court of competent jurisdiction.
(j)Health benefit plan means a policy of health insurance, as defined in Section 106, for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, or coverage that provides excepted benefits, as described in Sections 2722 and 2791 of the federal Public Health Service Act, subject to Section 10701.
(k)In force business means an existing health benefit plan issued by the carrier to a small employer.
(l)Late enrollee means an eligible employee or dependent who has declined health coverage under a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in the plan, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05.
(m)New business means a health benefit plan issued to a small employer that is not the carriers in force business.
(n)Preexisting condition provision means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insureds effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage.
(o)Creditable coverage means:
(1)Any individual or group policy, contract, or program, that is written or administered by a health insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The federal Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subdivision (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(p)Rating period means the period for which premium rates established by a carrier are in effect and shall be no less than 12 months from the date of issuance or renewal of the health benefit plan.
(q)(1)Small employer means either of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a carrier shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health benefit plan to a small employer pursuant to this chapter, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this chapter, provisions of this chapter that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this subparagraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (r), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining employer eligibility in the small employer market, the number of employees shall be determined using the method for counting full-time employees and full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(r)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria which (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (q), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has been offering health insurance to its members for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any benefit plan design that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the benefit plan design offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the carrier with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a master policy by an admitted insurer is delivered directly to the association or a trust formed for or sponsored by an association to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(s)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it may also include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include those persons as members of the guaranteed association, the association must so elect in advance of purchasing coverage from a plan. Health plans may require an association to adhere to the membership composition it selects for up to 12 months.
(t)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(u)Nongrandfathered health benefit plan means a health benefit plan that is not a grandfathered health plan.
(v)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(w)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.
(x)Waiting period means a period that is required to pass with respect to the employee before the employee is eligible to be covered for benefits under the terms of the contract.
(y)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(z)Family means the policyholder and his or her dependents.
SEC. 9.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 10.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.
SEC. 11.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
As used in this article, the following definitions shall apply:
(a)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(b)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health care service plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (m).
(c)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, at the small employers regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business and included as employees under a health care service plan contract of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are deemed to be eligible employees if all four of the following apply:
(A)They otherwise meet the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employees health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (m).
(d)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(e)In force business means an existing health benefit plan contract issued by the plan to a small employer.
(f)Late enrollee means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 1357.503. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations plan contract consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in the plan, except where that member or person qualifies for a special enrollment period provided pursuant to Section 1357.503.
(g)New business means a health care service plan contract issued to a small employer that is not the plans in force business.
(h)Preexisting condition provision means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollees effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. No health care service plan shall limit or exclude coverage for any individual based on a preexisting condition whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date.
(i)Creditable coverage means:
(1)Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The Medicare program Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)10 U.S.C. Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under 5 U.S.C. Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the Public Health Service Act, as amended by Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(j)Rating period means the period for which premium rates established by a plan are in effect and shall be no less than 12 months from the date of issuance or renewal of the plan contract.
(k)(1)Small employer means any of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees or employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this paragraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (l), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining the number of employees, employer eligibility in the small employer market, the number of employees shall be determined using the method for counting full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(l)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(m)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months.
(n)Affiliation period means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective.
(o)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(p)Nongrandfathered small employer health care service plan contract means a small employer health care service plan contract that is not a grandfathered health plan.
(q)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(r)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.
(s)Small employer health care service plan contract means a health care service plan contract issued to a small employer.
(t)Waiting period means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the contract.
(u)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(v)Family means the subscriber and his or her dependent or dependents.
(w)Health benefit plan means a health care service plan contract that provides medical, hospital, and surgical benefits for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or coverage under a specialized health care service plan contract.
SEC. 2.Section 1399.849 of the Health and Safety Code is amended to read:1399.849.(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 3.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where disparities in outcomes associated with the social determinants of health as well as gender, race, sexual orientation, or gender identity are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer-reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 4.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For the 201011 to 201617 fiscal years, inclusive, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 5.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 6.Section 127665 of the Health and Safety Code is repealed.SEC. 7.Section 127665 is added to the Health and Safety Code, to read:127665.This chapter shall become inoperative on July 1, 2017, and, as of January 1, 2018, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2018, deletes or extends the dates on which it becomes inoperative and is repealed.
SEC. 8.Section 10753 of the Insurance Code is amended to read:10753.(a)Agent or broker means a person or entity licensed under Chapter 5 (commencing with Section 1621) of Part 2 of Division 1.
(b)Benefit plan design means a specific health coverage product issued by a carrier to small employers, to trustees of associations that include small employers, or to individuals if the coverage is offered through employment or sponsored by an employer. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health care services which has significant incentives for the covered individuals to use the system.
(c)Carrier means a health insurer or any other entity that writes, issues, or administers health benefit plans that cover the employees of small employers, regardless of the situs of the contract or master policyholder.
(d)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(e)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health benefit plan covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (s).
(f)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, in the small employers regular place of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business, and they are included as employees under a health benefit plan of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. A permanent employee who works at least 20 hours but not more than 29 hours is deemed to be an eligible employee if all four of the following apply:
(A)The employee otherwise meets the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employee health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The insurer may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (s).
(g)Enrollee means an eligible employee or dependent who receives health coverage through the program from a participating carrier.
(h)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(i)Financially impaired means, for the purposes of this chapter, a carrier that, on or after the effective date of this chapter, is not insolvent and is either:
(1)Deemed by the commissioner to be potentially unable to fulfill its contractual obligations.
(2)Placed under an order of rehabilitation or conservation by a court of competent jurisdiction.
(j)Health benefit plan means a policy of health insurance, as defined in Section 106, for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, or coverage that provides excepted benefits, as described in Sections 2722 and 2791 of the federal Public Health Service Act, subject to Section 10701.
(k)In force business means an existing health benefit plan issued by the carrier to a small employer.
(l)Late enrollee means an eligible employee or dependent who has declined health coverage under a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in the plan, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05.
(m)New business means a health benefit plan issued to a small employer that is not the carriers in force business.
(n)Preexisting condition provision means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insureds effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage.
(o)Creditable coverage means:
(1)Any individual or group policy, contract, or program, that is written or administered by a health insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The federal Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)10 U.S.C. Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under 5 U.S.C. Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subdivision (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(p)Rating period means the period for which premium rates established by a carrier are in effect and shall be no less than 12 months from the date of issuance or renewal of the health benefit plan.
(q)(1)Small employer means either of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a carrier shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees or employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health benefit plan to a small employer pursuant to this chapter, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this chapter, provisions of this chapter that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this subparagraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (r), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining the number of employees, employer eligibility in the small employer market, the number of employees shall be determined using the method for counting full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(r)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria which (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (q), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has been offering health insurance to its members for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any benefit plan design that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the benefit plan design offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the carrier with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a master policy by an admitted insurer is delivered directly to the association or a trust formed for or sponsored by an association to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(s)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it may also include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include those persons as members of the guaranteed association, the association must so elect in advance of purchasing coverage from a plan. Health plans may require an association to adhere to the membership composition it selects for up to 12 months.
(t)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(u)Nongrandfathered health benefit plan means a health benefit plan that is not a grandfathered health plan.
(v)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(w)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.
(x)Waiting period means a period that is required to pass with respect to the employee before the employee is eligible to be covered for benefits under the terms of the contract.
(y)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(z)Family means the policyholder and his or her dependents.
SEC. 9.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 10.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.
SEC. 11.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
As used in this article, the following definitions shall apply:
(a)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(b)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health care service plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (m).
(c)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, at the small employers regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business and included as employees under a health care service plan contract of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are deemed to be eligible employees if all four of the following apply:
(A)They otherwise meet the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employees health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (m).
(d)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(e)In force business means an existing health benefit plan contract issued by the plan to a small employer.
(f)Late enrollee means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 1357.503. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations plan contract consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in the plan, except where that member or person qualifies for a special enrollment period provided pursuant to Section 1357.503.
(g)New business means a health care service plan contract issued to a small employer that is not the plans in force business.
(h)Preexisting condition provision means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollees effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. No health care service plan shall limit or exclude coverage for any individual based on a preexisting condition whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date.
(i)Creditable coverage means:
(1)Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The Medicare program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)10 U.S.C. Chapter 55 (commencing with Section 1071) (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under 5 U.S.C. Chapter 89 (commencing with Section 8901) (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the Public Health Service Act, as amended by Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(j)Rating period means the period for which premium rates established by a plan are in effect and shall be no less than 12 months from the date of issuance or renewal of the plan contract.
(k)(1)Small employer means any of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of eligible employees, employees or employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this paragraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (l), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining the number of employees, shall be determined using the method for counting full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(l)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(m)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months.
(n)Affiliation period means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective.
(o)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(p)Nongrandfathered small employer health care service plan contract means a small employer health care service plan contract that is not a grandfathered health plan.
(q)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(r)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.
(s)Small employer health care service plan contract means a health care service plan contract issued to a small employer.
(t)Waiting period means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the contract.
(u)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(v)Family means the subscriber and his or her dependent or dependents.
(w)Health benefit plan means a health care service plan contract that provides medical, hospital, and surgical benefits for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or coverage under a specialized health care service plan contract.
SECTION 1.SEC. 2.Section 1399.849 of the Health and Safety Code is amended to read:1399.849.(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 2.SEC. 3.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where disparities in outcomes associated with the social determinants of health as well as gender, race, sexual orientation, or gender identity are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer-reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 3.SEC. 4.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For the 201011 to 201617 fiscal years, inclusive, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 4.SEC. 5.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 5.SEC. 6.Section 127665 of the Health and Safety Code is repealed.SEC. 6.SEC. 7.Section 127665 is added to the Health and Safety Code, to read:127665.This chapter shall become inoperative on July 1, 2017, and, as of January 1, 2018, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2018, deletes or extends the dates on which it becomes inoperative and is repealed.
SEC. 8.Section 10753 of the Insurance Code is amended to read:10753.(a)Agent or broker means a person or entity licensed under Chapter 5 (commencing with Section 1621) of Part 2 of Division 1.
(b)Benefit plan design means a specific health coverage product issued by a carrier to small employers, to trustees of associations that include small employers, or to individuals if the coverage is offered through employment or sponsored by an employer. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health care services which has significant incentives for the covered individuals to use the system.
(c)Carrier means a health insurer or any other entity that writes, issues, or administers health benefit plans that cover the employees of small employers, regardless of the situs of the contract or master policyholder.
(d)Child means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations.
(e)Dependent means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health benefit plan covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (s).
(f)Eligible employee means either of the following:
(1)Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, in the small employers regular place of business, who has met any statutorily authorized applicable waiting period requirements. The term includes sole proprietors or partners of a partnership, if they are actively engaged on a full-time basis in the small employers business, and they are included as employees under a health benefit plan of a small employer, but does not include employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association shall be deemed to be eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. A permanent employee who works at least 20 hours but not more than 29 hours is deemed to be an eligible employee if all four of the following apply:
(A)The employee otherwise meets the definition of an eligible employee except for the number of hours worked.
(B)The employer offers the employee health coverage under a health benefit plan.
(C)All similarly situated individuals are offered coverage under the health benefit plan.
(D)The employee must have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The insurer may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings.
(2)Any member of a guaranteed association as defined in subdivision (s).
(g)Enrollee means an eligible employee or dependent who receives health coverage through the program from a participating carrier.
(h)Exchange means the California Health Benefit Exchange created by Section 100500 of the Government Code.
(i)Financially impaired means, for the purposes of this chapter, a carrier that, on or after the effective date of this chapter, is not insolvent and is either:
(1)Deemed by the commissioner to be potentially unable to fulfill its contractual obligations.
(2)Placed under an order of rehabilitation or conservation by a court of competent jurisdiction.
(j)Health benefit plan means a policy of health insurance, as defined in Section 106, for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, or coverage that provides excepted benefits, as described in Sections 2722 and 2791 of the federal Public Health Service Act, subject to Section 10701.
(k)In force business means an existing health benefit plan issued by the carrier to a small employer.
(l)Late enrollee means an eligible employee or dependent who has declined health coverage under a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed associations health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in the plan, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05.
(m)New business means a health benefit plan issued to a small employer that is not the carriers in force business.
(n)Preexisting condition provision means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insureds effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage.
(o)Creditable coverage means:
(1)Any individual or group policy, contract, or program, that is written or administered by a health insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.
(2)The federal Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3)The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4)Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care.
(5)10 U.S.C. Chapter 55 (commencing with Section 1071) (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6)A medical care program of the Indian Health Service or of a tribal organization.
(7)A health plan offered under 5 U.S.C. Chapter 89 (commencing with Section 8901) (Federal Employees Health Benefits Program (FEHBP)).
(8)A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996.
(9)A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)).
(10)Any other creditable coverage as defined by subdivision (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)).
(p)Rating period means the period for which premium rates established by a carrier are in effect and shall be no less than 12 months from the date of issuance or renewal of the health benefit plan.
(q)(1)Small employer means either of the following:
(A)For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health benefit plans, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a carrier shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of eligible employees, employees or employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health benefit plan to a small employer pursuant to this chapter, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this chapter, provisions of this chapter that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this subparagraph who purchases coverage through a guaranteed association, and any employer purchasing coverage for employees through a guaranteed association. This subparagraph shall be implemented to the extent consistent with PPACA, except that the minimum requirement of one employee shall be implemented only to the extent required by PPACA.
(B)Any guaranteed association, as defined in subdivision (r), that purchases health coverage for members of the association.
(2)For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of S corporations, or other individuals, shall be consistent with Section 1304 of PPACA.
(3)For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining the number of employees, shall be determined using the method for counting full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code.
(r)Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria which (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (q), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has been offering health insurance to its members for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any benefit plan design that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the benefit plan design offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the carrier with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a master policy by an admitted insurer is delivered directly to the association or a trust formed for or sponsored by an association to administer benefits for association members.
For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision.
(s)Members of a guaranteed association means any individual or employer meeting the associations membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the associations discretion, it may also include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include those persons as members of the guaranteed association, the association must so elect in advance of purchasing coverage from a plan. Health plans may require an association to adhere to the membership composition it selects for up to 12 months.
(t)Grandfathered health plan has the meaning set forth in Section 1251 of PPACA.
(u)Nongrandfathered health benefit plan means a health benefit plan that is not a grandfathered health plan.
(v)Plan year has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations.
(w)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.
(x)Waiting period means a period that is required to pass with respect to the employee before the employee is eligible to be covered for benefits under the terms of the contract.
(y)Registered domestic partner means a person who has established a domestic partnership as described in Section 297 of the Family Code.
(z)Family means the policyholder and his or her dependents.
SEC. 7.SEC. 9.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 8.SEC. 10.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.
SEC. 9.SEC. 11.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 2.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where gender and racial disparities in outcomes associated with the social determinants of health as well as gender, race, sexual orientation, or gender identity are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer-reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 3.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For the 201011 to 201617 fiscal years, inclusive, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 4.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 5.Section 127665 of the Health and Safety Code is repealed.SEC. 6.Section 127665 is added to the Health and Safety Code, to read:127665.This chapter shall become inoperative on July 1, 2017, and, as of January 1, 2018, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2018, deletes or extends the dates on which it becomes inoperative and is repealed.
SEC. 7.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410).
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 8.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.
SEC. 9.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 1 to December 15, inclusive, of the preceding calendar year. November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, and to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 and to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act. Act (Public Law 78-410).
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 2.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where gender and racial disparities in outcomes are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer reviewed peer-reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 3.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For the 201011 to 201617, 201617 fiscal years, inclusive, fiscal years, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 4.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 5.Section 127665 of the Health and Safety Code is amended to read:127665.This chapter shall remain in effect until June 30, 2017, and shall be repealed as of that date, unless a later enacted statute that becomes operative on or before June 30, 2017, deletes or extends that date.
SEC. 5.Section 127665 of the Health and Safety Code is repealed.127665.This chapter shall remain in effect until December 31, 2015, and shall be repealed as of that date, unless a later enacted statute that becomes operative on or before December 31, 2015, deletes or extends that date.
SEC. 6.Section 127665 is added to the Health and Safety Code, to read:127665.This chapter shall become inoperative on July 1, 2017, and, as of January 1, 2018, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2018, deletes or extends the dates on which it becomes inoperative and is repealed.
SEC. 6.SEC. 7.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 1 to December 15, inclusive, of the preceding calendar year. November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar-year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, and to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 and to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act. Act (Public Law 78-410).
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 7.SEC. 8.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.
SEC. 8.SEC. 9.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan provides or arranges for the provision of health care services. A plan shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A plan shall allow the subscriber of an individual health benefit plan to add a dependent to the subscribers plan at the option of the subscriber, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A plan shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 1 to December 7, 15, inclusive, of the preceding calendar year.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a plan shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a plan shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 1389.7 and 1389.21.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 1399.845 of this code or Section 10965 of the Insurance Code, for one of the conditions described in subdivision (c) of Section 1373.96 and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to individual health benefit plans offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 1399.855. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the subscriber submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, and December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 and December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the plan receives the request for special enrollment.
(g)(1)A health care service plan shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act.
(2)Notwithstanding Section 1389.1, a health care service plan shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health care service plan shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health care service plan shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and all enrollees in all nongrandfathered individual health benefit plans offered by that health care service plan in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside of the Exchange. Student health insurance coverage, as that coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health care service plans single risk pool for individual coverage.
(2)Each calendar year, a health care service plan shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health care service plan may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after that repeal or amendment.
SEC. 2.Section 127660 of the Health and Safety Code is amended to read:127660.(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service, as defined in subdivision (c) (d), and legislation proposing to repeal a mandated benefit or service, as defined in subdivision (d) (e), and to prepare a written analysis with relevant data on the following:
(1)Public health impacts, including, but not limited to, all of the following:
(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.
(B)The impact on the health of the community, including diseases and conditions where gender and racial disparities in outcomes are established in peer-reviewed scientific and medical literature.
(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.
(2)Medical impacts, including, but not limited to, all of the following:
(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer reviewed medical literature.
(B)The extent to which the benefit or service is generally available and utilized by treating physicians.
(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.
(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.
(3)Financial impacts, including, but not limited to, all of the following:
(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.
(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.
(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.
(D)The impact of this coverage or repeal of coverage on the total cost of health care.
(E)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program and the Healthy Families Program.
(F)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.
(G)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.
(H)The extent to which the benefit or service is generally utilized by a significant portion of the population.
(I)The extent to which health care coverage for the benefit or service is already generally available.
(J)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.
(K)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.
(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.
(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
(b)
(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the Internet and make every analysis available to the public upon request.
(c)
(d)As used in this section, legislation proposing to mandate a benefit or service means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
(d)
(e)As used in this section, legislation proposing to repeal a mandated benefit or service means a proposed statute that, if enacted, would become operative on or after January 1, 2008, and would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:
(1)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
(2)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
(3)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.
SEC. 3.Section 127662 of the Health and Safety Code is amended to read:127662.(a)In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury, the Health Care Benefits Fund. The universitys work in providing the bill analyses shall be supported from the fund.
(b)For fiscal years the 201011 to 201415 201617, inclusive, fiscal years, each health care service plan, except a specialized health care service plan, and each health insurer, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed two million dollars ($2,000,000).
(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the universitys activities pursuant to subdivision (b).
(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.
(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.
(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.
(4)Health insurance, as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 4.Section 127664 of the Health and Safety Code is amended to read:127664.The Legislature requests the University of California to submit a report to the Governor and the Legislature by January 1, 2014 2017, regarding the implementation of this chapter. This report shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 5.Section 127665 of the Health and Safety Code is amended to read:127665.This chapter shall remain in effect until December 31, 2015 June 30, 2017, and shall be repealed as of that date, unless a later enacted statute that becomes operative on or before December 31, 2015 June 30, 2017, deletes or extends that date.
SEC. 6.Section 10965.3 of the Insurance Code is amended to read:10965.3.(a)(1)On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurers health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d).
(2)A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholders health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section.
(b)An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual.
(c)(1)A health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 1 to December 7, 15, inclusive, of the preceding calendar year.
(2)Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar-year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014.
(d)(1)Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events:
(A)He or she or his or her dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply:
(i)Minimum essential coverage has the same meaning as that term is defined in subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A).
(ii)Loss of minimum essential coverage includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. Loss of minimum essential coverage also includes loss of that coverage for a reason that is not due to the fault of the individual.
(iii)Loss of minimum essential coverage does not include loss of that coverage due to the individuals failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17.
(B)He or she gains a dependent or becomes a dependent.
(C)He or she is mandated to be covered as a dependent pursuant to a valid state or federal court order.
(D)He or she has been released from incarceration.
(E)His or her health coverage issuer substantially violated a material provision of the health coverage contract.
(F)He or she gains access to new health benefit plans as a result of a permanent move.
(G)He or she was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 and that provider is no longer participating in the health benefit plan.
(H)He or she demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because he or she was misinformed that he or she was covered under minimum essential coverage.
(I)He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code.
(J)With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations.
(2)With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations.
(e)With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse.
(f)With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply:
(1)After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individuals actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges.
(2)With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, and December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(3)With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15, coverage shall become effective as of the following January 1. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 and December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(4)With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply:
(A)When the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment.
(B)Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption.
(C)Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment.
(g)(1)A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors:
(A)Health status.
(B)Medical condition, including physical and mental illnesses.
(C)Claims experience.
(D)Receipt of health care.
(E)Medical history.
(F)Genetic information.
(G)Evidence of insurability, including conditions arising out of acts of domestic violence.
(H)Disability.
(I)Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act.
(2)Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or his or her dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment of the individual.
(h)(1)A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurers single risk pool for individual coverage.
(2)Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to Sections 1343 and 1341 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3).
(3)A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the health benefit plan.
(B)The health benefit plans provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits.
(D)With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans.
(E)Administrative costs, excluding any user fees required by the Exchange.
(i)This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014.
(j)This section shall not apply to a grandfathered health plan.
(k)If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), subdivisions (a), (b), and (g) shall become inoperative 12 months after the date of that repeal or amendment and individual health care benefit plans shall thereafter be subject to Sections 10901.2, 10951, and 10953.
SEC. 7.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.
SEC. 8.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maintain appropriate standards of accuracy and efficiency with respect to matters relating to health care coverage in California, by adjusting the next open enrollment period for the individual health care coverage market as needed to comply with federal law, and ensuring that the University of California is provided with sufficient advance notice regarding the continuing duties of the university to plan and carry out necessary health care benefit research and analysis as requested pursuant to this act, it is necessary that this act take effect immediately.
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Date
|
Status
|
|---|---|
| May 6, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on HEALTH. |
| Jun 17, 2015 | Chaptered by Secretary of State. Chapter 9, Statutes of 2015. |
| Jun 17, 2015 | Approved by the Governor. |
| Jun 10, 2015 | Enrolled and presented to the Governor at 3 p.m. |
| Jun 4, 2015 | Assembly amendments concurred in. (Ayes 39. Noes 0.) Ordered to engrossing and enrolling. |
| Jun 4, 2015 | Assembly amendments concurred in. (Ayes 39. Noes 0. Page 1333.) Ordered to engrossing and enrolling. |
| Jun 2, 2015 | Read third time. Urgency clause adopted. Passed. (Ayes 78. Noes 0. Page 1817.) Ordered to the Senate. |
| Jun 2, 2015 | Read third time. Urgency clause adopted. Passed. Ordered to the Senate. |
| Jun 2, 2015 | In Senate. Concurrence in Assembly amendments pending. |
| May 28, 2015 | Read second time. Ordered to consent calendar. |
| May 27, 2015 | From committee: Do pass. Ordered to consent calendar. (Ayes 17. Noes 0.) (May 27). |
| May 21, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR. |
| May 19, 2015 | Read second time and amended. Re-referred to Com. on APPR. |
| May 18, 2015 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 19. Noes 0.) (May 12). |
| Jan 16, 2015 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
| Apr 27, 2015 | Referred to Com. on HEALTH. |
| Apr 16, 2015 | Read third time. Urgency clause adopted. Passed. (Ayes 38. Noes 0. Page 632.) Ordered to the Assembly. |
| Apr 16, 2015 | In Assembly. Read first time. Held at Desk. |
| Apr 14, 2015 | Read second time. Ordered to third reading. |
| Apr 13, 2015 | From committee: Do pass. (Ayes 6. Noes 0. Page 568.) (April 13). |
| Apr 6, 2015 | Read second time and amended. Re-referred to Com. on APPR. |
| Apr 2, 2015 | Set for hearing April 13. |
| Apr 2, 2015 | Set for hearing April 13 in APPR. pending receipt. |
| Mar 26, 2015 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 8. Noes 0. Page 434.) (March 25). |
| Feb 26, 2015 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on HEALTH. |
| Feb 10, 2015 | Set for hearing March 25. |
| Feb 5, 2015 | Referred to Com. on HEALTH. |
| Jan 20, 2015 | From printer. May be acted upon on or after February 19. |
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Date
|
Description
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Location
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Votes
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|
|---|---|---|---|---|
| Jun 4, 2015 | Unfinished Business SB125 Hernandez Urgency Clause Concurrence | Senate Floor |
Passed |
|
| Jun 2, 2015 | SB 125 Hernandez Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 27, 2015 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| May 12, 2015 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Health |
Passed |
|
| Apr 16, 2015 | Senate 3rd Reading SB125 Hernandez Urgency Clause | Senate Floor |
Passed |
|
| Apr 13, 2015 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| Mar 25, 2015 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate 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.
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Organization
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Position
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Date
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|---|---|---|
| Anthem Blue Cross | ** Support | Jun 4, 2015 |
| Association of California Life and Health Insurers | ** Support | Jun 4, 2015 |
| California Association Of Health Plans | ** Support | Jun 4, 2015 |
| California Chamber Of Commerce | ** Support | Jun 4, 2015 |
| California Immigrant Policy Center | ** Support | Jun 4, 2015 |
| California Right to Life Committee, Inc. | ** Against | Jun 4, 2015 |
| Health Access California | ** Support | Jun 4, 2015 |
| Kaiser Permanente | ** Support | Jun 4, 2015 |
| L.A. Care | * Indeterminate | Apr 13, 2015 |
| L.A. Care Health Plan | ** Support | Jun 4, 2015 |
| Western Center On Law And Poverty Inc. | ** Support | Jun 4, 2015 |
SB 125
Page 8
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Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
UNFINISHED BUSINESS
Bill No: SB 125
Amended: 5/21/15
SENATE HEALTH COMMITTEE: 8-0, 3/25/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Wolk
NO VOTE RECORDED: Roth
SENATE APPROPRIATIONS COMMITTEE: 6-0, 4/13/15
AYES: Lara, Bates, Beall, Leyva, Mendoza, Nielsen
NO VOTE RECORDED: Hill
SENATE FLOOR: 38-0, 4/16/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR: 78-0, 6/2/15 (Consent) - See last page for vote
DIGEST: This bill extends the sunset date of the California Health Benefit Review Program (CHBRP) to June 30, 2017 and makes changes to its analyses and timelines. Extends the fee assessed on health plans and insurers for this purpose until fiscal year 2016-17. Establishes an annual open enrollment period for purchasers in the individual health insurance market for the policy year beginning on January 1, 2016, from November 1, of the preceding calendar year, to January 31, of the benefit year, inclusive. Conforms state law to federal requirements regarding how to count employees for the purposes of determining employer size with regard to small or large group health insurance markets.
Assembly Amendments conform state law to federal requirements regarding how to count employees for the purposes of determining employer size with regard to small or large group health insurance markets.
Existing law:
Requests the University of California (UC) to establish the CHBRP to assess, as specified and not later than 60 days from receiving a request by the Legislature, legislation proposing to mandate or repeal a health plan or health insurance benefit or service (referred to as “mandate bills”) for public health, medical, and financial impacts. Sunsets CHBRP on June 30, 2015.
Requires health plans, except specialized health plans, and health insurers, for fiscal years 2010-11 to 2014-15, to be assessed an annual fee to fund CHBRP, as specified, not to exceed $2 million.
Requires health plans and insurers to limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods.
Requires plans and insurers to provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
Defines "small employer" for plan years commencing on or after January 1, 2014, and on or before December 31, 2015, as any person, firm, proprietary or nonprofit corporation, partnership, public agency or association that is actively engaged in business or service, that, on at least 50 percent of its working days, as specified, employed at least one, but not more than 50 eligible employees. For plan years commencing on or after January 1, 2016, defines a “small employer” as one with at least one but not more than 100 eligible employees.
Defines "eligible employee" as any permanent employee who is actively engaged on a full-time basis with a normal workweek of an average of 30 hours per week over the course of a month, at the small employer's regular places of business, as specified. Deems permanent employees who work at least 20 hours, but not more than 29 hours, as eligible employees if specified criteria are met.
This bill:
Requests CHBRP to analyze the impact of mandate bills on essential health benefits (EHBs) and Covered California.
Requests CHBRP to assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
Requests analyses to be provided to the appropriate committees of the Legislature in a manner pursuant to a timeline agreed upon by the Legislature and CHBRP.
Extends the fee assessed on health plans and insurers to fiscal year 2016-17.
Requests CHBRP to submit a report to the Governor and Legislature by
January 1, 2017, regarding the implementation of the program.Extends the sunset date of CHBRP to June 30, 2017.
Requires health plans and insurers to provide annual open enrollment periods for plan or policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
Revises, for plan years commencing on or after January 1, 2016, the definition of small employer to require the use of a full-time equivalent (FTE) employee counting method for determining the size of the employer, specifically whether the employer is a small employer.
Contains an urgency clause that will make this bill effective upon enactment.
Background
Affordable Care Act (ACA). The ACA represents a major expansion of U.S. health care coverage through an expansion and simplification of the Medicaid program and the adoption of major reforms of the health insurance market. California took early steps to establish Covered California, pass rate review requirements, establish EHBs, and adopt insurance market reforms to implement aspects of the ACA, in some cases before federal regulatory guidance was issued or finalized. An overarching objective in the development of California implementing legislation was to ensure, to the extent possible, that laws applicable to plans and insurers participating in Covered California were also applied to plans and insurers not participating in Covered California in order to keep a level, regulatory playing field.
Enrollment periods. Open and special enrollment periods not only apply to qualified health plans (QHPs) but also to health plans and insurers not participating in Covered California. As such, for the individual market, an initial open enrollment period of October 1, 2013, to March 31, 2014, and annual open enrollment period of November 15, 2014, to February 15, 2015, for the 2015 benefit year apply to QHPs and health plans and insurers not participating in Covered California. On February 20, 2015, the federal Department of Health and Human Services (HHS) issued the “Final HHS Notice of Benefit and Payment Parameters for 2016,” which requires the annual open enrollment period for the 2016 policy year to be November 1, of the preceding calendar year, to January 31, of the benefit year.
Small employer definition. Federal and state laws define a "small employer" as an employer with one to 100 employees, as specified. Federal law allows states to define small employers as those with one to 50 employees for plan years prior to January 1, 2016. California currently exercises this option, so under California law, until December 31, 2015, small employers are defined as having one to 50 employees. However, beginning January 1, 2016, a small employer is defined under state law as one with 1 to 100 employees, as specified.
While both federal and state laws use similar definitions of a small employer, the laws vary with respect to how employees are counted to determine whether or not an employer can purchase health insurance in the small group market or the large group market. With respect to exchanges, federal regulations require, on or after January 1, 2016, employees to be counted using an FTE method. Under the FTE method, employers are required, in addition to the number of full-time employees, to count the number of FTE employees to determine the total number of its employees. This counting method takes part-time employees into account in order to determine the size of the employer for the specific purposes of exchanges. California law does not require the use of the FTE method to count employees to determine the size of an employer.
EHBs. Among many other provisions, the ACA requires Medicaid benchmark and benchmark-equivalent plans, plans sold through the Exchange, and health plans and health insurers providing coverage to individuals and small employers to ensure coverage of EHBs, as defined by HHS. HHS is required to ensure that the scope of EHBs is equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. Under federal law, EHBs must include 10 general categories and the items and services covered within specified categories.
Covered California. Through SB 900 (Alquist, Chapter 659, Statutes of 2010) and AB 1602 (Perez, Chapter 655, Statutes of 2010), California was the first state in the nation to establish a Health Benefit Exchange (known as Covered California). Adopting its Board of Directors in October 2011, Covered California’s vision is to improve the health of all Californians by assuring their access to affordable, high quality care. According to Covered California, it is an easy-to-use marketplace where individuals can get financial assistance to make coverage more affordable and where people can compare and choose health coverage.
CHBRP. CHBRP was established under AB 1996 (Thomson, Chapter 795, Statutes of 2002), which requested the UC to assess mandate bills and prepare a timely written analysis within 60 days with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. CHBRP is administered in the UC Office of the President and has staff that supports a task force of faculty from six UC campuses (Berkeley, Davis, Irvine, Los Angeles, San Diego, and San Francisco) and three private universities (Loma Linda University, the University of Southern California, and Stanford University).
Number of mandate bills. Since CHBRP’s inception, the number of bills mandating benefits and services has fluctuated, and in the last year has decreased significantly. When AB 1996 was being considered by the Legislature, the author stated that during the 2001-2002 legislative session, more than 14 mandate bills were introduced. The author believed that UC would facilitate the provision of quality, cost-effective health services by providing current, accurate data and information to the Governor and the Legislature for the purpose of determining health-related programs and policies in connection with proposed legislation. In 2003, the first year that the UC received requests for analysis of mandate bills, only four were introduced and analyzed. The following year, there were 13 mandate bills analyzed. Between 2005 and 2014, the number of mandate bills introduced has varied, with the largest number (15 mandate bills) in 2011. With the passage of the ACA, and the establishment of EHBs, policymakers have worked to ensure the successful implementation of the ACA and Covered California, and have endeavored to discourage any additional legislation to alter state mandated benefits until the implications on EHBs were known.
New ways to tweak coverage requirements. In the 11 years since CHBRP has been analyzing mandate bills, various stakeholders and interest groups have developed legislative proposals other than mandates to have a similar effect on coverage requirements. These have included:
SB 639 (Hernandez, Chapter 316, Statutes of 2013) places in California law provisions of the ACA relating to out-of-pocket limits on health plan enrollee and insured cost-sharing, health plan and insurer actuarial value coverage levels and catastrophic coverage requirements, and requirements on health insurers with regard to coverage for out-of-network emergency services. Applies health plan enrollee and insured out-of-pocket limits to specialized products that offer EHBs.
AB 1800 (Ma, 2012) would have implemented provisions of the ACA related to prohibitions on health plans and health insurers from imposing out-of-pocket maximum caps which exceed specified levels. The bill was held in the Senate Appropriations Committee.
AB 310 (Ma, 2011) would have prohibited health plan contracts and health insurance policies that cover outpatient prescription drugs from requiring coinsurance, as defined, as a basis for cost sharing for outpatient prescription drug benefits and imposes specified limitations on copayments, as defined, and out-of-pocket expenses for outpatient prescription drugs. The bill was held in the Assembly Appropriations Committee.
60-day timeline. AB 1996 and subsequent legislation that extended CHBRP included a request that analyses be provided to the Legislature within 60 days. CHBRP developed a model that has resulted in analyses not being completed prior to that 60-day deadline. According to CHBRP’s 2013 report to the Legislature, it uses a 60-day timeline that details which activities occur on what day. The 60-day clock is initiated by CHBRP upon receipt of a request from the Senate or Assembly Health Committee. According to CHBRP, it must have sufficient capacity to do multiple (e.g., eight or more) analyses on simultaneous 60-day timelines. CHBRP faculty, actuaries, librarians, reviewers, and staff must produce and review multiple drafts on multiple bills in what they consider a very compressed timeframe, given their model. This timeline has led to challenges for incorporating CHBRP’s assessment into the policy committee analysis used by legislators and the public at the time of the bill hearing. Oftentimes mandate bills are introduced close to the bill introduction deadline, which is also about 60 days before deadline for policy committees to hear bills, meaning mandate bills are almost always scheduled for the final hearing prior to the policy committee deadline for fiscal bills. Therefore, there is a tight window between the time the CHBRP analysis is received and the Committee analysis must be completed.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Assembly Appropriations Committee:
Annual costs of $2 million to support the CHBRP (within the UC), supported by an assessment on health plans and health insurers (Health Care Benefits Fund).
Minor administrative costs for the California Health Benefits Exchange to revise existing regulations to conform to the updated open enrollment period.
Anthem Blue Cross
California Association of Health Plans
California Chamber of Commerce
California Immigrant Policy Center
Kaiser Permanente
L.A. Care Health Plan
Western Center on Law and Poverty
California Right to Life Committee, Inc.
ASSEMBLY FLOOR: 78-0, 6/2/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Chávez, Grove
Prepared by: Melanie Moreno / HEALTH /
6/2/15 21:56:01
**** END ****
Date of Hearing: May 27, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 125
(Hernandez) – As Amended May 21, 2015
Policy Committee: |
Health |
Vote: |
19 - 0 |
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Urgency: Yes State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill extends the sunset of the California Health Benefits Review Program (CHBRP) for two years to June 30, 2017, and extends the existing assessment on health plans and health insurers to support the program.
It also conforms to federal law for (1) annual open enrollment period in the individual health insurance market, and (2) the method of counting employees for the purposes of determining whether an employer is in the small or large group health insurance markets; and makes other technical and conforming changes.
FISCAL EFFECT:
Annual costs of $2 million to support the California Health Benefits Review Program (within the University of California), supported by an assessment on health plans and health insurers (Health Care Benefits Fund).
Minor administrative costs for the California Health Benefits Exchange to revise existing regulations to conform to the updated open enrollment period.
COMMENTS:
Purpose. According to the author, this bill updates California statute to reflect the new health insurance environment by reauthorizing CHBRP for two years and expanding the breadth of CHBRP analyses by requesting the inclusion of impacts from legislation on health insurance benefit design, cost sharing, premiums, and other health insurance topics. The author indicates this bill makes important technical changes to comply with federal law.
CHBRP. Established in 2002, pursuant to AB 1996 (Thomson), Chapter 795, Statutes of 2002, CHBRP responds to requests from the Legislature to provide independent analysis of the medical, financial, and public health impacts of proposed health insurance benefit mandates and repeals. CHBRP is administered in the UC Office of the President, and has staff that supports faculty from six UC campuses and three private universities to complete each analysis. Health plans and insurers are assessed an annual fee to fund CHBRP in an amount not to exceed $2 million. Their current sunset on CHBRP's funding authority is less than two months from today, July 1, 2015.
Prior legislation. AB 1578 (Pan) of 2014 extended CHBRP’s sunset date to June 30, 2016, and contained similar language to this bill. AB 1578 died on the Assembly Floor without a concurrence vote.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
SB 125
Page 8
Date of Hearing: May 12, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
SB 125
(Ed Hernandez) – As Amended May 6, 2015
SENATE VOTE: 38-0
SUBJECT: Health care coverage.
SUMMARY: Establishes an annual open enrollment period in the individual health insurance market that is consistent with federal open enrollment dates; conforms state law to federal requirements regarding how to count employees for the purposes of determining employer size with regard to small or large group health insurance markets; extends the sunset date of the California Health Benefits Review Program (CHBRP) to June 30, 2017, and makes other changes regarding CHBRP analyses and timelines; contains an urgency clause to make the bill effective upon enactment. Specifically, this bill:
Requires health plans and insurers to provide annual open enrollment periods for plan or policy years beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive.
Revises, for plan years commencing on or after January 1, 2016, the definition of small employer to require the use of a full-time equivalent (FTE) employee counting method for determining the size of the employer, specifically whether the employer is a small employer.
Extends CHBRP's sunset date to June 30, 2017, and extends a fee assessed on health plans and insurers to support CHBRP to fiscal year 2016-17.
Requests CHBRP to:
Analyze the impact of legislation proposing or repealing a benefit or service mandate on essential health benefits (EHBs), and the California Health Benefits Exchange (Exchange), referred to as Covered California;
Assess legislation that impacts health insurance benefit design, costs sharing, premiums, and other health insurance topics;
Provide analyses to the appropriate committees of the Legislature in a manner pursuant to a timeline agreed upon by the Legislature and CHBRP; and,
Submit a report to the Governor and Legislature by January 1, 2017, regarding the implementation of the program.
Expands the public health impact analysis CHBRP conducts to include diseases and conditions where there are disparities in outcomes associated with social determinants of health, as well as sexual orientation or gender identity.
EXISTING LAW:
Establishes, under federal law, the Patient Protection and Affordable Care Act (ACA), which sets forth various requirements on states; plans and insurers; employers; and, individuals regarding health care coverage.
Establishes the Knox-Keene Health Care Service Plan Act of 1975, the body of law governing plans in the state, and provides for the licensure and regulation of plans by the Department of Managed Health Care (DMHC).
Provides for the regulation of health insurers by the California Department of Insurance (CDI).
Establishes the Exchange for the purposes of facilitating the purchase of qualified health plans (QHPs) by qualified individuals and small employers.
Requires health plans and insurers to fairly and affirmatively offer, market, and sell all of the health benefit plans and policies that are sold in the individual or small group markets to all individuals (and dependents), or small employers, respectively, in each of the plan’s or insurer’s service area or geographic region.
Requires health plans and insurers issuing health benefit plans in the individual and small group market to comply with specified requirements regarding the offering, sale, and scope of coverage provided, including requirements to cover the following 10 categories of EHBs: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and, pediatric services, including oral and vision care.
Requires plans and insurers to limit enrollment in individual health benefit plans to annual open enrollment periods, and special enrollment periods, as specified.
Requires plans and insurers to provide an annual open enrollment period for the policy year beginning January 1, 2015, from November 15, 2014 to February 15, 2015, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 to December 7 of the preceding calendar year.
Defines "small employer" for plan years commencing on or after January 1, 2014, and on or before December 31, 2015, as any person, firm, proprietary or nonprofit corporation, partnership, public agency or association that is actively engaged in business or service, that, on at least 50% of its working days, as specified, employed at least one, but not more than 50 eligible employees. For plan years commencing on or after January 1, 2016, defines a “small employer” as one with at least one but not more than 100 eligible employees.
Defines "eligible employee" as any permanent employee who is actively engaged on a full-time basis with a normal workweek of an average of 30 hours per week over the course of a month, at the small employer's regular places of business, as specified. Deems permanent employees who work at least 20 hours, but not more than 29 hours, as eligible employees if specified criteria are met.
Requests the University of California (UC) to establish CHBRP to assess legislation proposing to mandate or repeal a benefit or service, as defined, and to prepare a written analysis with relevant data on the public health, medical, and financial impact of the mandated or repealed benefit or service.
Authorizes the appropriate policy or fiscal committee chairperson, the Speaker of the Assembly, or the President pro Tempore of the Senate, to request a written analysis as described in 11) above, and requires CHBRP to provide the analysis within 60 days of the request.
Assesses each plan and insurer an annual fee to fund the actual and necessary expenses of CHBRP, and limits the total annual assessment to $2 million to be deposited into the Health Care Benefits Fund. Authorizes the fees to be assessed for fiscal years 2010-11 to 2014-15.
Requires the UC to submit a report to the Governor and the Legislature by January 1, 2014 regarding the implementation of CHBRP.
Sunsets CHBRP on December 31, 2015 (although funding for CHBRP is only authorized through June 30, 2015, see 13) above).
FISCAL EFFECT: According to the Senate Appropriations Committee, this bill, as amended April 6, 2015, does not create significant costs for CDI or DMHC, but would result in:
Minor administrative costs for the Exchange to revise existing regulations to conform to the updated open enrollment period; and,
Annual costs of $2 million to support CHBRP. These costs are supported by an assessment on health plans and health insurers.
COMMENTS:
PURPOSE OF THIS BILL. According to the author, this bill updates California statute to reflect the new, post-ACA environment by reauthorizing CHBRP for two years, incorporating EHBs and the Exchange into its work, and expanding the breadth of CHBRP analyses by requesting the inclusion of impacts from legislation on health insurance benefit design, cost sharing, premiums, and other health insurance topics in their assignments. The author states that this bill also allows for more flexibility in turn-around time for CHBRP reports.
The author also states that this bill revises the open enrollment period in the individual market to remain consistent with federal regulations beginning with the 2016 benefit year. The author asserts that changes in open enrollment dates not only align with federal regulations, but also allow consumers adequate time for plan choice or changes to their plan prior to a January 1 effective date of coverage.
Finally, the author states that recent federal regulations require health benefit exchanges to count employees for the purposes of determining employer group size using a full time equivalent standard for plan years beginning on or after January 1, 2016. The author states that this standard is slightly different than how California currently counts employees for purposes of determining group size, and that this bill updates California law so that Exchange plans are not in conflict with federal regulations and so that the same requirements apply to non-Covered California plans.
BACKGROUND.
Open enrollment. The ACA provides for numerous significant insurance market reforms, such as prohibitions against health insurers imposing preexisting health condition exclusions, and a requirement that health plans and insurers offer EHBs in the individual and small group markets. Additionally, under the ACA, individuals are required to maintain health insurance or pay a penalty, with exceptions for financial hardship, religion, incarceration, and immigration status.
Open enrollment periods serve as a safeguard against people waiting to become sick to enroll. Individuals are generally unable to enroll in individual coverage outside of the open enrollment period unless they experience a qualifying life event, which triggers a special enrollment opportunity. Such events include loss of eligibility for other coverage, gaining a dependent, divorce, or a large change in income.
The ACA requires the U.S. Health and Human Services (HHS) Secretary to establish open enrollment periods for health plans sold through state exchanges and requires individual market plans sold outside an exchange to be offered during this open enrollment period as well. Under the ACA, an initial open enrollment period of October 1, 2013 to March 31, 2014 was established, as well as an annual open enrollment period of November 15, 2014 to February 15, 2015, for the 2015 benefit year.
The federal HHS initially issued a regulation to maintain the open enrollment period, for benefit years beginning on or after January 1, 2016, from November 1 to December 15, inclusive, of the preceding calendar year. However, on February 20, 2015, HHS issued rules requiring the annual open enrollment period for the 2016 benefit year to be November 1, of the preceding calendar year, to January 31 of the benefit year. According to HHS, these changes were made to give health insurance carriers additional time before they would need to set their 2016 rates and submit their applications to participate in state health benefit exchanges; give states and HHS more time to prepare for open enrollment; and give consumer more time to shop for coverage.
Small employer definition. Federal and state laws define a "small employer" as an employer with one to 100 employees, as specified. Federal law allows states to define small employers as those with one to 50 employees for plan years prior to January 1, 2016. California currently exercises this option, so under California law, until December 31, 2015, small employers are defined as having one to 50 employees. However, beginning January 1, 2016, a small employer is defined under state law as one with 1 to 100 employees, as specified.
While both federal and state laws use similar definitions of a small employer, the laws vary with respect to how employees are counted to determine whether or not an employer can purchase health insurance in the small group market or the large group market. With respect to exchanges, federal regulations require, for plan years beginning on or after January 1, 2016, employees to be counted using an FTE method. Under the FTE method, employers are required, in addition to the number of full-time employees, to count the number of FTE employees to determine the total number of its employees. This counting method takes part-time employees into account in order to determine the size of the employer for the specific purposes of exchanges.
California law does not require the use of the FTE method to count employees to determine the size of an employer. Instead, under California law, “eligible employees” are counted. “Eligible employees” are defined as permanent employees actively engaged on a full-time basis with a normal workweek of an average of 30 hours per week. Permanent employees who work between 20 and 29 hours per week may also be deemed eligible employees if specified criteria are met.
Historically, the federal government has allowed states to use methods to count employees that differ from federal methods. Specifically, in 2012, HHS issued a transitional policy stating that it would not take enforcement action against an exchange for including a group in the small group market based on a definition that does not include part-time employees when the group should have been classified as part of the large group market based on the federal definition. HHS also indicated that, given the option for states to define small employers as those with one to 50 employees, states would generally take legislative action before January 1, 2016 to redefine small employers to conform to the federal definition of one to 100 employees. HHS assumed that, at that time, states could also act to adopt an employee counting method that is consistent with federal law.
California law already complies with the federal definition of small employers having one to 100 employees. However, as previously stated, it does not conform to the FTE method of counting employees. The federal government recently indicated in the 2014 Notice of Benefit and Payment Parameters regulations that states must conform to the FTE method for products sold in the Exchange for the 2016 plan year. This bill conforms state law to those federal regulations, and applies to plans and insurers both inside and outside of the Exchange.
CHBRP. Established in 2002, pursuant to AB 1996 (Thomson), Chapter 795, Statutes of 2002, CHBRP responds to requests from the Legislature to provide independent analysis of the medical, financial, and public health impacts of proposed health insurance benefit mandates and repeals. CHBRP is administered in the UC Office of the President, and has staff that supports faculty from six UC campuses and three private universities to complete each analysis. Health plans and insurers are assessed an annual fee to fund CHBRP in an amount not to exceed $2 million.
Since 2004, CHBRP has analyzed 112 bills, 45 of which were passed by the Legislature and enrolled to the Governor. Thirty-three of those bills analyzed were vetoed, and 11 were signed into law. Since CHBRP’s inception, the number of bills mandating benefits and services has fluctuated. When AB 1996 was under considered by the Legislature, the author cited more than 14 mandate bills introduced during the 2001-02 legislative session. In 2003, the first year that the UC received requests for analysis of mandate bills, only four were introduced and analyzed. The following year, there were 13 mandate bills analyzed. Between 2005 and 2014, the number of mandate bills introduced has varied, with the largest number (15 mandate bills) in 2011.
In 2015, to date, CHBRP has analyzed seven bills, and is currently in the process of completing analyses on two additional bills. Not all of these contain benefit mandates. However, those that do not are considered to have potential market impacts worthy of analysis. Additionally, in previous years, CHBRP has analyzed bills that did not contain specific benefit mandates, but that had similar effects as a mandate on coverage requirements.
With the passage of the ACA, and the establishment of EHBs, policymakers have generally endeavored to discourage additional legislation to alter state mandated benefits until the ACA has been implemented and the implications of EHBs were known. Further, the state must defray the costs of federal subsidies to cover any benefit mandate enacted that exceeds EHBs. As such, the potential costs to the state may serve as a deterrent for bills mandating benefits not already covered by EHBs. These factors combined may result in fewer mandate bills for CHBRP to analyze. Additionally, some legislative proposals that may not include a direct benefit mandate may contain provisions that could have a similar effect on coverage requirements. As such, flexibility in the types of bills sent to CHBRP for analysis may be warranted.
CHBRP analyses are to be provided within 60 days of receipt of a request from the Legislature. However, CHBRP had developed a model that has resulted in some analyses not being completed prior to the 60-day deadline. According to CHBRP's 2013 report to the Legislature, the 60-day clock is initiated upon receipt of a request from a Senate or Assembly Health Committee, and it uses a 60-day timeline that details which activities occur on what day. CHBRP indicated that it must have sufficient capacity to perform multiple analyses on simultaneous 60-day timelines. CHBRP faculty, actuaries, librarians, reviewers, and staff must produce and review multiple drafts on multiple bills in a very compressed timeframe, given their model.
This timeline has led to some challenges for incorporating CHBRP's assessment into policy committee analyses used by Legislators and the public at the time of the bill hearing, particularly for benefit mandate bills that are introduced close to the bill introduction deadline. Since the bill introduction deadline is around 60 days prior to the deadline for policy committees to hear bills, mandate bills introduced at or near the deadline are almost always scheduled for the final hearing prior to the policy committee deadline for fiscal bills, leaving a short period of time between the receipt of the CHBRP analysis and the time the committee analysis must be completed. This arrangement gives the Health Committees little time to incorporate its findings in a meaningful way into the Committee analysis.
SUPPORT. Proponents support this bill's provisions regarding CHBRP, stating that CHBRP provides a valuable, independent analysis of the medical, financial, and public health impacts of proposed benefit mandates and repeals, making it possible for the Legislature to properly weigh the potential health benefits and costs to the system. Supporters also note the need to maintain consistency between open enrollment periods set forth in state law and federal regulation.
SUPPORT IF AMENDED. Health Access California (HAC) states that the bill's language requesting CHBRP to assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics lacks focus, and is so broad it could encompass any health insurance legislation, and depending on the interpretation, could also include legislation regarding Medi-Cal. HAC seeks amendments to limit the language to apply only to legislation impacting benefit design or cost sharing for private health insurance, and to ensure that an analysis on such legislation includes the likely impact on premiums and actuarial value.
OPPOSITION. The California Right to Life Committee (CRLC) states that, under this bill, CHBRP analyses must include the impact on EHBs. CRLC states that EHBs include "preventative" services which can include reproductive health and abortion services. CRLC opposes any effort to include or require that abortion is an essential service or one called "preventative."
RELATED LEGISLATION. AB 1102 (Santiago) requires a health plan insurer to allow an individual to enroll in or change an individual plan or policy, outside of open enrollment periods, as a result of pregnancy. AB 1102 is pending in the Assembly Appropriations Committee.
PREVIOUS LEGISLATION.
AB 1578 (Pan) of 2014 would have extended CHBRP’s sunset date to June 30, 2016. AB 1578 failed passage in the Assembly.
SB 20 (Ed Hernandez), Chapter 24, Statutes of 2014, requires a plan or insurer to provide annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
SB 1465 (Committee on Health), Chapter 442, Statutes of 2014, extends the CHBRP’s sunset date to December 31, 2015.
AB 1083 (Monning), Chapter 852, Statutes of 2012, reforms California’s small group health insurance laws to enact the ACA, including requirements for all small group health insurance to provide coverage for EHBs, and defines small employers for plan years commencing on or after January 1, 2014, as having 1 to 50 eligible employees, and commencing on or after January 1, 2016, 1 to 100 eligible employees, as specified.
AB 1540 (Committee on Health), Chapter 298, Statutes of 2009, extends CHBRP’s sunset date to June 30, 2015.
SB 1704 (Kuehl), Chapter 684, Statutes of 2006, extends CHBRP’s sunset date to January 1, 2011 and added legislation proposing to repeal a mandated benefit or service to the types of legislation that the Legislature requests CHBRP assess. Extended the sunset date of the program to January 1, 2011.
AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the UC to establish CHBRP to, within 60 days of receiving a request by the Legislature, review legislation proposing to mandate or repeal a health plan or health insurance benefit or service for public health, medical, and financial impacts; sunsets CHBRP on January 1, 2007.
POLICY COMMENTS.
This bill applies FTE method of counting employees to determine employer size for products sold both inside and outside of the Exchange. An overarching goal in the implementation of the ACA in California is to ensure, to the extent possible, that laws applicable to plans and insurers participating in the Exchange are also applied to plans and insurers sold outside of the Exchange so as to ensure a level regulatory playing field, and parity between the markets. While federal regulations require the use of the FTE method to determine employer size solely for the purposes of the Exchange, this bill is consistent with this goal by requiring the use of the FTE method both inside and outside of the Exchange.
Clarifying CHBRP’s sunset date. It is commonly stated that CHBRP will sunset on June 30, 2015, even though its statutory sunset date is December 31, 2015. For clarification, under current law, the fee assessed on health plans and insurers to support CHBRP is authorized only through the end of the 2014-15 for fiscal year, which is June 30, 2015. Thus, while CHBRP is set to sunset on December 31, 2015, funding to support CHBRP is only available through June 30, 2015.
SUGGESTED AMENDMENT. The author may wish to consider the following clarifying amendment:
Proposed Health and Safety Code Section 1357.500(k)(3) and Insurance Code Section 10753(q)(3):
For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining the number of employees that count towards whether the employer group is subject to this article, shall be determined using the method for counting full-time equivalent employees set forth in Section 4980(c)(2) of the Internal Revenue Code.
REGISTERED SUPPORT / OPPOSITION:
Support
Anthem Blue Cross (previous version)
Association of California Life and Health Insurers (previous version)
California Association of Health Plans (previous version)
California Chamber of Commerce (previous version)
California Immigrant Policy Center (previous version)
Health Access California (if amended)
Western Center on Law and Poverty (previous version)
Opposition
California Right to Life Committee (previous version)
Analysis Prepared by: Kelly Green / HEALTH / (916) 319-2097
SB 125
Page 8
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Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: SB 125
Amended: 4/6/15
SENATE HEALTH COMMITTEE: 8-0, 3/25/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Wolk
NO VOTE RECORDED: Roth
SENATE APPROPRIATIONS COMMITTEE: 6-0, 4/13/15
AYES: Lara, Bates, Beall, Leyva, Mendoza, Nielsen
NO VOTE RECORDED: Hill
DIGEST: This bill requests the California Health Benefit Review Program (CHBRP) to analyze the impact of specified legislation on essential health benefits and Covered California, as well as legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. Requests the analyses to be provided to the Legislature in a manner pursuant to a timeline agreed upon by CHBRP and the Legislature. Extends the fee assessed on health plans and insurers for this purpose until fiscal year 2016-17. Extends the sunset date of CHBRP to June 30, 2017. Establishes an annual open enrollment period for purchasers in the individual health insurance market for the policy year beginning on January 1, 2016, from November 1, of the preceding calendar year, to January 31, of the benefit year, inclusive.
ANALYSIS:
Existing law:
Requests the University of California (UC) to establish the CHBRP to assess, as specified and not later than 60 days from receiving a request by the Legislature, legislation proposing to mandate or repeal a health plan or health insurance benefit or service for public health, medical, and financial impacts.
Requires health plans, except specialized health plans, and health insurers, for fiscal years 2010-11 to 2014-15, to be assessed an annual fee to fund CHBRP, as specified, not to exceed $2 million.
Sunsets CHBRP on June 30, 2015.
Requires health plans and insurers to limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods.
Requires plans and insurers to provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill:
Requests CHBRP, in addition to analyzing the public health impacts, medical effectiveness, and financial impacts of legislation proposing to mandate or repeal a benefit or service, to also analyze the impact on essential health benefits (EHBs) and Covered California.
Requests CHBRP to assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
Requests analyses to be provided to the appropriate committees of the Legislature in a manner pursuant to a timeline agreed upon by the Legislature and CHBRP.
Extends the fee assessed on health plans and insurers to fiscal year 2016-17.
Requests CHBRP to submit a report to the Governor and Legislature by
January 1, 2017, regarding the implementation of the program.Extends the sunset date of CHBRP to June 30, 2017.
Establishes an annual open enrollment period for the policy year beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31, of the benefit year, inclusive.
Contains an urgency clause that will make this bill effective upon enactment.
Background
Affordable Care Act (ACA). The ACA represents a major expansion of U.S. health care coverage through an expansion and simplification of the Medicaid program and the adoption of major reforms of the health insurance market. Most transformational are changes to the small group and individual insurance markets, such as mandating guaranteed issuance of coverage, eliminating pre-existing condition exclusions, limiting factors upon which premium rates can be developed, and authorizing the creation of health benefit exchanges either at the state or federal level.
California took early steps to establish Covered California, pass rate review requirements, establish EHBs, and adopt insurance market reforms to implement aspects of the ACA, in some cases before federal regulatory guidance was issued or finalized. An overarching objective in the development of California implementing legislation was to ensure, to the extent possible, that laws applicable to plans and insurers participating in Covered California were also applied to plans and insurers not participating in Covered California in order to keep a level, regulatory playing field. For example, open and special enrollment periods not only apply to qualified health plans (QHPs) but also to health plans and insurers not participating in Covered California. As such, for the individual market, an initial open enrollment period of October 1, 2013, to March 31, 2014, and annual open enrollment period of November 15, 2014, to February 15, 2015, for the 2015 benefit year apply to QHPs and health plans and insurers not participating in Covered California. The federal Department of Health and Human Services (HHS) initially issued a regulation to maintain an annual open enrollment period, for policy years beginning on or after January 1, 2016, from November 1 to December 15, inclusive, of the preceding calendar year. On February 20, 2015, HHS issued the “Final HHS Notice of Benefit and Payment Parameters for 2016,” which requires the annual open enrollment period for the 2016 policy year to be November 1, of the preceding calendar year, to January 31, of the benefit year. HHS made these changes to give health insurance carriers additional time before they would need to set their 2016 rates and submit their QHPs applications, give states and HHS more time to prepare for open enrollment, and give consumers more time to shop for coverage.
EHBs. Among many other provisions, the ACA requires Medicaid benchmark and benchmark-equivalent plans, plans sold through the Exchange, and health plans and health insurers providing coverage to individuals and small employers to ensure coverage of EHBs, as defined by HHS. HHS is required to ensure that the scope of EHBs is equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. Under federal law, EHBs must include 10 general categories and the items and services covered within specified categories.
On December 16, 2011, the HHS Center for Consumer Information and Insurance Oversight released a bulletin proposing that EHBs be defined using a benchmark approach. SB 951 (Hernandez, Chapter 866, Statutes of 2012) and AB 1453 (Monning, Chapter 854, Statutes of 2012) designated the Kaiser Small Group HMO as California’s benchmark plan to serve as the EHB standard. The state has to defray the costs of federal subsidies to cover any mandate enacted that is beyond what is contained in EHBs pursuant to SB 951 and AB 1453. The 2016 Notice of Benefit and Payment Parameters final rule includes a definition of habilitative, which differs from California’s definition, and proposes that states select new benchmark plans for 2017 based on plans available in 2014. SB 43 (Hernandez) has been introduced to update California’s EHB benchmark selection.
Covered California. Through SB 900 (Alquist, Chapter 659, Statutes of 2010) and AB 1602 (Perez, Chapter 655, Statutes of 2010), California was the first state in the nation to establish a Health Benefit Exchange (known as Covered California). Adopting its Board of Directors in October 2011, Covered California’s vision is to improve the health of all Californians by assuring their access to affordable, high quality care. According to Covered California, it is an easy-to-use marketplace where individuals can get financial assistance to make coverage more affordable and where people can compare and choose health coverage. As of March 31, 2014, approximately 3.2 million Californians have enrolled in coverage since October 1, 2013, including 1.9 million in Medi-Cal.
California Health Benefits Review Program. CHBRP was established under AB 1996 (Thomson), Chapter 795, Statutes of 2002, which requested the University of California (UC) to assess legislation that proposes a mandated benefit or service (referred to as “mandate bills”) and prepare a timely written analysis within 60 days with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. Current law requires health plans, except specialized health plans, and health insurers, for fiscal years 2010-11 to 2014-15, to be assessed an annual fee to fund CHBRP; this amount is to not to exceed $2 million. CHBRP is administered in the UC Office of the President and has staff that supports a task force of faculty from six UC campuses (Berkeley, Davis, Irvine, Los Angeles, San Diego, and San Francisco) and three private universities (Loma Linda University, the University of Southern California, and Stanford University). CHBRP is set to sunset on December 31, 2015. The Governor’s proposed budget provides $2 million for CHBRP.
Number of mandate bills. Since CHBRP’s inception, the number of bills mandating benefits and services has fluctuated, and in the last year has decreased significantly. When AB 1996 was being considered by the Legislature, the author stated that during the 2001-2002 legislative session, more than 14 mandate bills were introduced. The author believed that UC would facilitate the provision of quality, cost-effective health services by providing current, accurate data and information to the Governor and the Legislature for the purpose of determining health-related programs and policies in connection with proposed legislation. In 2003, the first year that the UC received requests for analysis of mandate bills, only four were introduced and analyzed. The following year, there were 13 mandate bills analyzed. Between 2005 and 2014, the number of mandate bills introduced has varied, with the largest number (15 mandate bills) in 2011. With the passage of the ACA, and the establishment of EHBs, policymakers have worked to ensure the successful implementation of the ACA and Covered California, and have endeavored to discourage any additional legislation to alter state mandated benefits until the implications on EHBs were known.
New ways to tweak coverage requirements. In the 11 years since CHBRP has been analyzing mandate bills, various stakeholders and interest groups have developed legislative proposals other than mandates to have a similar effect on coverage requirements. These have included:
SB 639 (Hernandez, Chapter 316, Statutes of 2013) places in California law provisions of the ACA relating to out-of-pocket limits on health plan enrollee and insured cost-sharing, health plan and insurer actuarial value coverage levels and catastrophic coverage requirements, and requirements on health insurers with regard to coverage for out-of-network emergency services. Applies health plan enrollee and insured out-of-pocket limits to specialized products that offer EHBs.
AB 1800 (Ma, 2012) would have implemented provisions of the ACA related to prohibitions on health plans and health insurers from imposing out-of-pocket maximum caps which exceed specified levels. The bill was held in the Senate Appropriations Committee.
AB 310 (Ma, 2011) would have prohibited health plan contracts and health insurance policies that cover outpatient prescription drugs from requiring coinsurance, as defined, as a basis for cost sharing for outpatient prescription drug benefits and imposes specified limitations on copayments, as defined, and out-of-pocket expenses for outpatient prescription drugs. The bill was held in the Assembly Appropriations Committee.
60-day timeline. AB 1996 and subsequent legislation that extended CHBRP included a request that analyses be provided to the Legislature within 60 days. CHBRP developed a model that has resulted in analyses not being completed prior to that 60-day deadline. According to CHBRP’s 2013 report to the Legislature, it uses a 60-day timeline that details which activities occur on what day. The 60-day clock is initiated by CHBRP upon receipt of a request from the Senate or Assembly Health Committee. According to CHBRP, it must have sufficient capacity to do multiple (e.g., eight or more) analyses on simultaneous 60-day timelines. CHBRP faculty, actuaries, librarians, reviewers, and staff must produce and review multiple drafts on multiple bills in what they consider a very compressed timeframe, given their model. This timeline has led to challenges for incorporating CHBRP’s assessment into the policy committee analysis used by legislators and the public at the time of the bill hearing. Oftentimes mandate bills are introduced close to the bill introduction deadline, which is also about 60 days before deadline for policy committees to hear bills, meaning mandate bills are almost always scheduled for the final hearing prior to the policy committee deadline for fiscal bills. Therefore, there is a tight window between the time the CHBRP analysis is received and the Committee analysis must be completed.
Prior Legislation
AB 1996 (Thomson, Chapter 795, Statutes of 2002) requests UC (which created CHBRP in response), until January 1, 2007, to, within 60 days of receiving a request by the Legislature, review legislation proposing to mandate or repeal a health plan or health insurance benefit or service for public health, medical, and financial impacts.
SB 1704 (Kuehl, Chapter 684, Statutes of 2006) extended CHBRP’s sunset date to January 1, 2011, and added legislation proposing to repeal a mandated benefit or service to the types of legislation that the Legislature requests CHBRP assess. Extended the sunset date of the program to January 1, 2011.
AB 1540 (Committee on Health, Chapter 298, Statutes of 2009) extends CHBRP’s sunset date to June 30, 2015.
SB 1465 (Committee on Health, Chapter 442, Statutes of 2014) extends the CHBRP’s sunset date to December 31, 2015.
SB 20 (Hernandez, Chapter 24, Statutes of 2014) requires a plan or insurer to provide annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
AB 1578 (Pan, 2014) would have extended CHBRP’s sunset date to June 30, 2016. AB 1578 died in the Assembly.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Senate Appropriations Committee analysis, annual costs of $2 million to support the CHBRP (within the UC), supported by an assessment on health plans and health insurers (Health Care Benefits Fund).
Minor administrative costs for the California Health Benefits Exchange to revise existing regulations to conform to the updated open enrollment period. According to the Exchange, the required changes to existing regulations can be included within an existing package of regulations and therefore there is no additional cost anticipated. Similarly, the Exchange has already planned to update information technology systems to accommodate this change, so no new costs are anticipated.
No significant costs are anticipated for the Department of Insurance or the Department of Managed Health Care.
Anthem Blue Cross
California Association of Health Plans
California Chamber of Commerce
California Immigrant Policy Center
Kaiser Permanente
L.A. Care Health Plan
Western Center on Law and Poverty
OPPOSITION: (Verified 4/13/15)
California Right to Life Committee, Inc.
ARGUMENTS IN SUPPORT: Proponents of this bill note the significance of the analyses produced by CHBRP as well as the necessity to maintain consistency between open enrollment periods for health benefit plans in California and federal regulations. The California Association of Health Plans believes the changes to the individual annual open enrollment periods should be made to conform to federal law and guidance as soon as possible to allow for greater clarity on the matter for health plans, consumers, and regulators. The California Chamber of Commerce also acknowledges the need to extend the operative date for CHBRP in order to make it possible for the Legislature to fully weigh the potential health benefits and costs to the system related to a particular proposal.
ARGUMENTS IN OPPOSITION: The California Right to Life Committee, Inc. opposes the bill because of the request to include EHBs into the CHBRP analyses. The opponents note that EHBs can include preventative services which encompasses reproductive health and abortion services. The California Right to Life Committee, Inc. continues to oppose any effort to include or require that abortion is an essential service or one called preventative.
Prepared by: Melanie Moreno / HEALTH / (916) 651-4111
4/15/15 16:28:55
**** END ****
SB 125 (Hernandez) Page 3 of 3
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular
SB 125 (Hernandez) - Health care coverage
|
|
Version: April 6, 2015 |
Policy Vote: HEALTH 8 - 0 |
Urgency: Yes |
Mandate: Yes |
Hearing Date: April 13, 2015 |
Consultant: Brendan McCarthy |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
SB 125 would extend the sunset of the California Health Benefits Review Program for two years and would extend the existing assessment on health plans and health insurers to support the program.
SB 125 would also change the open enrollment period for purchase of individual health care coverage for the 2016 calendar year and subsequent years to November 1 through January 31, to comply with recent federal guidelines.
Fiscal Impact:
Annual costs of $2 million to support the California Health Benefits Review Program (within the University of California), supported by an assessment on health plans and health insurers (Health Care Benefits Fund).
Minor administrative costs for the California Health Benefits Exchange to revise existing regulations to conform to the updated open enrollment period. According to the Exchange, the required changes to existing regulations can be included within an existing package of regulations and therefore there is no additional cost anticipated. Similarly, the Exchange has already planned to update information technology systems to accommodate this change, so no new costs are anticipated.
No significant costs are anticipated for the Department of Insurance or the Department of Managed Health Care.
Background:
Under current law, the Legislature requests the University of California to establish the California Health Benefits Review Program. The Program is established to provide assistance to the Legislature in its review of proposed laws that would mandate benefits or services to be covered by health plans and health insurers. The Program provides information on the medical effectiveness and projected costs of proposed new benefit mandates. Current law requests the Program to provide a requested analysis within 60 days of receiving a request from the Legislature.
Under current law, health plans and health insurers pay an annual assessment, not to exceed $2 million, to support the operations of the Program.
These provisions of law become inoperative on June 30, 2015 and sunset on December 31, 2015. In addition, the statutory authority to collect the assessment from health plans and health insurers ends at the end of the 2014-15 fiscal year. (The Governor’s January budget proposal for 2015-16 includes $2 million in proposed funding for the Program.)
Also under current law, health plans and health insurers selling products in the individual market are required to provide an open enrollment period from November 15, 2014 to February 15, 2015 for the 2015 calendar year and an open enrollment period from October 15, 2015 to December 7, 2015 for the 2016 calendar year and subsequent years.
On February 20, 2015 the federal government released final guidance requiring an open enrollment period from November 1, 2015 to January 31, 2016 for the 2016 calendar year.
Proposed Law:
SB 125 would extend the sunset on the California Health Benefits Review Program for two years June 30, 2017. The bill would expand the requested activities of the Program to include analyses of the impact of proposed benefit mandates on the California Health Benefit Exchange and analyses of proposed laws that impact health care coverage benefit design, cost sharing, and other topics. The bill would also specify that the Program shall complete its analyses within 60 days or in a manner and timeline agreed to with the Legislature.
The bill would extend the assessment on health plans and health insurers to support the program until June 30, 2017.
SB 125 would also change the open enrollment period for purchase of individual health care coverage for the 2016 calendar year and subsequent years to November 1 through January 31.
This bill is an urgency measure.
Related Legislation:
AB 1578 (Pan) would have extended the sunset of the California Health Benefits Review Program until June 30, 2016. That bill died in the Assembly on concurrence.
Staff Comments:
The statutory authority for the California Health Benefits Review Program does not end until the end of 2016. However, the authority to collect the assessment that supports the program ends on June 30, 2015. In order to continue the operation of the California Health Benefits Review Program, this bill is necessary to extend the source of funding.
Under the California Constitution, the Legislature has limited authority over the University of California. The Legislature generally cannot mandate the University to conduct specific program activities. Therefore, current law and this bill request the University to operate the California Health Benefits Review Program.
The only costs that may be incurred by a local agency relate to crimes or infractions. Under the California Constitution, such costs are not reimbursable by the state.
-- END --
SB 125 (Hernandez) Page 8 of 8
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 125
AUTHOR: |
Hernandez |
||
VERSION: |
February 26, 2015 |
||
HEARING DATE: |
March 25, 2015 |
|
|
CONSULTANT: |
Melanie Moreno |
||
SUBJECT: Health care coverage
SUMMARY:
Requests the California Health Benefit Review Program (CHBRP) to analyze the impact of specified legislation on essential health benefits and Covered California, as well as legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. Requests the analyses to be provided to the Legislature in a manner pursuant to a timeline agreed upon by CHBRP and the Legislature. Extends the fee assessed on health plans and insurers for this purpose until fiscal year 2016-17. Extends the sunset date of CHBRP to June 30, 2017. Establishes an annual open enrollment period for purchasers in the individual health insurance market for the policy year beginning on January 1, 2016, from November 1, of the preceding calendar year, to January 31, of the benefit year, inclusive.
Existing law:
Requests the University of California (UC) to establish the CHBRP to assess, as specified and not later than 60 days from receiving a request by the Legislature, legislation proposing to mandate or repeal a health plan or health insurance benefit or service for public health, medical, and financial impacts.
Requires health plans, except specialized health plans, and health insurers, for fiscal years 2010-11 to 2014-15, to be assessed an annual fee to fund CHBRP, as specified, not to exceed $2 million.
Sunsets CHBRP on June 30, 2015.
Requires health plans and insurers to limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods.
Requires plans and insurers to provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
This bill:
Requests CHBRP, in addition to analyzing the public health impacts, medical effectiveness, and financial impacts of legislation proposing to mandate or repeal a benefit or service, to also analyze the impact on essential health benefits (EHBs) and Covered California.
Requests CHBRP to assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.
Requests analyses to be provided to the appropriate committees of the Legislature in a manner pursuant to a timeline agreed upon by the Legislature and CHBRP.
Extends the fee assessed on health plans and insurers to fiscal year 2016-17.
Requests CHBRP to submit a report to the Governor and Legislature by January 1, 2017 regarding the implementation of the program.
Extends the sunset date of CHBRP to June 30, 2017.
Establishes an annual open enrollment period for the policy year beginning on or after January 1, 2016, from November 1, of the preceding calendar year, to January 31, of the benefit year, inclusive.
Contains an urgency clause that will make this bill effective upon enactment.
FISCAL EFFECT:
This bill has not been analyzed by a fiscal committee.
COMMENTS:
Author’s statement. According to the author, SB 125 updates California statutes to reflect the new, post-Affordable Care Act (ACA) environment by reauthorizing CHBRP and incorporating EHB and health insurance exchanges (Covered California) into their work. The bill also expands the breadth of CHBRP’s studies by requesting the inclusion of impacts from legislation on health insurance benefit design, cost sharing, premiums, and other health insurance topics in their assessments.
SB 125 also revises the open enrollment period in the individual market to remain consistent with federal regulations beginning with the 2016 benefit year. The open enrollment period in the individual market will begin from November 1 of the preceding calendar year to January 31, of the benefit year, inclusive, for benefit years beginning on or after January 1, 2016. The change in open enrollment dates for the individual market is to not only align with federal regulations, but to also allow the consumers adequate time for plan choice or changes to their plan prior to a January 1 effective date of coverage.
Affordable Care Act. The Affordable Care Act (ACA), enacted on March 23, 2010 and amended on March 30, 2010, represents a major expansion of U.S. health care coverage through an expansion and simplification of the Medicaid program and the adoption of major reforms of the health insurance market. Most transformational are changes to the small group and individual insurance markets, such as mandating guaranteed issuance of coverage, eliminating pre-existing condition exclusions, limiting factors upon which premium rates can be developed, and authorizing the creation of health benefit exchanges either at the state or federal level.
California took early steps to establish Covered California, pass rate review requirements, establish essential health benefits, and adopt insurance market reforms to implement aspects of the ACA, in some cases before federal regulatory guidance was issued or finalized. An overarching objective in the development of California implementing legislation was to ensure, to the extent possible, that laws applicable to plans and insurers participating in Covered California were also applied to plans and insurers not participating in Covered California in order to keep a level, regulatory playing field. For example, open and special enrollment periods not only apply to qualified health plans (QHPs) but also to health plans and insurers not participating in Covered California. As such, for the individual market, an initial open enrollment period of October 1, 2013 to March 31, 2014 and annual open enrollment period of November 15, 2014, to February 15, 2015 for the 2015 benefit year apply to QHPs and health plans and insurers not participating in Covered California. The federal Department of Health and Human Services (HHS) initially issued a regulation to maintain an annual open enrollment period, for policy years beginning on or after January 1, 2016, from November 1 to December 15, inclusive, of the preceding calendar year. On February 20, 2015, HHS issed the “Final HHS Notice of Benefit and Payment Parameters for 2016,” which requires the annual open enrollment period for the 2016 policy year to be November 1, of the preceding calendar year, to January 31, of the benefit year. HHS made these changes to give health insurance carriers additional time before they would need to set their 2016 rates and submit their QHPs applications, give states and HHS more time to prepare for open enrollment, and give consumers more time to shop for coverage.
EHBs. Among many other provisions, the ACA requires Medicaid benchmark and benchmark-equivalent plans, plans sold through the Exchange, and health plans and health insurers providing coverage to individuals and small employers to ensure coverage of EHBs, as defined by HHS. HHS is required to ensure that the scope of EHBs is equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. Under federal law, EHBs must include 10 general categories and the items and services covered within the following categories:
Ambulatory patient services;
Emergency services;
Hospitalization;
Maternity and newborn care;
Mental health and substance use disorder services, including behavioral health treatment;
Prescription drugs;
Rehabilitative and habilitative services and devices;
Laboratory services;
Preventive and wellness services and chronic disease management; and,
Pediatric services, including oral and vision care.
On December 16, 2011, the HHS Center for Consumer Information and Insurance Oversight released a bulletin proposing that EHBs be defined using a benchmark approach. SB 951 (Hernandez), Chapter 866, Statutes of 2012 and AB 1453 (Monning), Chapter 854, Statutes of 2012 designated the Kaiser Small Group HMO as California’s benchmark plan to serve as the EHB standard. The state has to defray the costs of federal subsidies to cover any mandate enacted that is beyond what is contained in EHBs pursuant to SB 951 and AB 1453. The 2016 Notice of Benefit and Payment Parameters final rule includes a definition of habilitative, which differs from California’s definition, and proposes that states select new benchmark plans for 2017 based on plans available in 2014. SB 43 (Hernandez) has been introduced to update California’s EHB benchmark selection.
Covered California. Through SB 900 (Alquist) Chapter 659, Statutes of 2010, and AB 1602 (Perez), Chapter 655, Statutes of 2010, California was the first state in the nation to establish a Health Benefit Exchange (known as Covered California). Adopting its Board of Directors in October 2011, Covered California’s vision is to improve the health of all Californians by assuring their access to affordable, high quality care. According to Covered California, it is an easy-to-use marketplace where individuals can get financial assistance to make coverage more affordable and where people can compare and choose health coverage. As of March 31, 2014, approximately 3.2 million Californians have enrolled in coverage since October 1, 2013, including 1.9 million in Medi-Cal.
California Health Benefits Review Program. CHBRP was established under AB 1996 (Thomson), Chapter 795, Statutes of 2002, which requested UC to assess legislation that proposes a mandated benefit or service (referred to as “mandate bills”) and prepare a timely written analysis within 60 days with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. Current law requires health plans, except specialized health plans, and health insurers, for fiscal years 2010-11 to 2014-15, to be assessed an annual fee to fund CHBRP, this amount is to not to exceed $2 million. CHBRP is administered in the UC Office of the President and has staff that supports a task force of faculty from six UC campuses (Berkeley, Davis, Irvine, Los Angeles, San Diego, and San Francisco) and three private universities (Loma Linda University, the University of Southern California, and Stanford University). CHBRP is set to sunset on December 31, 2015. The Governor’s proposed budget provides $2 million for CHBRP.
Number of mandate bills. Since CHBRP’s inception, the number of bills mandating benefits and services has fluctuated, and in the last year has decreased significantly. When AB 1996 was being considered by the Legislature, the author stated that during the 2001-2002 legislative session, more than 14 mandate bills were introduced. The author believed that UC would facilitate the provision of quality, cost-effective health services by providing current, accurate data and information to the Governor and the Legislature for the purpose of determining health-related programs and policies in connection with proposed legislation. In 2003, the first year that the UC received requests for analysis of mandate bills, only four were introduced and analyzed. The following year, there were 13 mandate bills analyzed. Between 2005 and 2014, the number of mandate bills introduced has varied, with the largest number (15 mandate bills) in 2011. With the passage of the ACA, and the establishment of EHBs, policymakers have worked to ensure the successful implementation of the ACA and Covered California, and have endeavored to discourage any additional legislation to alter state mandated benefits until the implications on EHBs were known.
New ways to tweak coverage requirements. In the 10 years since CHBRP has been analyzing mandate bills, various stakeholders and interest groups have developed legislative proposals other than mandates to have a similar effect on coverage requirements. These have included:
SB 639 (Hernandez), Chapter 316, Statutes of 2013 places in California law provisions of the ACA relating to out-of-pocket limits on health plan enrollee and insured cost-sharing, health plan and insurer actuarial value coverage levels and catastrophic coverage requirements, and requirements on health insurers with regard to coverage for out-of-network emergency services. Applies health plan enrollee and insured out-of-pocket limits to specialized products that offer EHBs.
AB 1800 (Ma), of 2012, would have implemented provisions of the ACA related to prohibitions on health plans and health insurers from imposing out-of-pocket maximum caps which exceed specified levels. AB 1800 was held in the Senate Appropriations Committee.
AB 310 (Ma), of 2011, would have prohibited health plan contracts and health insurance policies that cover outpatient prescription drugs from requiring coinsurance, as defined, as a basis for cost sharing for outpatient prescription drug benefits and imposes specified limitations on copayments, as defined, and out-of-pocket expenses for outpatient prescription drugs. AB 310 was held in Assembly Appropriations Committee.
60-day Timeline. AB 1996 and subsequent legislation that extended CHBRP included a request that analyses be provided to the Legislature within 60 days. CHBRP developed a model that has resulted in analyses not being completed prior to that 60-day deadline. According to CHBRP’s 2013 report to the Legislature, it uses a 60-day timeline that details which activities occur on what day. The 60-day clock is initiated by CHBRP upon receipt of a request from the Senate or Assembly Health Committee. According to CHBRP, it must have sufficient capacity to do multiple (e.g., eight or more) analyses on simultaneous 60-day timelines. CHBRP faculty, actuaries, librarians, reviewers, and staff must produce and review multiple drafts on multiple bills in what they consider a very compressed timeframe, given their model. This timeline has led to challenges for incorporating CHBRP’s assessment into the policy committee analysis used by legislators and the public at the time of the bill hearing. Often times mandate bills are introduced close to the bill introduction deadline, which is also about 60 days before deadline for policy committees to hear bills, meaning mandate bills are almost always scheduled for the final hearing prior to the policy committee deadline for fiscal bills. Therefore, there is a tight window between the time the CHBRP analysis is received and the Committee analysis must be completed.
Prior legislation. AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests UC (which created CHBRP in response), until January 1, 2007, to, within 60 days of receiving a request by the Legislature, review legislation proposing to mandate or repeal a health plan or health insurance benefit or service for public health, medical, and financial impacts.
SB 1704 (Kuehl), Chapter 684, Statutes of 2006, extends CHBRP’s sunset date to January 1, 2011 and added legislation proposing to repeal a mandated benefit or service to the types of legislation that the Legislature requests CHBRP assess. Extended the sunset date of the program to January 1, 2011.
AB 1540 (Committee on Health), Chapter 298, Statutes of 2009, extends CHBRP’s sunset date to June 30, 2015.
SB 1465 (Committee on Health), Chapter 442, Statutes of 2014, extends the CHBRP’s sunset date to December 31, 2015.
SB 20 (Hernandez), Chapter 24, Statutes of 2014, requires a plan or insurer to provide annual enrollment periods for policy years beginning on or after January 1, 2016, from October 15 to December 7, inclusive, of the preceding calendar year.
AB 1578 (Pan) of 2014 would have extended CHBRP’s sunset date to June 30, 2016. AB 1578 died in the Assembly.
Support. Proponents of the bill note the significance of the analyses produced by CHBRP as well as the necessity to maintain consistency between open enrollment periods for health benefit plans in California and federal regulations. The California Association of Health Plans believes the changes to the individual annual open enrollment periods should be made to conform to federal law and guidance as soon as possible to allow for greater clarity on the matter for health plans, consumers, and regulators. The California Chamber of Commerce also acknowledges the need to extend the operative date for CHBRP in order to make it possible for the Legislature to fully weigh the potential health benefits and costs to the system related to a particular proposal.
Support if amended. Health Access supports expanding CHBRP’s role to include review of essential health benefits for the individual and small group markets: their analysis of the legislation that initially implemented essential health benefits was useful. However, the bill requests that CHBRP “…assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.” According to Health Access, this added responsibility lacks focus. Health Access states that it is literally any legislation related to health insurance—and indeed is so broad that if one accepts the theory that there is cost shifting from public programs to private coverage, it would also encompass Medi-Cal and other public programs. Health Access states that this language might encompass legislation intended to address the quadruple aim, such as an All-Payer Claims Database, which would arguably affect “health insurance premiums” and that changes to rate review, including rate regulation, would also “impact” premiums.
Opposition. The California Right to Life Committee, Inc. opposes the bill because of the request to include EHBs into the CHBRP analyses. The opponents note that EHBs can include preventative services which encompasses reproductive health and abortion services. The California Right to Life Committee, Inc. continues to oppose any effort to include or require that abortion is an essential service or one called preventative.
Policy comments.
Committee staff surveyed stakeholders in 2013 and 2015 on CHBRP, its process, their work product, and the need for analysis on matters other than mandate bills. Overall, respondents were supportive of the function of CHBRP especially with regard to the fiscal implications of health insurance mandates and of housing it within UC despite challenges. Given the new post-ACA environment, there is need for additional in-depth, independent analysis beyond mandate bills. And while there is ongoing value to having independent evaluation, to be most valuable to stakeholders and policymakers, the analytic process has to be nimble and responsive to the legislative calendar. In order to make maximum use of this resource and to be more responsive, this bill expands CHBRP’s charge and applies a more flexible timeline.
The Senate Budget and Fiscal Review Subcommittee No. 1 on Education heard testimony from CHBRP staff about the program’s budget on March 12, 2015, as CHBRP receives its annual appropriation through the budget. CHBRP staff testified that they had made changes to the program to address concerns raised about timelines and report design. In particular, CHBRP staff indicated that they had initiated a pilot project that would ensure reports were released within 30 days of a request and that the report templates had been significantly streamlined and shortened. Through the budget process, there can be continued oversight to ensure the changes contained in this bill are implemented over the next year.
Amendments. The author has agreed to take the following amendment in Committee:
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(B) The
impact on the health of the community, including diseases and
conditions where gender
and racial
disparities in outcomes associated
with the social determinants of health as well as gender, race,
sexual orientation or gender identity are
established in peer-reviewed scientific and medical literature.
SUPPORT AND OPPOSITION:
Support: Anthem Blue Cross
California Association of Health Plans
California Chamber of Commerce
California Immigrant Policy Center
Kaiser Permanente
L.A. Care Health Plan
Western Center on Law and Poverty
Oppose: California Right to Life Committee, Inc.
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Discussed in Hearing
1MIN
Senate Floor
1MIN
Senate Floor
3MIN
Senate Standing Committee on Appropriations
4MIN
Senate Standing Committee on Health
Bill Author
Bill Co-Author(s):