AB 156: Individual market: enrollment periods.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2017-10-04
(1)Existing federal law, the Patient Protection and Affordable Care Act (PPACA), effective June 19, 2017, requires an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers to provide for the individual market an annual open enrollment period for policy years beginning on or after January 1, 2018, to begin on November 1 and extend through December 15 of the calendar year preceding the benefit year. Existing federal law establishes special enrollment periods during which a qualified individual may enroll in a qualified health plan when specified triggering events occur, such as when the qualified individual losses minimum essential coverage, as defined. Existing federal regulatory authority authorizes a state to establish additional special enrollment periods to supplement these special enrollment periods provided for under federal law under certain circumstances.
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 qualified small employers.
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 and health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans or health 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 offered both through and outside of the Exchange to specified open enrollment and special enrollment periods. Existing law requires a plan and health insurer to provide an annual enrollment period 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. Existing law requires a plan and health insurer, annually on or before October 1, to issue a notice to a subscriber and policyholder, as applicable, enrolled in any individual health benefit plan offered outside of the Exchange, and requires this notice to inform the subscriber and policyholder of, among other things, the applicable open enrollment period provided through the Exchange.
This bill would instead require, with respect to individual health benefit plans offered outside of the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive. The bill would instead require, with respect to individual health benefit plans offered through the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from November 1 to December 15 of the preceding calendar year, inclusive. The bill would require a health care service plan and a health insurer, with respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, to provide a special enrollment period that will allow individuals to enroll in individual health benefit plans through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive, and would require an application for a health benefit plan submitted during this special enrollment period to be treated the same as an application submitted during the annual open enrollment period. The bill would require a plan and health insurer to also include in the annual notice described above information regarding the applicable special enrollment periods. The bill would make conforming changes.
Because a willful violation of that requirement by a health care service plan would be a crime, this bill would impose a state-mandated local program.
(2)The PPACA creates various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums in the individual market inside and outside of the Exchanges. Under the transitional reinsurance program, contributions are collected from contributing entities to fund reinsurance payments to issuers of nongrandfathered reinsurance-eligible individual market plans and the administrative costs of operating the reinsurance program for the 2014, 2015, and 2016 benefit years.
Existing law requires a health care service plan and health insurer to consider the claims experience of all enrollees and all insureds in all nongrandfathered individual health benefit plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the individual market and to consider the claims experience of all enrollees and all insureds in all nongrandfathered small group market plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the small market. Existing law requires a plan and health insurer to establish, each calendar year, an index rate for those markets in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool and requires the index rate to 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 under the federal provisions described above and the Exchange user fees. Existing law requires the premium rate for all of the individual health benefit plans and small employer health benefit plans within the single risk pool to use the applicable marketwide adjusted index rate, as specified.
This bill would delete the reference to the federal transitional reinsurance program in these provisions.
(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.
(1)Existing federal law, the Patient Protection and Affordable Care Act (PPACA), effective June 19, 2017, requires an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers to provide for the individual market an annual open enrollment period for policy years beginning on or after January 1, 2018, to begin on November 1 and extend through December 15 of the calendar year preceding the benefit year. Existing federal law establishes special enrollment periods during which a qualified individual may enroll in a qualified health plan when specified triggering events occur, such as when the qualified individual losses minimum essential coverage, as defined. Existing federal regulatory authority authorizes a state to establish additional special enrollment periods to supplement these special enrollment periods provided for under federal law under certain circumstances.
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 qualified small employers.
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 and health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans or health 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 offered both through and outside of the Exchange to specified open enrollment and special enrollment periods. Existing law requires a plan and health insurer to provide an annual enrollment period 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. Existing law requires a plan and health insurer, annually on or before October 1, to issue a notice to a subscriber and policyholder, as applicable, enrolled in any individual health benefit plan offered outside of the Exchange, and requires this notice to inform the subscriber and policyholder of, among other things, the applicable open enrollment period provided through the Exchange.
This bill would instead require, with respect to individual health benefit plans offered outside of the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive. The bill would instead require, with respect to individual health benefit plans offered through the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from November 1 to December 15 of the preceding calendar year, inclusive. The bill would require a health care service plan and a health insurer, with respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, to provide a special enrollment period that will allow individuals to enroll in individual health benefit plans through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive, and would require an application for a health benefit plan submitted during this special enrollment period to be treated the same as an application submitted during the annual open enrollment period. The bill would require a plan and health insurer to also include in the annual notice described above information regarding the applicable special enrollment periods. The bill would make conforming changes.
Because a willful violation of that requirement by a health care service plan would be a crime, this bill would impose a state-mandated local program.
(2)The PPACA creates various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums in the individual market inside and outside of the Exchanges. Under the transitional reinsurance program, contributions are collected from contributing entities to fund reinsurance payments to issuers of nongrandfathered reinsurance-eligible individual market plans and the administrative costs of operating the reinsurance program for the 2014, 2015, and 2016 benefit years.
Existing law requires a health care service plan and health insurer to consider the claims experience of all enrollees and all insureds in all nongrandfathered individual health benefit plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the individual market and to consider the claims experience of all enrollees and all insureds in all nongrandfathered small group market plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the small market. Existing law requires a plan and health insurer to establish, each calendar year, an index rate for those markets in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool and requires the index rate to 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 under the federal provisions described above and the Exchange user fees. Existing law requires the premium rate for all of the individual health benefit plans and small employer health benefit plans within the single risk pool to use the applicable marketwide adjusted index rate, as specified.
This bill would delete the reference to the federal transitional reinsurance program in these provisions.
(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.
(1)Existing federal law, the Patient Protection and Affordable Care Act (PPACA), effective June 19, 2017, requires an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers to provide for the individual market an annual open enrollment period for policy years beginning on or after January 1, 2018, to begin on November 1 and extend through December 15 of the calendar year preceding the benefit year. Existing federal law establishes special enrollment periods during which a qualified individual may enroll in a qualified health plan when specified triggering events occur, such as when the qualified individual losses minimum essential coverage, as defined. Existing federal regulatory authority authorizes a state to establish additional special enrollment periods to supplement these special enrollment periods provided for under federal law under certain circumstances.
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 qualified small employers.
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 and health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans or health 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 offered both through and outside of the Exchange to specified open enrollment and special enrollment periods. Existing law requires a plan and health insurer to provide an annual enrollment period 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. Existing law requires a plan and health insurer, annually on or before October 1, to issue a notice to a subscriber and policyholder, as applicable, enrolled in any individual health benefit plan offered outside of the Exchange, and requires this notice to inform the subscriber and policyholder of, among other things, the applicable open enrollment period provided through the Exchange.
This bill would instead require, with respect to individual health benefit plans offered outside of the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive. The bill would instead require, with respect to individual health benefit plans offered through the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from November 1 to December 15 of the preceding calendar year, inclusive. The bill would require a health care service plan and a health insurer, with respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, to provide a special enrollment period that will allow individuals to enroll in individual health benefit plans through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive, and would require an application for a health benefit plan submitted during this special enrollment period to be treated the same as an application submitted during the annual open enrollment period. The bill would require a plan and health insurer to also include in the annual notice described above information regarding the applicable special enrollment periods. The bill would make conforming changes.
Because a willful violation of that requirement by a health care service plan would be a crime, this bill would impose a state-mandated local program.
(2)The PPACA creates various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums in the individual market inside and outside of the Exchanges. Under the transitional reinsurance program, contributions are collected from contributing entities to fund reinsurance payments to issuers of nongrandfathered reinsurance-eligible individual market plans and the administrative costs of operating the reinsurance program for the 2014, 2015, and 2016 benefit years.
Existing law requires a health care service plan and health insurer to consider the claims experience of all enrollees and all insureds in all nongrandfathered individual health benefit plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the individual market and to consider the claims experience of all enrollees and all insureds in all nongrandfathered small group market plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the small market. Existing law requires a plan and health insurer to establish, each calendar year, an index rate for those markets in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool and requires the index rate to 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 under the federal provisions described above and the Exchange user fees. Existing law requires the premium rate for all of the individual health benefit plans and small employer health benefit plans within the single risk pool to use the applicable marketwide adjusted index rate, as specified.
This bill would delete the reference to the federal transitional reinsurance program in these provisions.
(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.
(1)Existing federal law, the Patient Protection and Affordable Care Act (PPACA), effective June 19, 2017, requires an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers to provide for the individual market an annual open enrollment period for policy years beginning on or after January 1, 2018, to begin on November 1 and extend through December 15 of the calendar year preceding the benefit year. Existing federal law establishes special enrollment periods during which a qualified individual may enroll in a qualified health plan when specified triggering events occur, such as when the qualified individual losses minimum essential coverage, as defined. Existing federal regulatory authority authorizes a state to establish additional special enrollment periods to supplement these special enrollment periods provided for under federal law under certain circumstances.
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 qualified small employers.
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 and health insurer, on and after October 1, 2013, to offer, market, and sell all of the plans or health 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 offered both through and outside of the Exchange to specified open enrollment and special enrollment periods. Existing law requires a plan and health insurer to provide an annual enrollment period 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. Existing law requires a plan and health insurer, annually on or before October 1, to issue a notice to a subscriber and policyholder, as applicable, enrolled in any individual health benefit plan offered outside of the Exchange, and requires this notice to inform the subscriber and policyholder of, among other things, the applicable open enrollment period provided through the Exchange.
This bill would instead require, with respect to individual health benefit plans offered outside of the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive. The bill would instead require, with respect to individual health benefit plans offered through the Exchange, that the annual open enrollment period for policy years beginning on or after January 1, 2019, extend from November 1 to December 15 of the preceding calendar year, inclusive. The bill would require a health care service plan and a health insurer, with respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, to provide a special enrollment period that will allow individuals to enroll in individual health benefit plans through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive, and would require an application for a health benefit plan submitted during this special enrollment period to be treated the same as an application submitted during the annual open enrollment period. The bill would require a plan and health insurer to also include in the annual notice described above information regarding the applicable special enrollment periods. The bill would make conforming changes.
Because a willful violation of that requirement by a health care service plan would be a crime, this bill would impose a state-mandated local program.
Existing federal law, the federal Patient Protection and Affordable Care Act,(2)The PPACA creates various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums in the individual market inside and outside of the Exchanges. Under the transitional reinsurance program, contributions are collected from contributing entities to fund reinsurance payments to issuers of nongrandfathered reinsurance-eligible individual market plans and the administrative costs of operating the reinsurance program for the 2014, 2015, and 2016 benefit years.
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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health insurer, on and after October 1, 2013, to 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. ExistingExisting law requires an a health care service plan and health insurer to consider the claims experience of all enrollees and all insureds in all nongrandfathered individual health benefit plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the individual market and to consider the claims experience of all enrollees and all insureds in all nongrandfathered small group market plans offered by that plan or insurer in this state as a single risk pool for rating purposes in the small market. Existing law requires an a plan and health insurer to establish, each calendar year, an index rate for the individual market those markets in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool and requires the index rate to 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 under the federal provisions described above and the Exchange user fees. Existing law requires the premium rate for all of the individual health benefit plans in the individual market and small employer health benefit plans within the single risk pool to use the applicable marketwide adjusted index rate, as specified.
This bill would delete the reference to the federal transitional reinsurance program in these provisions.
(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.
Existing federal law, the federal Patient Protection and Affordable Care Act, creates various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums in the individual market inside and outside of the Exchanges. Under the transitional reinsurance program, contributions are collected from contributing entities to fund reinsurance payments to issuers of nongrandfathered reinsurance-eligible individual market plans and the administrative costs of operating the reinsurance program for the 2014, 2015, and 2016 benefit years.
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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health insurer, on and after October 1, 2013, to 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. Existing law requires an insurer to consider the claims experience of all enrollees and all insureds in all nongrandfathered individual health benefit plans offered by that insurer in this state as a single risk pool for rating purposes in the individual market. Existing law requires an insurer to establish, each calendar year, an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined, within the single risk pool and requires the index rate to 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 under the federal provisions described above and the Exchange user fees. Existing law requires the premium rate for all of the health benefit plans in the individual market within the single risk pool to use the applicable marketwide adjusted index rate, as specified.
This bill would delete the reference to the federal transitional reinsurance program in these provisions.
(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans small employer health care service plan contracts for plan years on or after January 1, 2014, to all small employers in each service area in which the plan provides or arranges for the provision of health care services.
(2)On and after October 1, 2013, a plan shall make available to each small employer all small employer health care service plan contracts that the plan offers and sells to small employers or to associations that include small employers in this state for plan years on or after January 1, 2014. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(3)A plan that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraphs (1) and (2) with respect to small employer health care service plan contracts offered through the Exchange in those geographic regions in which the plan offers plan contracts through the Exchange.
(b)A plan shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a plan shall provide special enrollment periods consistent with the special enrollment periods described in Section 1399.849, to the extent permitted by PPACA, except for both of the following:
(1)The special enrollment period described in paragraph (3) of subdivision (c) of Section 1399.849.
(2)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to plan contracts offered through the Exchange.
(c)No plan or solicitor shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health care service plan contract that is provided in connection with employees employment or membership in a guaranteed association.
(d)Every plan shall file with the director the reasonable employee participation requirements and employer contribution requirements that will be applied in offering its plan contracts. Participation requirements shall be applied uniformly among all small employer groups, except that a plan may vary application of minimum employee participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employees premium. Employer contribution requirements shall not vary by employer size. A health care service plan shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in Section 1357.500 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and (2) allows a plan to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer. Members of an association eligible for health coverage under subdivision (m) of Section 1357.500, but not electing any health coverage through the association, shall not be counted as eligible employees for purposes of determining whether the guaranteed association meets a plans reasonable participation standards.
(e)The plan shall not reject an application from a small employer for a small employer health care service plan contract if all of the following conditions are met:
(1)The small employer offers health benefits to 100 percent of its eligible employees. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(3)The small employer agrees to inform the small employers employees of the availability of coverage and the provision that those not electing coverage must wait until the next open enrollment or a special enrollment period to obtain coverage through the group if they later decide they would like to have coverage.
(4)The employees and their dependents who are to be covered by the plan contract work or reside in the service area in which the plan provides or otherwise arranges for the provision of health care services.
(f)No plan or solicitor shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(2)Encourage or direct small employers to seek coverage from another plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on an individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
(g)A plan shall not, directly or indirectly, enter into any contract, agreement, or arrangement with a solicitor that provides for or results in the compensation paid to a solicitor for the sale of a health care service plan contract to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer. This subdivision does not apply to a compensation arrangement that provides compensation to a solicitor on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(h)(1)A policy or contract that covers a small employer, as defined in Section 1304(b) of PPACA and in Section 1357.500, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the policy or contract based on any of the following health status-related 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 eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a small employer health care service plan contract. 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.
(i)(1)A health care service plan shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all enrollees in all nongrandfathered small employer health benefit plans offered by the health care service plan in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the health care service plan outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a health care service plan shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005, 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 program established for the state pursuant to Section 1343 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 nongrandfathered small employer health benefit plans 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 nongrandfathered small employer health care service plan contract from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the plan contract.
(B)The plan contracts provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the plan contract that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA. 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 plan contracts 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.
(j)A plan shall comply with the requirements of Section 1374.3.
(k)(1)Except as provided in paragraph (2), if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, this section shall become inoperative 12 months after the repeal date, in which case health care service plans subject to this section shall instead be governed by Section 1357.03 to the extent permitted by federal law, and all references in this article to this section shall instead refer to Section 1357.03 except for purposes of paragraph (2).
(2)Subdivision (b) shall remain operative with respect to health care service plan contracts offered through the Exchange.
SEC. 2.Section 1385.03 of the Health and Safety Code is amended to read:1385.03.(a)All health care service plans shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health care service plan contracts at least 120 days prior to implementing any rate change. All health care service plans shall file with the department all required rate information for nongrandfathered individual health care service plan contracts on the earlier of the following dates:
(1)One hundred days before October 15 of the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)A plan shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of plan contract forms covered by the filing.
(3)Plan contract form numbers covered by the filing.
(4)Product type, such as a preferred provider organization or health maintenance organization.
(5)Segment type.
(6)Type of plan involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each plan contract and rating form.
(9)Enrollee months in each plan contract form.
(10)Annual rate.
(11)Total earned premiums in each plan contract form.
(12)Total incurred claims in each plan contract form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of subscribers or enrollees affected by each plan contract form.
(18)The plans overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A plan may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 1357.512 and 1399.855. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual plan contract trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in enrollee cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in enrollee benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 1385.06.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)A health care service plan subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health plan markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of subscribers.
(E)Number of covered lives affected.
(2)The plans average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the plans last rate filing for the same category of health benefit plan. To the extent possible, the plan shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health care service plans to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A plan shall submit any other information required under PPACA. A plan shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A plan shall respond to the departments request for any additional information necessary for the department to complete its review of the plans rate filing for individual and small group health care service plan contracts under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a plans rate increase for individual and small group health care service plan contracts is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to makes its determination.
(3)For all nongrandfathered individual health care service plan contracts, the department shall issue a determination that the plans rate increase is unreasonable or not justified no later than 15 days before October 15 of the preceding policy year. If a health care service plan fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a plans rate increase is unreasonable or not justified.
(g)If the department determines that a plans rate increase for individual or small group health care service plan contracts is unreasonable or not justified consistent with this article, the health care service plan shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 1389.25. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (c) of Section 1374.21.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 1399.845.
SEC. 3.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)With respect to individual health benefit plans offered outside of the Exchange, 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, annual enrollment periods for policy years beginning on or after January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15, of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a plan shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a plan shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(4)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 paragraph (1) of 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 paragraph (1) of 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 of the preceding calendar year, coverage shall become effective on January 1 of the benefit year. 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 program established for the state pursuant to Section 1343 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. 4.Section 1399.859 of the Health and Safety Code is amended to read:1399.859.(a)A health care service plan that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 1399.849 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 1399.849.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health care service plan shall issue a notice to a subscriber enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the subscriber that he or she may be eligible for lower cost coverage through the Exchange and shall inform the subscriber of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 1399.849.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 5.Section 10181.3 of the Insurance Code is amended to read:10181.3.(a)All health insurers shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health insurance policies at least 120 days prior to implementing any rate change. All health insurers shall file with the department all required rate information for nongrandfathered individual health insurance policies on the earlier of the following dates:
(1)One hundred days before October 15 of the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)An insurer shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of policy forms covered by the filing.
(3)Policy form numbers covered by the filing.
(4)Product type, such as indemnity or preferred provider organization.
(5)Segment type.
(6)Type of insurer involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each policy and rating form.
(9)Insured months in each policy form.
(10)Annual rate.
(11)Total earned premiums in each policy form.
(12)Total incurred claims in each policy form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of policyholders or insureds affected by each policy form.
(18)The insurers overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. An insurer may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 10753.14 and 10965.9. For purposes of this paragraph, major geographic region shall be defined by the department and shall include no more than nine regions.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual policy trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in insured cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in insured benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 10181.6.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)An insurer subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health insurance markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of policyholders.
(E)Number of covered lives affected.
(2)The insurers average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the insurers last rate filing for the same category of health benefit plan. To the extent possible, the insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health insurers to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A health insurer shall submit any other information required under PPACA. A health insurer shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A health insurer shall respond to the departments request for any additional information necessary for the department to complete its review of the health insurers rate filing for individual and small group health insurance policies under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a health insurers rate increase for individual and small group insurance policies is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to make its determination.
(3)For all nongrandfathered individual health insurance policies, the department shall issue a determination that the health insurers rate increase is unreasonable or not justified no later than 15 days before October 15 of the preceding policy year. If a health insurer fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a health insurers rate increase is unreasonable or not justified.
(g)If the department determines that a health insurers rate increase for individual or small group health insurance policies is unreasonable or not justified consistent with this article, the health insurer shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 10113.9. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (d) of Section 10199.1.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 10965.
SEC. 6.Section 10753.05 of the Insurance Code is amended to read:10753.05.(a)No group or individual policy or contract or certificate of group insurance or statement of group coverage providing benefits to employees of small employers as defined in this chapter shall be issued or delivered by a carrier subject to the jurisdiction of the commissioner regardless of the situs of the contract or master policyholder or of the domicile of the carrier nor, except as otherwise provided in Sections 10270.91 and 10270.92, shall a carrier provide coverage subject to this chapter until a copy of the form of the policy, contract, certificate, or statement of coverage is filed with and approved by the commissioner in accordance with Sections 10290 and 10291, and the carrier has complied with the requirements of Section 10753.17.
(b)(1)On and after October 1, 2013, each carrier shall fairly and affirmatively offer, market, and sell all of the carriers health benefit plans that are sold to, offered through, or sponsored by, small employers or associations that include small employers for plan years on or after January 1, 2014, to all small employers in each geographic region in which the carrier makes coverage available or provides benefits.
(2)A carrier that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraph (1) with respect to health benefit plans offered through the Exchange in those geographic regions in which the carrier offers plans through the Exchange.
(3)A carrier shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a carrier shall provide special enrollment periods consistent with the special enrollment periods described in Section 10965.3, to the extent permitted by PPACA, except for both of the following:
(A)The special enrollment period described in paragraph (3) of subdivision (c) of Section 10965.3.
(B)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to health benefit plans offered through the Exchange.
(4)Nothing in this section shall be construed to require an association, or a trust established and maintained by an association to receive a master insurance policy issued by an admitted insurer and to administer the benefits thereof solely for association members, to offer, market, or sell a benefit plan design to those who are not members of the association. However, if the association markets, offers, or sells a benefit plan design to those who are not members of the association it is subject to the requirements of this section. This shall apply to an association that otherwise meets the requirements of paragraph (8) formed by merger of two or more associations after January 1, 1992, if the predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and met the requirements of paragraph (5).
(5)A carrier which (A) effective January 1, 1992, and at least 20 years prior to that date, markets, offers, or sells benefit plan designs only to all members of one association and (B) does not market, offer, or sell any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits shall not be required to market, offer, or sell to those who are not members of the association. However, if the carrier markets, offers, or sells any benefit plan design or any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits to those who are not members of the association it is subject to the requirements of this section.
(6)Each carrier that sells health benefit plans to members of one association pursuant to paragraph (5) shall submit an annual statement to the commissioner which states that the carrier is selling health benefit plans pursuant to paragraph (5) and which, for the one association, lists all the information required by paragraph (7).
(7)Each carrier that sells health benefit plans to members of any association shall submit an annual statement to the commissioner which lists each association to which the carrier sells health benefit plans, the industry or profession which is served by the association, the associations membership criteria, a list of officers, the state in which the association is organized, and the site of its principal office.
(8)For purposes of paragraphs (4) and (6), an association is 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 small employer meeting its membership criteria, which do not condition membership directly or indirectly on the health or claims history of any person, which 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, which is organized and maintained in good faith for purposes unrelated to insurance, which has been in active existence on January 1, 1992, and at least five years prior to that date, which has a constitution and bylaws, or other analogous governing documents which provide for election of the governing board of the association by its members, which has contracted with one or more carriers to offer one or more health benefit plans to all individual members and small employer members in this state. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(c)On and after October 1, 2013, each carrier shall make available to each small employer all health benefit plans that the carrier offers or sells to small employers or to associations that include small employers for plan years on or after January 1, 2014. Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(d)Each carrier shall do all of the following:
(1)Prepare a brochure that summarizes all of its health benefit plans and make this summary available to small employers, agents, and brokers upon request. The summary shall include for each plan information on benefits provided, a generic description of the manner in which services are provided, such as how access to providers is limited, benefit limitations, required copayments and deductibles, and a telephone number that can be called for more detailed benefit information. Carriers are required to keep the information contained in the brochure accurate and up to date, and, upon updating the brochure, send copies to agents and brokers representing the carrier. Any entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare a summary brochure which includes that benefit plan.
(2)For each health benefit plan, prepare a more detailed evidence of coverage and make it available to small employers, agents, and brokers upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making selections of benefit plan designs. An entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare an evidence of coverage for that health benefit plan.
(3)Provide copies of the current summary brochure to all agents or brokers who represent the carrier and, upon updating the brochure, send copies of the updated brochure to agents and brokers representing the carrier for the purpose of selling health benefit plans.
(4)Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(e)Every agent or broker representing one or more carriers for the purpose of selling health benefit plans to small employers shall do all of the following:
(1)When providing information on a health benefit plan to a small employer but making no specific recommendations on particular benefit plan designs:
(A)Advise the small employer of the carriers obligation to sell to any small employer any of the health benefit plans it offers to small employers, consistent with PPACA, and provide them, upon request, with the actual rates that would be charged to that employer for a given health benefit plan.
(B)Notify the small employer that the agent or broker will procure rate and benefit information for the small employer on any health benefit plan offered by a carrier for whom the agent or broker sells health benefit plans.
(C)Notify the small employer that, upon request, the agent or broker will provide the small employer with the summary brochure required in paragraph (1) of subdivision (d) for any benefit plan design offered by a carrier whom the agent or broker represents.
(D)Notify the small employer of the availability of coverage and the availability of tax credits for certain employers consistent with PPACA and state law, including any rules, regulations, or guidance issued in connection therewith.
(2)When recommending a particular benefit plan design or designs, advise the small employer that, upon request, the agent will provide the small employer with the brochure required by paragraph (1) of subdivision (d) containing the benefit plan design or designs being recommended by the agent or broker.
(3)Prior to filing an application for a small employer for a particular health benefit plan:
(A)For each of the health benefit plans offered by the carrier whose health benefit plan the agent or broker is presenting, provide the small employer with the benefit summary required in paragraph (1) of subdivision (d) and the premium for that particular employer.
(B)Notify the small employer that, upon request, the agent or broker will provide the small employer with an evidence of coverage brochure for each health benefit plan the carrier offers.
(C)Obtain a signed statement from the small employer acknowledging that the small employer has received the disclosures required by this paragraph and Section 10753.16.
(f)No carrier, agent, or broker shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health benefit plan which, in the case of an eligible employee meeting the definition in paragraph (1) of subdivision (f) of Section 10753, is provided in connection with the employees employment or which, in the case of an eligible employee as defined in paragraph (2) of subdivision (f) of Section 10753, is provided in connection with a guaranteed association.
(g)No carrier shall reject an application from a small employer for a health benefit plan provided:
(1)The small employer as defined by subparagraph (A) of paragraph (1) of subdivision (q) of Section 10753 offers health benefits to 100 percent of its eligible employees as defined in paragraph (1) of subdivision (f) of Section 10753. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(h)No carrier or agent or broker shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(2)Encourage or direct small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on the individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
This subdivision shall be enforced in the same manner as Section 790.03, including through Sections 790.035 and 790.05.
(i)No carrier shall, directly or indirectly, enter into any contract, agreement, or arrangement with an agent or broker that provides for or results in the compensation paid to an agent or broker for a health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer or the small employers employees. This subdivision shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(j)(1)A health benefit plan offered to a small employer, as defined in Section 1304(b) of PPACA and in Section 10753, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related 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 10291.5, a carrier shall not require an eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a health benefit plan. A carrier 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.
(k)(1)A carrier shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all insureds in all nongrandfathered small employer health benefit plans offered by the carrier in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the carrier outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a carrier shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27, 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 program established for the state pursuant to Section 1343 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 nongrandfathered health benefit plans 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 carrier may vary premium rates for a particular nongrandfathered 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. 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 health benefit plans that offer those benefits in addition to essential health benefits.
(D)Administrative costs, excluding any user fees required by the Exchange.
(E)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.
(l)If a carrier enters into a contract, agreement, or other arrangement with a third-party administrator or other entity to provide administrative, marketing, or other services related to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this chapter.
(m)(1)Except as provided in paragraph (2), this section shall become inoperative if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, in which case, 12 months after the repeal, carriers subject to this section shall instead be governed by Section 10705 to the extent permitted by federal law, and all references in this chapter to this section shall instead refer to Section 10705, except for purposes of paragraph (2).
(2)Paragraph (3) of subdivision (b) of this section shall remain operative as it relates to health benefit plans offered through the Exchange.
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)With respect to individual health benefit plans offered outside of the Exchange, 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, annual enrollment periods for policy years beginning on or after January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a health insurer shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a health insurer shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(4)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 paragraph (1) of 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 paragraph (1) of 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 of the preceding calendar year, coverage shall become effective on January 1 of the benefit year. 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 program established for the state pursuant to Section 1343 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.Section 10965.13 of the Insurance Code is amended to read:10965.13.(a)A health insurer that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 10965.3 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 10965.3.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health insurer shall issue a notice to a policyholder enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the policyholder that he or she may be eligible for lower cost coverage through the Exchange and shall inform the policyholder of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 10965.3.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans small employer health care service plan contracts for plan years on or after January 1, 2014, to all small employers in each service area in which the plan provides or arranges for the provision of health care services.
(2)On and after October 1, 2013, a plan shall make available to each small employer all small employer health care service plan contracts that the plan offers and sells to small employers or to associations that include small employers in this state for plan years on or after January 1, 2014. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(3)A plan that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraphs (1) and (2) with respect to small employer health care service plan contracts offered through the Exchange in those geographic regions in which the plan offers plan contracts through the Exchange.
(b)A plan shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a plan shall provide special enrollment periods consistent with the special enrollment periods described in Section 1399.849, to the extent permitted by PPACA, except for both of the following:
(1)The special enrollment period described in paragraph (3) of subdivision (c) of Section 1399.849.
(2)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to plan contracts offered through the Exchange.
(c)No plan or solicitor shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health care service plan contract that is provided in connection with employees employment or membership in a guaranteed association.
(d)Every plan shall file with the director the reasonable employee participation requirements and employer contribution requirements that will be applied in offering its plan contracts. Participation requirements shall be applied uniformly among all small employer groups, except that a plan may vary application of minimum employee participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employees premium. Employer contribution requirements shall not vary by employer size. A health care service plan shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in Section 1357.500 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and (2) allows a plan to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer. Members of an association eligible for health coverage under subdivision (m) of Section 1357.500, but not electing any health coverage through the association, shall not be counted as eligible employees for purposes of determining whether the guaranteed association meets a plans reasonable participation standards.
(e)The plan shall not reject an application from a small employer for a small employer health care service plan contract if all of the following conditions are met:
(1)The small employer offers health benefits to 100 percent of its eligible employees. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(3)The small employer agrees to inform the small employers employees of the availability of coverage and the provision that those not electing coverage must wait until the next open enrollment or a special enrollment period to obtain coverage through the group if they later decide they would like to have coverage.
(4)The employees and their dependents who are to be covered by the plan contract work or reside in the service area in which the plan provides or otherwise arranges for the provision of health care services.
(f)No plan or solicitor shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(2)Encourage or direct small employers to seek coverage from another plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on an individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
(g)A plan shall not, directly or indirectly, enter into any contract, agreement, or arrangement with a solicitor that provides for or results in the compensation paid to a solicitor for the sale of a health care service plan contract to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer. This subdivision does not apply to a compensation arrangement that provides compensation to a solicitor on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(h)(1)A policy or contract that covers a small employer, as defined in Section 1304(b) of PPACA and in Section 1357.500, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the policy or contract based on any of the following health status-related 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 eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a small employer health care service plan contract. 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.
(i)(1)A health care service plan shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all enrollees in all nongrandfathered small employer health benefit plans offered by the health care service plan in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the health care service plan outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a health care service plan shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005, 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 program established for the state pursuant to Section 1343 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 nongrandfathered small employer health benefit plans 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 nongrandfathered small employer health care service plan contract from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the plan contract.
(B)The plan contracts provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the plan contract that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA. 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 plan contracts 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.
(j)A plan shall comply with the requirements of Section 1374.3.
(k)(1)Except as provided in paragraph (2), if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, this section shall become inoperative 12 months after the repeal date, in which case health care service plans subject to this section shall instead be governed by Section 1357.03 to the extent permitted by federal law, and all references in this article to this section shall instead refer to Section 1357.03 except for purposes of paragraph (2).
(2)Subdivision (b) shall remain operative with respect to health care service plan contracts offered through the Exchange.
SEC. 2.Section 1385.03 of the Health and Safety Code is amended to read:1385.03.(a)All health care service plans shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health care service plan contracts at least 120 days prior to implementing any rate change. All health care service plans shall file with the department all required rate information for nongrandfathered individual health care service plan contracts on the earlier of the following dates:
(1)One hundred days before October 15 of the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)A plan shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of plan contract forms covered by the filing.
(3)Plan contract form numbers covered by the filing.
(4)Product type, such as a preferred provider organization or health maintenance organization.
(5)Segment type.
(6)Type of plan involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each plan contract and rating form.
(9)Enrollee months in each plan contract form.
(10)Annual rate.
(11)Total earned premiums in each plan contract form.
(12)Total incurred claims in each plan contract form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of subscribers or enrollees affected by each plan contract form.
(18)The plans overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A plan may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 1357.512 and 1399.855. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual plan contract trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in enrollee cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in enrollee benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 1385.06.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)A health care service plan subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health plan markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of subscribers.
(E)Number of covered lives affected.
(2)The plans average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the plans last rate filing for the same category of health benefit plan. To the extent possible, the plan shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health care service plans to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A plan shall submit any other information required under PPACA. A plan shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A plan shall respond to the departments request for any additional information necessary for the department to complete its review of the plans rate filing for individual and small group health care service plan contracts under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a plans rate increase for individual and small group health care service plan contracts is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to makes its determination.
(3)For all nongrandfathered individual health care service plan contracts, the department shall issue a determination that the plans rate increase is unreasonable or not justified no later than 15 days before October 15 of the preceding policy year. If a health care service plan fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a plans rate increase is unreasonable or not justified.
(g)If the department determines that a plans rate increase for individual or small group health care service plan contracts is unreasonable or not justified consistent with this article, the health care service plan shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 1389.25. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (c) of Section 1374.21.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 1399.845.
SEC. 3.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)With respect to individual health benefit plans offered outside of the Exchange, 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, annual enrollment periods for policy years beginning on or after January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15, of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a plan shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a plan shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(4)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 paragraph (1) of 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 paragraph (1) of 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 of the preceding calendar year, coverage shall become effective on January 1 of the benefit year. 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 program established for the state pursuant to Section 1343 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. 4.Section 1399.859 of the Health and Safety Code is amended to read:1399.859.(a)A health care service plan that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 1399.849 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 1399.849.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health care service plan shall issue a notice to a subscriber enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the subscriber that he or she may be eligible for lower cost coverage through the Exchange and shall inform the subscriber of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 1399.849.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 5.Section 10181.3 of the Insurance Code is amended to read:10181.3.(a)All health insurers shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health insurance policies at least 120 days prior to implementing any rate change. All health insurers shall file with the department all required rate information for nongrandfathered individual health insurance policies on the earlier of the following dates:
(1)One hundred days before October 15 of the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)An insurer shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of policy forms covered by the filing.
(3)Policy form numbers covered by the filing.
(4)Product type, such as indemnity or preferred provider organization.
(5)Segment type.
(6)Type of insurer involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each policy and rating form.
(9)Insured months in each policy form.
(10)Annual rate.
(11)Total earned premiums in each policy form.
(12)Total incurred claims in each policy form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of policyholders or insureds affected by each policy form.
(18)The insurers overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. An insurer may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 10753.14 and 10965.9. For purposes of this paragraph, major geographic region shall be defined by the department and shall include no more than nine regions.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual policy trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in insured cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in insured benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 10181.6.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)An insurer subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health insurance markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of policyholders.
(E)Number of covered lives affected.
(2)The insurers average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the insurers last rate filing for the same category of health benefit plan. To the extent possible, the insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health insurers to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A health insurer shall submit any other information required under PPACA. A health insurer shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A health insurer shall respond to the departments request for any additional information necessary for the department to complete its review of the health insurers rate filing for individual and small group health insurance policies under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a health insurers rate increase for individual and small group insurance policies is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to make its determination.
(3)For all nongrandfathered individual health insurance policies, the department shall issue a determination that the health insurers rate increase is unreasonable or not justified no later than 15 days before October 15 of the preceding policy year. If a health insurer fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a health insurers rate increase is unreasonable or not justified.
(g)If the department determines that a health insurers rate increase for individual or small group health insurance policies is unreasonable or not justified consistent with this article, the health insurer shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 10113.9. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (d) of Section 10199.1.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 10965.
SEC. 6.Section 10753.05 of the Insurance Code is amended to read:10753.05.(a)No group or individual policy or contract or certificate of group insurance or statement of group coverage providing benefits to employees of small employers as defined in this chapter shall be issued or delivered by a carrier subject to the jurisdiction of the commissioner regardless of the situs of the contract or master policyholder or of the domicile of the carrier nor, except as otherwise provided in Sections 10270.91 and 10270.92, shall a carrier provide coverage subject to this chapter until a copy of the form of the policy, contract, certificate, or statement of coverage is filed with and approved by the commissioner in accordance with Sections 10290 and 10291, and the carrier has complied with the requirements of Section 10753.17.
(b)(1)On and after October 1, 2013, each carrier shall fairly and affirmatively offer, market, and sell all of the carriers health benefit plans that are sold to, offered through, or sponsored by, small employers or associations that include small employers for plan years on or after January 1, 2014, to all small employers in each geographic region in which the carrier makes coverage available or provides benefits.
(2)A carrier that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraph (1) with respect to health benefit plans offered through the Exchange in those geographic regions in which the carrier offers plans through the Exchange.
(3)A carrier shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a carrier shall provide special enrollment periods consistent with the special enrollment periods described in Section 10965.3, to the extent permitted by PPACA, except for both of the following:
(A)The special enrollment period described in paragraph (3) of subdivision (c) of Section 10965.3.
(B)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to health benefit plans offered through the Exchange.
(4)Nothing in this section shall be construed to require an association, or a trust established and maintained by an association to receive a master insurance policy issued by an admitted insurer and to administer the benefits thereof solely for association members, to offer, market, or sell a benefit plan design to those who are not members of the association. However, if the association markets, offers, or sells a benefit plan design to those who are not members of the association it is subject to the requirements of this section. This shall apply to an association that otherwise meets the requirements of paragraph (8) formed by merger of two or more associations after January 1, 1992, if the predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and met the requirements of paragraph (5).
(5)A carrier which (A) effective January 1, 1992, and at least 20 years prior to that date, markets, offers, or sells benefit plan designs only to all members of one association and (B) does not market, offer, or sell any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits shall not be required to market, offer, or sell to those who are not members of the association. However, if the carrier markets, offers, or sells any benefit plan design or any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits to those who are not members of the association it is subject to the requirements of this section.
(6)Each carrier that sells health benefit plans to members of one association pursuant to paragraph (5) shall submit an annual statement to the commissioner which states that the carrier is selling health benefit plans pursuant to paragraph (5) and which, for the one association, lists all the information required by paragraph (7).
(7)Each carrier that sells health benefit plans to members of any association shall submit an annual statement to the commissioner which lists each association to which the carrier sells health benefit plans, the industry or profession which is served by the association, the associations membership criteria, a list of officers, the state in which the association is organized, and the site of its principal office.
(8)For purposes of paragraphs (4) and (6), an association is 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 small employer meeting its membership criteria, which do not condition membership directly or indirectly on the health or claims history of any person, which 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, which is organized and maintained in good faith for purposes unrelated to insurance, which has been in active existence on January 1, 1992, and at least five years prior to that date, which has a constitution and bylaws, or other analogous governing documents which provide for election of the governing board of the association by its members, which has contracted with one or more carriers to offer one or more health benefit plans to all individual members and small employer members in this state. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(c)On and after October 1, 2013, each carrier shall make available to each small employer all health benefit plans that the carrier offers or sells to small employers or to associations that include small employers for plan years on or after January 1, 2014. Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(d)Each carrier shall do all of the following:
(1)Prepare a brochure that summarizes all of its health benefit plans and make this summary available to small employers, agents, and brokers upon request. The summary shall include for each plan information on benefits provided, a generic description of the manner in which services are provided, such as how access to providers is limited, benefit limitations, required copayments and deductibles, and a telephone number that can be called for more detailed benefit information. Carriers are required to keep the information contained in the brochure accurate and up to date, and, upon updating the brochure, send copies to agents and brokers representing the carrier. Any entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare a summary brochure which includes that benefit plan.
(2)For each health benefit plan, prepare a more detailed evidence of coverage and make it available to small employers, agents, and brokers upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making selections of benefit plan designs. An entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare an evidence of coverage for that health benefit plan.
(3)Provide copies of the current summary brochure to all agents or brokers who represent the carrier and, upon updating the brochure, send copies of the updated brochure to agents and brokers representing the carrier for the purpose of selling health benefit plans.
(4)Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(e)Every agent or broker representing one or more carriers for the purpose of selling health benefit plans to small employers shall do all of the following:
(1)When providing information on a health benefit plan to a small employer but making no specific recommendations on particular benefit plan designs:
(A)Advise the small employer of the carriers obligation to sell to any small employer any of the health benefit plans it offers to small employers, consistent with PPACA, and provide them, upon request, with the actual rates that would be charged to that employer for a given health benefit plan.
(B)Notify the small employer that the agent or broker will procure rate and benefit information for the small employer on any health benefit plan offered by a carrier for whom the agent or broker sells health benefit plans.
(C)Notify the small employer that, upon request, the agent or broker will provide the small employer with the summary brochure required in paragraph (1) of subdivision (d) for any benefit plan design offered by a carrier whom the agent or broker represents.
(D)Notify the small employer of the availability of coverage and the availability of tax credits for certain employers consistent with PPACA and state law, including any rules, regulations, or guidance issued in connection therewith.
(2)When recommending a particular benefit plan design or designs, advise the small employer that, upon request, the agent will provide the small employer with the brochure required by paragraph (1) of subdivision (d) containing the benefit plan design or designs being recommended by the agent or broker.
(3)Prior to filing an application for a small employer for a particular health benefit plan:
(A)For each of the health benefit plans offered by the carrier whose health benefit plan the agent or broker is presenting, provide the small employer with the benefit summary required in paragraph (1) of subdivision (d) and the premium for that particular employer.
(B)Notify the small employer that, upon request, the agent or broker will provide the small employer with an evidence of coverage brochure for each health benefit plan the carrier offers.
(C)Obtain a signed statement from the small employer acknowledging that the small employer has received the disclosures required by this paragraph and Section 10753.16.
(f)No carrier, agent, or broker shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health benefit plan which, in the case of an eligible employee meeting the definition in paragraph (1) of subdivision (f) of Section 10753, is provided in connection with the employees employment or which, in the case of an eligible employee as defined in paragraph (2) of subdivision (f) of Section 10753, is provided in connection with a guaranteed association.
(g)No carrier shall reject an application from a small employer for a health benefit plan provided:
(1)The small employer as defined by subparagraph (A) of paragraph (1) of subdivision (q) of Section 10753 offers health benefits to 100 percent of its eligible employees as defined in paragraph (1) of subdivision (f) of Section 10753. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(h)No carrier or agent or broker shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(2)Encourage or direct small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on the individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
This subdivision shall be enforced in the same manner as Section 790.03, including through Sections 790.035 and 790.05.
(i)No carrier shall, directly or indirectly, enter into any contract, agreement, or arrangement with an agent or broker that provides for or results in the compensation paid to an agent or broker for a health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer or the small employers employees. This subdivision shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(j)(1)A health benefit plan offered to a small employer, as defined in Section 1304(b) of PPACA and in Section 10753, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related 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 10291.5, a carrier shall not require an eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a health benefit plan. A carrier 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.
(k)(1)A carrier shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all insureds in all nongrandfathered small employer health benefit plans offered by the carrier in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the carrier outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a carrier shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27, 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 program established for the state pursuant to Section 1343 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 nongrandfathered health benefit plans 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 carrier may vary premium rates for a particular nongrandfathered 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. 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 health benefit plans that offer those benefits in addition to essential health benefits.
(D)Administrative costs, excluding any user fees required by the Exchange.
(E)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.
(l)If a carrier enters into a contract, agreement, or other arrangement with a third-party administrator or other entity to provide administrative, marketing, or other services related to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this chapter.
(m)(1)Except as provided in paragraph (2), this section shall become inoperative if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, in which case, 12 months after the repeal, carriers subject to this section shall instead be governed by Section 10705 to the extent permitted by federal law, and all references in this chapter to this section shall instead refer to Section 10705, except for purposes of paragraph (2).
(2)Paragraph (3) of subdivision (b) of this section shall remain operative as it relates to health benefit plans offered through the Exchange.
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)With respect to individual health benefit plans offered outside of the Exchange, 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, annual enrollment periods for policy years beginning on or after January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a health insurer shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a health insurer shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(4)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 paragraph (1) of 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 paragraph (1) of 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 of the preceding calendar year, coverage shall become effective on January 1 of the benefit year. 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 program established for the state pursuant to Section 1343 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.Section 10965.13 of the Insurance Code is amended to read:10965.13.(a)A health insurer that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 10965.3 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 10965.3.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health insurer shall issue a notice to a policyholder enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the policyholder that he or she may be eligible for lower cost coverage through the Exchange and shall inform the policyholder of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 10965.3.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans small employer health care service plan contracts for plan years on or after January 1, 2014, to all small employers in each service area in which the plan provides or arranges for the provision of health care services.
(2)On and after October 1, 2013, a plan shall make available to each small employer all small employer health care service plan contracts that the plan offers and sells to small employers or to associations that include small employers in this state for plan years on or after January 1, 2014. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(3)A plan that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraphs (1) and (2) with respect to small employer health care service plan contracts offered through the Exchange in those geographic regions in which the plan offers plan contracts through the Exchange.
(b)A plan shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a plan shall provide special enrollment periods consistent with the special enrollment periods described in Section 1399.849, to the extent permitted by PPACA, except for both of the following:
(1)The special enrollment period described in paragraph (3) of subdivision (c) of Section 1399.849.
(2)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to plan contracts offered through the Exchange.
(c)No plan or solicitor shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health care service plan contract that is provided in connection with employees employment or membership in a guaranteed association.
(d)Every plan shall file with the director the reasonable employee participation requirements and employer contribution requirements that will be applied in offering its plan contracts. Participation requirements shall be applied uniformly among all small employer groups, except that a plan may vary application of minimum employee participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employees premium. Employer contribution requirements shall not vary by employer size. A health care service plan shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in Section 1357.500 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and (2) allows a plan to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer. Members of an association eligible for health coverage under subdivision (m) of Section 1357.500, but not electing any health coverage through the association, shall not be counted as eligible employees for purposes of determining whether the guaranteed association meets a plans reasonable participation standards.
(e)The plan shall not reject an application from a small employer for a small employer health care service plan contract if all of the following conditions are met:
(1)The small employer offers health benefits to 100 percent of its eligible employees. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(3)The small employer agrees to inform the small employers employees of the availability of coverage and the provision that those not electing coverage must wait until the next open enrollment or a special enrollment period to obtain coverage through the group if they later decide they would like to have coverage.
(4)The employees and their dependents who are to be covered by the plan contract work or reside in the service area in which the plan provides or otherwise arranges for the provision of health care services.
(f)No plan or solicitor shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(2)Encourage or direct small employers to seek coverage from another plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on an individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
(g)A plan shall not, directly or indirectly, enter into any contract, agreement, or arrangement with a solicitor that provides for or results in the compensation paid to a solicitor for the sale of a health care service plan contract to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer. This subdivision does not apply to a compensation arrangement that provides compensation to a solicitor on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(h)(1)A policy or contract that covers a small employer, as defined in Section 1304(b) of PPACA and in Section 1357.500, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the policy or contract based on any of the following health status-related 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 eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a small employer health care service plan contract. 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.
(i)(1)A health care service plan shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all enrollees in all nongrandfathered small employer health benefit plans offered by the health care service plan in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the health care service plan outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a health care service plan shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005, 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 program established for the state pursuant to Section 1343 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 nongrandfathered small employer health benefit plans 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 nongrandfathered small employer health care service plan contract from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the plan contract.
(B)The plan contracts provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the plan contract that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA. 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 plan contracts 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.
(j)A plan shall comply with the requirements of Section 1374.3.
(k)(1)Except as provided in paragraph (2), if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, this section shall become inoperative 12 months after the repeal date, in which case health care service plans subject to this section shall instead be governed by Section 1357.03 to the extent permitted by federal law, and all references in this article to this section shall instead refer to Section 1357.03 except for purposes of paragraph (2).
(2)Subdivision (b) shall remain operative with respect to health care service plan contracts offered through the Exchange.
SEC. 2.Section 1385.03 of the Health and Safety Code is amended to read:1385.03.(a)All health care service plans shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health care service plan contracts at least 120 days prior to implementing any rate change. All health care service plans shall file with the department all required rate information for nongrandfathered individual health care service plan contracts on the earlier of the following dates:
(1)One hundred days before the first day of the open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849, for October 15 of the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)A plan shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of plan contract forms covered by the filing.
(3)Plan contract form numbers covered by the filing.
(4)Product type, such as a preferred provider organization or health maintenance organization.
(5)Segment type.
(6)Type of plan involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each plan contract and rating form.
(9)Enrollee months in each plan contract form.
(10)Annual rate.
(11)Total earned premiums in each plan contract form.
(12)Total incurred claims in each plan contract form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of subscribers or enrollees affected by each plan contract form.
(18)The plans overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A plan may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 1357.512 and 1399.855. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual plan contract trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in enrollee cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in enrollee benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 1385.06.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)A health care service plan subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health plan markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of subscribers.
(E)Number of covered lives affected.
(2)The plans average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the plans last rate filing for the same category of health benefit plan. To the extent possible, the plan shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health care service plans to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A plan shall submit any other information required under PPACA. A plan shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A plan shall respond to the departments request for any additional information necessary for the department to complete its review of the plans rate filing for individual and small group health care service plan contracts under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a plans rate increase for individual and small group health care service plan contracts is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to makes its determination.
(3)For all nongrandfathered individual health care service plan contracts, the department shall issue a determination that the plans rate increase is unreasonable or not justified no later than 15 days before the first day of the open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849, for October 15 of the preceding policy year. If a health care service plan fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a plans rate increase is unreasonable or not justified.
(g)If the department determines that a plans rate increase for individual or small group health care service plan contracts is unreasonable or not justified consistent with this article, the health care service plan shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 1389.25. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (c) of Section 1374.21.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 1399.845.
SEC. 3.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)With respect to individual health benefit plans offered outside of the Exchange, 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, annual enrollment periods for policy years beginning on or after January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15, of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a plan shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a plan shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(4)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 paragraph (1) of 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 paragraph (1) of 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 of the preceding calendar year, coverage shall become effective on January 1 of the benefit year. 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 program established for the state pursuant to Section 1343 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. 4.Section 1399.859 of the Health and Safety Code is amended to read:1399.859.(a)A health care service plan that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 1399.849 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 1399.849.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health care service plan shall issue a notice to a subscriber enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the subscriber that he or she may be eligible for lower cost coverage through the Exchange and shall inform the subscriber of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 1399.849.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 5.Section 10181.3 of the Insurance Code is amended to read:10181.3.(a)All health insurers shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health insurance policies at least 120 days prior to implementing any rate change. All health insurers shall file with the department all required rate information for nongrandfathered individual health insurance policies on the earlier of the following dates:
(1)One hundred days before the first day of the open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 10965.3, for October 15 of the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)An insurer shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of policy forms covered by the filing.
(3)Policy form numbers covered by the filing.
(4)Product type, such as indemnity or preferred provider organization.
(5)Segment type.
(6)Type of insurer involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each policy and rating form.
(9)Insured months in each policy form.
(10)Annual rate.
(11)Total earned premiums in each policy form.
(12)Total incurred claims in each policy form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of policyholders or insureds affected by each policy form.
(18)The insurers overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. An insurer may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 10753.14 and 10965.9. For purposes of this paragraph, major geographic region shall be defined by the department and shall include no more than nine regions.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual policy trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in insured cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in insured benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 10181.6.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)An insurer subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health insurance markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of policyholders.
(E)Number of covered lives affected.
(2)The insurers average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the insurers last rate filing for the same category of health benefit plan. To the extent possible, the insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health insurers to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A health insurer shall submit any other information required under PPACA. A health insurer shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A health insurer shall respond to the departments request for any additional information necessary for the department to complete its review of the health insurers rate filing for individual and small group health insurance policies under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a health insurers rate increase for individual and small group insurance policies is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to make its determination.
(3)For all nongrandfathered individual health insurance policies, the department shall issue a determination that the health insurers rate increase is unreasonable or not justified no later than 15 days before the first day of the open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 10965.3, for October 15 of the preceding policy year. If a health insurer fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a health insurers rate increase is unreasonable or not justified.
(g)If the department determines that a health insurers rate increase for individual or small group health insurance policies is unreasonable or not justified consistent with this article, the health insurer shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 10113.9. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (d) of Section 10199.1.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 10965.
SEC. 6.Section 10753.05 of the Insurance Code is amended to read:10753.05.(a)No group or individual policy or contract or certificate of group insurance or statement of group coverage providing benefits to employees of small employers as defined in this chapter shall be issued or delivered by a carrier subject to the jurisdiction of the commissioner regardless of the situs of the contract or master policyholder or of the domicile of the carrier nor, except as otherwise provided in Sections 10270.91 and 10270.92, shall a carrier provide coverage subject to this chapter until a copy of the form of the policy, contract, certificate, or statement of coverage is filed with and approved by the commissioner in accordance with Sections 10290 and 10291, and the carrier has complied with the requirements of Section 10753.17.
(b)(1)On and after October 1, 2013, each carrier shall fairly and affirmatively offer, market, and sell all of the carriers health benefit plans that are sold to, offered through, or sponsored by, small employers or associations that include small employers for plan years on or after January 1, 2014, to all small employers in each geographic region in which the carrier makes coverage available or provides benefits.
(2)A carrier that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraph (1) with respect to health benefit plans offered through the Exchange in those geographic regions in which the carrier offers plans through the Exchange.
(3)A carrier shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a carrier shall provide special enrollment periods consistent with the special enrollment periods described in Section 10965.3, to the extent permitted by PPACA, except for both of the following:
(A)The special enrollment period described in paragraph (3) of subdivision (c) of Section 10965.3.
(B)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to health benefit plans offered through the Exchange.
(4)Nothing in this section shall be construed to require an association, or a trust established and maintained by an association to receive a master insurance policy issued by an admitted insurer and to administer the benefits thereof solely for association members, to offer, market, or sell a benefit plan design to those who are not members of the association. However, if the association markets, offers, or sells a benefit plan design to those who are not members of the association it is subject to the requirements of this section. This shall apply to an association that otherwise meets the requirements of paragraph (8) formed by merger of two or more associations after January 1, 1992, if the predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and met the requirements of paragraph (5).
(5)A carrier which (A) effective January 1, 1992, and at least 20 years prior to that date, markets, offers, or sells benefit plan designs only to all members of one association and (B) does not market, offer, or sell any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits shall not be required to market, offer, or sell to those who are not members of the association. However, if the carrier markets, offers, or sells any benefit plan design or any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits to those who are not members of the association it is subject to the requirements of this section.
(6)Each carrier that sells health benefit plans to members of one association pursuant to paragraph (5) shall submit an annual statement to the commissioner which states that the carrier is selling health benefit plans pursuant to paragraph (5) and which, for the one association, lists all the information required by paragraph (7).
(7)Each carrier that sells health benefit plans to members of any association shall submit an annual statement to the commissioner which lists each association to which the carrier sells health benefit plans, the industry or profession which is served by the association, the associations membership criteria, a list of officers, the state in which the association is organized, and the site of its principal office.
(8)For purposes of paragraphs (4) and (6), an association is 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 small employer meeting its membership criteria, which do not condition membership directly or indirectly on the health or claims history of any person, which 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, which is organized and maintained in good faith for purposes unrelated to insurance, which has been in active existence on January 1, 1992, and at least five years prior to that date, which has a constitution and bylaws, or other analogous governing documents which provide for election of the governing board of the association by its members, which has contracted with one or more carriers to offer one or more health benefit plans to all individual members and small employer members in this state. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(c)On and after October 1, 2013, each carrier shall make available to each small employer all health benefit plans that the carrier offers or sells to small employers or to associations that include small employers for plan years on or after January 1, 2014. Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(d)Each carrier shall do all of the following:
(1)Prepare a brochure that summarizes all of its health benefit plans and make this summary available to small employers, agents, and brokers upon request. The summary shall include for each plan information on benefits provided, a generic description of the manner in which services are provided, such as how access to providers is limited, benefit limitations, required copayments and deductibles, and a telephone number that can be called for more detailed benefit information. Carriers are required to keep the information contained in the brochure accurate and up to date, and, upon updating the brochure, send copies to agents and brokers representing the carrier. Any entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare a summary brochure which includes that benefit plan.
(2)For each health benefit plan, prepare a more detailed evidence of coverage and make it available to small employers, agents, and brokers upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making selections of benefit plan designs. An entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare an evidence of coverage for that health benefit plan.
(3)Provide copies of the current summary brochure to all agents or brokers who represent the carrier and, upon updating the brochure, send copies of the updated brochure to agents and brokers representing the carrier for the purpose of selling health benefit plans.
(4)Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(e)Every agent or broker representing one or more carriers for the purpose of selling health benefit plans to small employers shall do all of the following:
(1)When providing information on a health benefit plan to a small employer but making no specific recommendations on particular benefit plan designs:
(A)Advise the small employer of the carriers obligation to sell to any small employer any of the health benefit plans it offers to small employers, consistent with PPACA, and provide them, upon request, with the actual rates that would be charged to that employer for a given health benefit plan.
(B)Notify the small employer that the agent or broker will procure rate and benefit information for the small employer on any health benefit plan offered by a carrier for whom the agent or broker sells health benefit plans.
(C)Notify the small employer that, upon request, the agent or broker will provide the small employer with the summary brochure required in paragraph (1) of subdivision (d) for any benefit plan design offered by a carrier whom the agent or broker represents.
(D)Notify the small employer of the availability of coverage and the availability of tax credits for certain employers consistent with PPACA and state law, including any rules, regulations, or guidance issued in connection therewith.
(2)When recommending a particular benefit plan design or designs, advise the small employer that, upon request, the agent will provide the small employer with the brochure required by paragraph (1) of subdivision (d) containing the benefit plan design or designs being recommended by the agent or broker.
(3)Prior to filing an application for a small employer for a particular health benefit plan:
(A)For each of the health benefit plans offered by the carrier whose health benefit plan the agent or broker is presenting, provide the small employer with the benefit summary required in paragraph (1) of subdivision (d) and the premium for that particular employer.
(B)Notify the small employer that, upon request, the agent or broker will provide the small employer with an evidence of coverage brochure for each health benefit plan the carrier offers.
(C)Obtain a signed statement from the small employer acknowledging that the small employer has received the disclosures required by this paragraph and Section 10753.16.
(f)No carrier, agent, or broker shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health benefit plan which, in the case of an eligible employee meeting the definition in paragraph (1) of subdivision (f) of Section 10753, is provided in connection with the employees employment or which, in the case of an eligible employee as defined in paragraph (2) of subdivision (f) of Section 10753, is provided in connection with a guaranteed association.
(g)No carrier shall reject an application from a small employer for a health benefit plan provided:
(1)The small employer as defined by subparagraph (A) of paragraph (1) of subdivision (q) of Section 10753 offers health benefits to 100 percent of its eligible employees as defined in paragraph (1) of subdivision (f) of Section 10753. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(h)No carrier or agent or broker shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(2)Encourage or direct small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on the individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
This subdivision shall be enforced in the same manner as Section 790.03, including through Sections 790.035 and 790.05.
(i)No carrier shall, directly or indirectly, enter into any contract, agreement, or arrangement with an agent or broker that provides for or results in the compensation paid to an agent or broker for a health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer or the small employers employees. This subdivision shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(j)(1)A health benefit plan offered to a small employer, as defined in Section 1304(b) of PPACA and in Section 10753, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related 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 10291.5, a carrier shall not require an eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a health benefit plan. A carrier 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.
(k)(1)A carrier shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all insureds in all nongrandfathered small employer health benefit plans offered by the carrier in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the carrier outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a carrier shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27, 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 program established for the state pursuant to Section 1343 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 nongrandfathered health benefit plans 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 carrier may vary premium rates for a particular nongrandfathered 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. 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 health benefit plans that offer those benefits in addition to essential health benefits.
(D)Administrative costs, excluding any user fees required by the Exchange.
(E)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.
(l)If a carrier enters into a contract, agreement, or other arrangement with a third-party administrator or other entity to provide administrative, marketing, or other services related to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this chapter.
(m)(1)Except as provided in paragraph (2), this section shall become inoperative if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, in which case, 12 months after the repeal, carriers subject to this section shall instead be governed by Section 10705 to the extent permitted by federal law, and all references in this chapter to this section shall instead refer to Section 10705, except for purposes of paragraph (2).
(2)Paragraph (3) of subdivision (b) of this section shall remain operative as it relates to health benefit plans offered through the Exchange.
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)With respect to individual health benefit plans offered outside of the Exchange, 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, annual enrollment periods for policy years beginning on or after January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a health insurer shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a health insurer shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(4)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 paragraph (1) of 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 paragraph (1) of 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 of the preceding calendar year, coverage shall become effective on January 1 of the benefit year. 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 program established for the state pursuant to Section 1343 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.Section 10965.13 of the Insurance Code is amended to read:10965.13.(a)A health insurer that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 10965.3 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 10965.3.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health insurer shall issue a notice to a policyholder enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the policyholder that he or she may be eligible for lower cost coverage through the Exchange and shall inform the policyholder of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 10965.3.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)(1)On and after October 1, 2013, a plan shall fairly and affirmatively offer, market, and sell all of the plans small employer health care service plan contracts for plan years on or after January 1, 2014, to all small employers in each service area in which the plan provides or arranges for the provision of health care services.
(2)On and after October 1, 2013, a plan shall make available to each small employer all small employer health care service plan contracts that the plan offers and sells to small employers or to associations that include small employers in this state for plan years on or after January 1, 2014. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(3)A plan that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraphs (1) and (2) with respect to small employer health care service plan contracts offered through the Exchange in those geographic regions in which the plan offers plan contracts through the Exchange.
(b)A plan shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a plan shall provide special enrollment periods consistent with the special enrollment periods described in Section 1399.849, to the extent permitted by PPACA, except for the both of the following:
(1)The special enrollment period described in paragraph (3) of subdivision (c) of Section 1399.849.
(2)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to plan contracts offered through the Exchange.
(c)No plan or solicitor shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health care service plan contract that is provided in connection with employees employment or membership in a guaranteed association.
(d)Every plan shall file with the director the reasonable employee participation requirements and employer contribution requirements that will be applied in offering its plan contracts. Participation requirements shall be applied uniformly among all small employer groups, except that a plan may vary application of minimum employee participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employees premium. Employer contribution requirements shall not vary by employer size. A health care service plan shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in Section 1357.500 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and (2) allows a plan to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer. Members of an association eligible for health coverage under subdivision (m) of Section 1357.500, but not electing any health coverage through the association, shall not be counted as eligible employees for purposes of determining whether the guaranteed association meets a plans reasonable participation standards.
(e)The plan shall not reject an application from a small employer for a small employer health care service plan contract if all of the following conditions are met:
(1)The small employer offers health benefits to 100 percent of its eligible employees. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(3)The small employer agrees to inform the small employers employees of the availability of coverage and the provision that those not electing coverage must wait until the next open enrollment or a special enrollment period to obtain coverage through the group if they later decide they would like to have coverage.
(4)The employees and their dependents who are to be covered by the plan contract work or reside in the service area in which the plan provides or otherwise arranges for the provision of health care services.
(f)No plan or solicitor shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(2)Encourage or direct small employers to seek coverage from another plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plans approved service area.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on an individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
(g)A plan shall not, directly or indirectly, enter into any contract, agreement, or arrangement with a solicitor that provides for or results in the compensation paid to a solicitor for the sale of a health care service plan contract to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer. This subdivision does not apply to a compensation arrangement that provides compensation to a solicitor on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(h)(1)A policy or contract that covers a small employer, as defined in Section 1304(b) of PPACA and in Section 1357.500, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the policy or contract based on any of the following health status-related 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 eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a small employer health care service plan contract. 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.
(i)(1)A health care service plan shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all enrollees in all nongrandfathered small employer health benefit plans offered by the health care service plan in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the health care service plan outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a health care service plan shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 1367.005, 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 program established for the state pursuant to Sections Section 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 nongrandfathered small employer health benefit plans 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 nongrandfathered small employer health care service plan contract from its index rate based only on the following actuarially justified plan-specific factors:
(A)The actuarial value and cost-sharing design of the plan contract.
(B)The plan contracts provider network, delivery system characteristics, and utilization management practices.
(C)The benefits provided under the plan contract that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA. 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 plan contracts 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.
(j)A plan shall comply with the requirements of Section 1374.3.
(k)(1)Except as provided in paragraph (2), if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, this section shall become inoperative 12 months after the repeal date, in which case health care service plans subject to this section shall instead be governed by Section 1357.03 to the extent permitted by federal law, and all references in this article to this section shall instead refer to Section 1357.03 except for purposes of paragraph (2).
(2)Subdivision (b) shall remain operative with respect to health care service plan contracts offered through the Exchange.
SEC. 2.Section 1385.03 of the Health and Safety Code is amended to read:1385.03.(a)All health care service plans shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health care service plan contracts at least 120 days prior to implementing any rate change. All health care service plans shall file with the department all required rate information for nongrandfathered individual health care service plan contracts on the earlier of the following dates:
(1)One hundred days before the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849 1399.849, for the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)A plan shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of plan contract forms covered by the filing.
(3)Plan contract form numbers covered by the filing.
(4)Product type, such as a preferred provider organization or health maintenance organization.
(5)Segment type.
(6)Type of plan involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each plan contract and rating form.
(9)Enrollee months in each plan contract form.
(10)Annual rate.
(11)Total earned premiums in each plan contract form.
(12)Total incurred claims in each plan contract form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of subscribers or enrollees affected by each plan contract form.
(18)The plans overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A plan may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 1357.512 and 1399.855. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual plan contract trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in enrollee cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in enrollee benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 1385.06.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)A health care service plan subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health plan markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of subscribers.
(E)Number of covered lives affected.
(2)The plans average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the plans last rate filing for the same category of health benefit plan. To the extent possible, the plan shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health care service plans to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A plan shall submit any other information required under PPACA. A plan shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A plan shall respond to the departments request for any additional information necessary for the department to complete its review of the plans rate filing for individual and small group health care service plan contracts under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a plans rate increase for individual and small group health care service plan contracts is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to makes its determination.
(3)For all nongrandfathered individual health care service plan contracts, the department shall issue a determination that the plans rate increase is unreasonable or not justified no later than 15 days before the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849 1399.849, for the preceding policy year. If a health care service plan fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a plans rate increase is unreasonable or not justified.
(g)If the department determines that a plans rate increase for individual or small group health care service plan contracts is unreasonable or not justified consistent with this article, the health care service plan shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 1389.25. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (c) of Section 1374.21.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 1399.845.
SEC. 3.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 With respect to individual health benefit plans offered outside of the Exchange, 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, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive. inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15, of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a plan shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a plan shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(2)(4)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 paragraph (1) of 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 paragraph (1) of 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, 15 of the preceding calendar year, coverage shall become effective as of the following on January 1. 1 of the benefit year. 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 program established for the state pursuant to Sections Section 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. 4.Section 1399.859 of the Health and Safety Code is amended to read:1399.859.(a)A health care service plan that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 1399.849 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 1399.849.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health care service plan shall issue a notice to a subscriber enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the subscriber that he or she may be eligible for lower cost coverage through the Exchange and shall inform the subscriber of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 1399.849.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 5.Section 10181.3 of the Insurance Code is amended to read:10181.3.(a)All health insurers shall file with the department all required rate information for grandfathered individual and grandfathered and nongrandfathered small group health insurance policies at least 120 days prior to implementing any rate change. All health insurers shall file with the department all required rate information for nongrandfathered individual health insurance policies on the earlier of the following dates:
(1)One hundred days before the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 10965.3 10965.3, for the preceding policy year.
(2)The date specified in the federal guidance issued pursuant to Section 154.220(b) of Title 45 of the Code of Federal Regulations.
(b)An insurer shall disclose to the department all of the following for each individual and small group rate filing:
(1)Company name and contact information.
(2)Number of policy forms covered by the filing.
(3)Policy form numbers covered by the filing.
(4)Product type, such as indemnity or preferred provider organization.
(5)Segment type.
(6)Type of insurer involved, such as for profit or not for profit.
(7)Whether the products are opened or closed.
(8)Enrollment in each policy and rating form.
(9)Insured months in each policy form.
(10)Annual rate.
(11)Total earned premiums in each policy form.
(12)Total incurred claims in each policy form.
(13)Average rate increase initially requested.
(14)Review category: initial filing for new product, filing for existing product, or resubmission.
(15)Average rate of increase.
(16)Effective date of rate increase.
(17)Number of policyholders or insureds affected by each policy form.
(18)The insurers overall annual medical trend factor assumptions in each rate filing for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. An insurer may provide aggregated additional data that demonstrates or reasonably estimates year-to-year cost increases in specific benefit categories in the geographic regions listed in Sections 10753.14 and 10965.9. For purposes of this paragraph, major geographic region shall be defined by the department and shall include no more than nine regions.
(19)The amount of the projected trend attributable to the use of services, price inflation, or fees and risk for annual policy trends by aggregate benefit category, such as hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology.
(20)A comparison of claims cost and rate of changes over time.
(21)Any changes in insured cost sharing over the prior year associated with the submitted rate filing.
(22)Any changes in insured benefits over the prior year associated with the submitted rate filing.
(23)The certification described in subdivision (b) of Section 10181.6.
(24)Any changes in administrative costs.
(25)Any other information required for rate review under PPACA.
(c)An insurer subject to subdivision (a) shall also disclose the following aggregate data for all rate filings submitted under this section in the individual and small group health insurance markets:
(1)Number and percentage of rate filings reviewed by the following:
(A)Plan year.
(B)Segment type.
(C)Product type.
(D)Number of policyholders.
(E)Number of covered lives affected.
(2)The insurers average rate increase by the following categories:
(A)Plan year.
(B)Segment type.
(C)Product type.
(3)Any cost containment and quality improvement efforts since the insurers last rate filing for the same category of health benefit plan. To the extent possible, the insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(d)The department may require all health insurers to submit all rate filings to the National Association of Insurance Commissioners System for Electronic Rate and Form Filing (SERFF). Submission of the required rate filings to SERFF shall be deemed to be filing with the department for purposes of compliance with this section.
(e)A health insurer shall submit any other information required under PPACA. A health insurer shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(f)(1)A health insurer shall respond to the departments request for any additional information necessary for the department to complete its review of the health insurers rate filing for individual and small group health insurance policies under this article within five business days of the departments request or as otherwise required by the department.
(2)Except as provided in paragraph (3), the department shall determine whether a health insurers rate increase for individual and small group insurance policies is unreasonable or not justified no later than 60 days following receipt of all the information the department requires to make its determination.
(3)For all nongrandfathered individual health insurance policies, the department shall issue a determination that the health insurers rate increase is unreasonable or not justified no later than 15 days before the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 10965.3 10965.3, for the preceding policy year. If a health insurer fails to provide all the information the department requires in order for the department to make its determination, the department may determine that a health insurers rate increase is unreasonable or not justified.
(g)If the department determines that a health insurers rate increase for individual or small group health insurance policies is unreasonable or not justified consistent with this article, the health insurer shall provide notice of that determination to any individual or small group applicant. The notice provided to an individual applicant shall be consistent with the notice described in subdivision (c) of Section 10113.9. The notice provided to a small group applicant shall be consistent with the notice described in subdivision (d) of Section 10199.1.
(h)For purposes of this section, policy year has the same meaning as set forth in subdivision (g) of Section 10965.
SEC. 6.Section 10753.05 of the Insurance Code is amended to read:10753.05.(a)No group or individual policy or contract or certificate of group insurance or statement of group coverage providing benefits to employees of small employers as defined in this chapter shall be issued or delivered by a carrier subject to the jurisdiction of the commissioner regardless of the situs of the contract or master policyholder or of the domicile of the carrier nor, except as otherwise provided in Sections 10270.91 and 10270.92, shall a carrier provide coverage subject to this chapter until a copy of the form of the policy, contract, certificate, or statement of coverage is filed with and approved by the commissioner in accordance with Sections 10290 and 10291, and the carrier has complied with the requirements of Section 10753.17.
(b)(1)On and after October 1, 2013, each carrier shall fairly and affirmatively offer, market, and sell all of the carriers health benefit plans that are sold to, offered through, or sponsored by, small employers or associations that include small employers for plan years on or after January 1, 2014, to all small employers in each geographic region in which the carrier makes coverage available or provides benefits.
(2)A carrier that offers qualified health plans through the Exchange shall be deemed to be in compliance with paragraph (1) with respect to health benefit plans offered through the Exchange in those geographic regions in which the carrier offers plans through the Exchange.
(3)A carrier shall provide enrollment periods consistent with PPACA and described in Section 155.725 of Title 45 of the Code of Federal Regulations. Commencing January 1, 2014, a carrier shall provide special enrollment periods consistent with the special enrollment periods described in Section 10965.3, to the extent permitted by PPACA, except for the both of the following:
(A)The special enrollment period described in paragraph (3) of subdivision (c) of Section 10965.3.
(B)The triggering events identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of Title 45 of the Code of Federal Regulations with respect to health benefit plans offered through the Exchange.
(4)Nothing in this section shall be construed to require an association, or a trust established and maintained by an association to receive a master insurance policy issued by an admitted insurer and to administer the benefits thereof solely for association members, to offer, market, or sell a benefit plan design to those who are not members of the association. However, if the association markets, offers, or sells a benefit plan design to those who are not members of the association it is subject to the requirements of this section. This shall apply to an association that otherwise meets the requirements of paragraph (8) formed by merger of two or more associations after January 1, 1992, if the predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and met the requirements of paragraph (5).
(5)A carrier which (A) effective January 1, 1992, and at least 20 years prior to that date, markets, offers, or sells benefit plan designs only to all members of one association and (B) does not market, offer, or sell any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits shall not be required to market, offer, or sell to those who are not members of the association. However, if the carrier markets, offers, or sells any benefit plan design or any other individual, selected group, or group policy or contract providing medical, hospital, and surgical benefits to those who are not members of the association it is subject to the requirements of this section.
(6)Each carrier that sells health benefit plans to members of one association pursuant to paragraph (5) shall submit an annual statement to the commissioner which states that the carrier is selling health benefit plans pursuant to paragraph (5) and which, for the one association, lists all the information required by paragraph (7).
(7)Each carrier that sells health benefit plans to members of any association shall submit an annual statement to the commissioner which lists each association to which the carrier sells health benefit plans, the industry or profession which is served by the association, the associations membership criteria, a list of officers, the state in which the association is organized, and the site of its principal office.
(8)For purposes of paragraphs (4) and (6), an association is 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 small employer meeting its membership criteria, which do not condition membership directly or indirectly on the health or claims history of any person, which 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, which is organized and maintained in good faith for purposes unrelated to insurance, which has been in active existence on January 1, 1992, and at least five years prior to that date, which has a constitution and bylaws, or other analogous governing documents which provide for election of the governing board of the association by its members, which has contracted with one or more carriers to offer one or more health benefit plans to all individual members and small employer members in this state. Health coverage through an association that is not related to employment shall be considered individual coverage pursuant to Section 144.102(c) of Title 45 of the Code of Federal Regulations.
(c)On and after October 1, 2013, each carrier shall make available to each small employer all health benefit plans that the carrier offers or sells to small employers or to associations that include small employers for plan years on or after January 1, 2014. Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(d)Each carrier shall do all of the following:
(1)Prepare a brochure that summarizes all of its health benefit plans and make this summary available to small employers, agents, and brokers upon request. The summary shall include for each plan information on benefits provided, a generic description of the manner in which services are provided, such as how access to providers is limited, benefit limitations, required copayments and deductibles, and a telephone number that can be called for more detailed benefit information. Carriers are required to keep the information contained in the brochure accurate and up to date, and, upon updating the brochure, send copies to agents and brokers representing the carrier. Any entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare a summary brochure which includes that benefit plan.
(2)For each health benefit plan, prepare a more detailed evidence of coverage and make it available to small employers, agents, and brokers upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making selections of benefit plan designs. An entity that provides administrative services only with regard to a health benefit plan written or issued by another carrier shall not be required to prepare an evidence of coverage for that health benefit plan.
(3)Provide copies of the current summary brochure to all agents or brokers who represent the carrier and, upon updating the brochure, send copies of the updated brochure to agents and brokers representing the carrier for the purpose of selling health benefit plans.
(4)Notwithstanding subdivision (c) of Section 10753, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier.
(e)Every agent or broker representing one or more carriers for the purpose of selling health benefit plans to small employers shall do all of the following:
(1)When providing information on a health benefit plan to a small employer but making no specific recommendations on particular benefit plan designs:
(A)Advise the small employer of the carriers obligation to sell to any small employer any of the health benefit plans it offers to small employers, consistent with PPACA, and provide them, upon request, with the actual rates that would be charged to that employer for a given health benefit plan.
(B)Notify the small employer that the agent or broker will procure rate and benefit information for the small employer on any health benefit plan offered by a carrier for whom the agent or broker sells health benefit plans.
(C)Notify the small employer that, upon request, the agent or broker will provide the small employer with the summary brochure required in paragraph (1) of subdivision (d) for any benefit plan design offered by a carrier whom the agent or broker represents.
(D)Notify the small employer of the availability of coverage and the availability of tax credits for certain employers consistent with PPACA and state law, including any rules, regulations, or guidance issued in connection therewith.
(2)When recommending a particular benefit plan design or designs, advise the small employer that, upon request, the agent will provide the small employer with the brochure required by paragraph (1) of subdivision (d) containing the benefit plan design or designs being recommended by the agent or broker.
(3)Prior to filing an application for a small employer for a particular health benefit plan:
(A)For each of the health benefit plans offered by the carrier whose health benefit plan the agent or broker is presenting, provide the small employer with the benefit summary required in paragraph (1) of subdivision (d) and the premium for that particular employer.
(B)Notify the small employer that, upon request, the agent or broker will provide the small employer with an evidence of coverage brochure for each health benefit plan the carrier offers.
(C)Obtain a signed statement from the small employer acknowledging that the small employer has received the disclosures required by this paragraph and Section 10753.16.
(f)No carrier, agent, or broker shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health benefit plan which, in the case of an eligible employee meeting the definition in paragraph (1) of subdivision (f) of Section 10753, is provided in connection with the employees employment or which, in the case of an eligible employee as defined in paragraph (2) of subdivision (f) of Section 10753, is provided in connection with a guaranteed association.
(g)No carrier shall reject an application from a small employer for a health benefit plan provided:
(1)The small employer as defined by subparagraph (A) of paragraph (1) of subdivision (q) of Section 10753 offers health benefits to 100 percent of its eligible employees as defined in paragraph (1) of subdivision (f) of Section 10753. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees.
(2)The small employer agrees to make the required premium payments.
(h)No carrier or agent or broker shall, directly or indirectly, engage in the following activities:
(1)Encourage or direct small employers to refrain from filing an application for coverage with a carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(2)Encourage or direct small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation, or geographic location within the carriers approved service area of the small employer or the small employers employees.
(3)Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on the individuals race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.
This subdivision shall be enforced in the same manner as Section 790.03, including through Sections 790.035 and 790.05.
(i)No carrier shall, directly or indirectly, enter into any contract, agreement, or arrangement with an agent or broker that provides for or results in the compensation paid to an agent or broker for a health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer or the small employers employees. This subdivision shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer.
(j)(1)A health benefit plan offered to a small employer, as defined in Section 1304(b) of PPACA and in Section 10753, shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related 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 10291.5, a carrier shall not require an eligible employee or dependent to fill out a health assessment or medical questionnaire prior to enrollment under a health benefit plan. A carrier 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.
(k)(1)A carrier shall consider as a single risk pool for rating purposes in the small employer market the claims experience of all insureds in all nongrandfathered small employer health benefit plans offered by the carrier in this state, whether offered as health care service plan contracts or health insurance policies, including those insureds and enrollees who enroll in coverage through the Exchange and insureds and enrollees covered by the carrier outside of the Exchange.
(2)At least each calendar year, and no more frequently than each calendar quarter, a carrier shall establish an index rate for the small employer market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27, 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 program established for the state pursuant to Sections Section 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 nongrandfathered health benefit plans 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 carrier may vary premium rates for a particular nongrandfathered 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. 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 health benefit plans that offer those benefits in addition to essential health benefits.
(D)Administrative costs, excluding any user fees required by the Exchange.
(E)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.
(l)If a carrier enters into a contract, agreement, or other arrangement with a third-party administrator or other entity to provide administrative, marketing, or other services related to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this chapter.
(m)(1)Except as provided in paragraph (2), this section shall become inoperative if Section 2702 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is repealed, in which case, 12 months after the repeal, carriers subject to this section shall instead be governed by Section 10705 to the extent permitted by federal law, and all references in this chapter to this section shall instead refer to Section 10705, except for purposes of paragraph (2).
(2)Paragraph (3) of subdivision (b) of this section shall remain operative as it relates to health benefit plans offered through the Exchange.
SECTION 1.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 With respect to individual health benefit plans offered outside of the Exchange, 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, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive.
(2)With respect to individual health benefit plans offered through the Exchange, a health insurer shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive.
(3)With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a health insurer shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year.
(2)(4)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 paragraph (1) of 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 paragraph (1) of 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, 15 of the preceding calendar year, coverage shall become effective as of the following on January 1. 1 of the benefit year. 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 program established for the state pursuant to Section 1343 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.Section 10965.13 of the Insurance Code is amended to read:10965.13.(a)A health insurer that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 10965.3 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 10965.3.
(b)On or before October 1, 2013, and annually every October 1 thereafter, a health insurer shall issue a notice to a policyholder enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the policyholder that he or she may be eligible for lower cost coverage through the Exchange and shall inform the policyholder of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 10965.3.
(c)This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)(1)On and after 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 program established for the state pursuant to Sections 1343 and 1341 Section 1343 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.
|
Date
|
Status
|
|---|---|
| Oct 4, 2017 | Chaptered by Secretary of State - Chapter 468, Statutes of 2017. |
| Oct 4, 2017 | Approved by the Governor. |
| Sep 27, 2017 | Enrolled and presented to the Governor at 4 p.m. |
| Sep 15, 2017 | Read third time. Passed. Ordered to the Assembly. |
| Sep 16, 2017 | In Assembly. Concurrence in Senate amendments pending. |
| Sep 15, 2017 | Pursuant to Senate Rule 28.8 |
| Sep 11, 2017 | Read second time. Ordered to third reading. |
| Sep 8, 2017 | Read third time and amended. Ordered to second reading. |
| Sep 1, 2017 | Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(b). |
| Sep 5, 2017 | From committee: That the measure be returned to Senate Floor for consideration. (Ayes 9. Noes 0.) (September 5) |
| Sep 1, 2017 | Read second time. Ordered to third reading. |
| Aug 31, 2017 | Read third time and amended. Ordered to second reading. |
| Jul 20, 2017 | Read second time. Ordered to third reading. |
| Jul 19, 2017 | From committee: Do pass. (Ayes 8. Noes 0.) (July 19). |
| May 18, 2017 | Referred to Com. on HEALTH. |
| May 4, 2017 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 4, 2017 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 1387.) |
| Apr 27, 2017 | Read second time. Ordered to Consent Calendar. |
| Apr 26, 2017 | From committee: Do pass. To Consent Calendar. (Ayes 15. Noes 0.) (April 25). |
| Jan 30, 2017 | Referred to Com. on HEALTH. |
| Jan 13, 2017 | From printer. May be heard in committee February 12. |
| Jan 12, 2017 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 16, 2017 | AB 156 WOOD Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 15, 2017 | Assembly 3rd Reading AB156 Wood By Hernandez | Senate Floor |
Passed |
|
| Sep 5, 2017 | That the measure be returned to Senate Floor for consideration. Ordered to third reading. | Senate Standing Committee on Health |
Passed |
|
| Jul 19, 2017 | Do pass | Senate Standing Committee on Health |
Passed |
|
| May 4, 2017 | AB 156 WOOD Consent Calendar Second Day | Assembly Floor |
Passed |
|
| Apr 25, 2017 | Do pass. To Consent Calendar. | Assembly Standing Committee on Health |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| alzheimer's greater los angeles | ** Support | Sep 15, 2017 |
| APLA Health | ** Support | Sep 15, 2017 |
| California Association Of Health Plans | * Neutral | Sep 5, 2017 |
| California Health Plus Advocates | * Support | Sep 5, 2017 |
| california health professional student alliance | ** Support | Sep 15, 2017 |
| California Immigrant Policy Center | ** Support | Sep 15, 2017 |
| California Pan-Ethnic Health Network | ** Support | Sep 15, 2017 |
| California Physicians Alliance | ** Support | Sep 15, 2017 |
| California Public Health Association-North | ** Support | Sep 15, 2017 |
| California School Employees Association | ** Support | Sep 15, 2017 |
| Children Now | ** Support | Sep 15, 2017 |
| Consumers Union | ** Support | Sep 15, 2017 |
| Health Access California | ** Support | Sep 15, 2017 |
| Jewish Family Service of Los Angeles | ** Support | Sep 15, 2017 |
| Justice in Aging | ** Support | Sep 15, 2017 |
| Lifelong Medical Care | ** Support | Sep 15, 2017 |
| National Health Law Program | ** Support | Sep 15, 2017 |
| Nicos Chinese Health Coalition Support | ** Support | Sep 15, 2017 |
| Project Inform | ** Support | Sep 15, 2017 |
| Public Health Advocates | ** Support | Sep 15, 2017 |
| Service Employees International Union | ** Support | Sep 15, 2017 |
| Small Business Majority | ** Support | Sep 15, 2017 |
| St. Louise Resource Services | ** Support | Sep 15, 2017 |
| Voices For Progress Education Fund | ** Support | Sep 15, 2017 |
| western center on law and poverty | ** Support | Sep 15, 2017 |
(Without Reference to File)
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 156
Author:(Wood)
As Amended Ver:September 8, 2017
Majority vote
ASSEMBLY: | 76-0 | (May 4, 2017) | SENATE: | 38-0 | (September 15, 2017) |
Original Committee Reference: HEALTH
SUMMARY: Deletes references to the federal transitional reinsurance program in the individual and small group market, and revises the enrollment periods for individual health benefit plans offered outside of the California Health Benefit Exchange (Exchange or Covered California) and through the Exchange for policy years beginning on or after 2019. Specifically, this bill:
- Deletes a reference to the federal reinsurance program that establishes requirements on health care service plans (health plan) or insurers with regard to the single risk pool index rate.
- Establishes an annual enrollment period for policy years beginning on or after January 1, 2019, from October 15, of the preceding calendar year, to January 15 of the benefit year, for individual health benefit plans offered outside of the Exchange.
- Sets forth the annual enrollment period for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, and allows for a special enrollment period from October 15 to October 31 and December 16 to January 15 for products offered through the Exchange.
- States that an application for a health benefit plan submitted during the special enrollment periods identified in 3) above will be treated the same as an application submitted during the annual open enrollment period.
- Provides for the effective date of coverage for plan selections made between October 13 and October 31 to be January 1 of the benefit year, and for plan selections made from December 16 to January 15 to be no later than February 1 of the benefit year.
- Sets the rate filing date requirement of one hundred days before October 15 and the regulator rate filing determination to no later than 15 days before October 15 for all non-grandfathered individual health care service plan contracts or policies.
The Senate amendments set the open enrollment period outside of the Exchange at October 15 to January 15; and inside the Exchange at November 1, to December 15 of the preceding calendar year, establish new special enrollment periods with respect to individual health benefit plans offered through the Exchange for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year, and make conforming changes to existing law.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: According to the author, the Patient Protection and Affordable Care Act (ACA) provide the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. Current state law provides for an annual enrollment period for on and off Exchange individual market plans from November 1, of the preceding calendar year, to January 31 of the benefit year, for plan years that started January 2016. Recently finalized federal market stability rule aimed to establish a uniform annual open enrollment period from November 1 through December 15 for plan years beginning January 2019. Though, federal guidance authorizes states to supplement this open enrollment period.
This bill would bring California law into compliance with the federal market stabilization rule and also maintain our current three month long annual open enrollment period. This consistency will help to boost enrollment in the individual market, hopefully among healthy enrollees, which will improve the market risk mix and keep overall premiums down. Alternatively, a shorter open enrollment period ending in mid-December will raise concerns related to consumer financial burden during the holidays. It would also limit consumers' ability and time to shop, compare, and select a health plan that fit their health care needs. A shorter open enrollment period will lower enrollment, as individuals and families balance making important health care and financial decisions during a shortened time period and during the holidays.
Enacted in March 2010, the ACA expands access to quality, affordable insurance and health care. As of January 1, 2014, insurers are no longer able to deny coverage or charge higher premiums based on preexisting conditions (under rules referred to as guaranteed issue and modified community rating, respectively).
- Reinsurance Provisions. Three provisions of the ACA: a) risk adjustment (redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees by protecting against adverse selection and risk selection in the individual and small group markets, inside and outside the Exchanges by spreading financial risk across the markets); b) reinsurance (see discussion below); and, c) risk corridors (limits losses and gains beyond an allowable range by stabilizing premiums and protects against inaccurate premium setting during initial years of the reform), were intended to promote insurer competition on the basis of quality and value and promote insurance market stability, particularly in the early years of ACA reform.
The ACA established a transitional reinsurance program to stabilize premiums inside and outside of the Exchanges. The transitional reinsurance program collected contributions from contributing entities to fund reinsurance payments to issuers of eligible market plans, the administrative costs of operating the reinsurance program, and the General Fund of the U.S. Treasury for the 2014, 2015, and 2016 benefit years. The program transfers funds to individual market insurance plans with higher-cost enrollees in order to reduce the incentive for insurers to charge higher premiums due to new market reforms that guarantee the availability of coverage regardless of health status.
- Enrollment Provisions. Existing state law establishes the open enrollment period for the California individual health insurance market, for policy years beginning on or after January 1, 2016, from November 1 of the preceding calendar year to January 31 of the policy year.
On April 13, 2017, the federal Department of Health and Human Services released final rules requiring Exchanges to provide for the individual health insurance market an annual open enrollment period, for policy years beginning on or after January 1, 2018, to begin on November 1 and end on December 15 of the preceding calendar year. The federal rules provide states flexibility to create additional special enrollment periods for the 2018 policy year to supplement the open enrollment period. For the 2018 plan year, Covered California will establish special enrollment periods to supplement the open enrollment period in order to meet the requirements of current state law which requires the enrollment period to span November 1 to January 31.
Additionally, existing federal rules grant ongoing authority for states to establish special enrollment periods that are in addition to the special enrollment periods outlined in federal law and regulation as long as they are more consumer protective than the other special enrollment periods. Under this ongoing authority, this bill establishes special enrollment periods in addition to the required open enrollment period prescribed by federal rules which would allow the total enrollment period to span October 15 to January 15 for policy years 2019 and beyond. For consumers enrolled on October 15, 2018 to December 15, 2018, the effective date of coverage for the consumer will be on January 1, 2019. For consumers enrolled on December 16, 2018 to January 15, 2019, the effective date of coverage for the consumer will be no later than February 1, 2019.
With regard to enrollment in the off-Exchange individual market, this bill prescribes the annual open enrollment period as October 15 to January 15, to be consistent with the Covered California market.
Health Access California, the sponsor of this bill, contends that this bill will provide consumers with adequate time to shop and compare health plans and sign up for coverage while maintaining a healthy risk mix in Covered California and let consumers do it when they are not in the midst of the holidays. Western Center on Law and Poverty states that because annual enrollment is also when consumers renew their Covered California plans, maintaining the annual enrollment period through the first couple of weeks of January allows those consumers who were passively renewed into a Covered California plan to make changes once they get their first bill and see the difference in premiums that they will be paying in the next year.
There is no known opposition to this bill.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0002412
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 156
:
SENATE HEALTH COMMITTEE: 8-0, 7/19/17
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Roth
NO VOTE RECORDED: Nielsen
SENATE HEALTH COMMITTEE: 9-0, 9/5/17 (Pursuant to Senate Rule 29.10)
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Nielsen, Roth
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/4/17 (Consent) - See last page for vote
SOURCE: Health Access California
This bill deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual and small group health insurance policy single risk pool index rate adjustments, and revises for 2019 and after the open enrollment periods under which people may purchase health insurance through Covered California and the individual insurance market outside of Covered California.
Senate Floor Amendments of 9/8/17 replace “of the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849” with “before October 15th.”
Senate Floor Amendments of 8/31/17 set the open enrollment period outside of Covered California at October 15 to January 15; and inside Covered California at November 1 to December 15 of the preceding calendar year, establish new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year, and make conforming changes to existing law.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) and the California Department of Insurance (CDI) to regulate health insurers.
- Establishes California’s health benefit exchange (known as Covered California) as a state-based marketplace for individuals and small business to purchase health insurance.
- Sets the annual enrollment period for individual market health insurance plans, whether operating inside or outside of Covered California 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.
- Establishes special enrollment triggering events under which an individual may enroll in or change plans during a time that is not the annual enrollment period.
- Requires health plans and insurers to file premium rate information for nongrandfathered individual health plans or policies to regulators 100 days in advance of the open enrollment period or the date specified by federal regulations, and regulators to determine if the rates are reasonable or not no later than 15 days before the open enrollment period.
This bill:
- Deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual and small group health plans with regard to the single risk pool index rate.
- Sets the open enrollment period for policy years beginning on or after January 1, 2019, outside of Covered California at October 15 to January 15; and inside Covered California at November 1 to December 15 of the preceding calendar year.
- Establishes new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year.
- Revises the description of when the rate filing requirement and regulator response requirement should be set to before October 15th of the preceding policy year, instead of the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849.
Comments
- Author’s statement. According to the author, enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expanded access to quality and affordable health insurance by providing subsidies to eligible individuals and the creation of health benefit exchanges where individuals can shop and choose from different health plans. Current state law provides for an annual enrollment period for on and off exchange individual market plans from November 1, of the preceding calendar year, to January 31 of the benefit year, for plan years that started January 2016. A recently finalized federal market stability rule aimed to establish a uniform annual open enrollment period from November 1 through December 15 for plan years beginning January 2019. Though, federal guidance authorizes states to supplement this open enrollment period.
This bill brings California law into compliance with the federal market stabilization rule and also maintains our current three month long annual open enrollment period. This consistency will help to boost enrollment in the individual market, hopefully among healthy enrollees, which will improve the market risk mix and keep overall premiums down. Alternatively, a shorter open enrollment period ending in mid-December will raise concerns related to consumer financial burden during the holidays. It would also limit consumers’ ability and time to shop, compare, and select a health plan that fit their health care needs. A shorter open enrollment period will lower enrollment, as individuals and families balance making important health care and financial decisions during a shortened time period and during the holidays.
- Open enrollment periods. On April 13, 2017, the federal Department of Health and Human Services released final rules requiring health benefit exchanges to provide for the individual health insurance market an annual open enrollment period, for policy years beginning on or after January 1, 2018, to begin on November 1 and end on December 15 of the preceding calendar year. The federal rules provide states flexibility to create additional special enrollment periods for the 2018 policy year to supplement the open enrollment period. For the 2018 plan year, Covered California will establish special enrollment periods to supplement the open enrollment period in order to meet the requirements of current state law which requires the enrollment period to span November 1 to January 31.
Additionally, existing federal rules grant ongoing authority for states to establish special enrollment periods that are in addition to the special enrollment periods outlined in federal law and regulation as long as they are more consumer protective than the other special enrollment periods. Under this ongoing authority, this bill establishes special enrollment periods in addition to the required open enrollment period prescribed by federal rules which would allow the total enrollment period to span October 15 to January 15 for policy years 2019 and beyond.
Below is a table outlining the enrollment period and dates of coverage effectiveness for Covered California enrollees as proposed by this bill:
Enrollment Period Type | Enrollment Window for all Consumers | Effective Date of Coverage for the Consumer |
Special Enrollment | October 15, 2018 to October 31, 2018 | January 1, 2019 |
Open Enrollment | November 1, 2018 to December 15, 2018 | January 1, 2019 |
Special Enrollment | December 16, 2018 to January 15, 2019 | No Later Than February 1, 2019 |
With regard to enrollment in the individual market outside of Covered California, this bill establishes the annual open enrollment period as October 15 to January 15, to be consistent with the Covered California market. However, because the federal open enrollment period applies specifically to health benefit exchanges, the requirements regarding special enrollment periods are not applied to the market outside of Covered California. Consistent with the federal rules, the market outside of Covered California requires a health plan or insurer in the individual market to allow an individual to purchase health insurance coverage during the same annual open enrollment period required of Covered California. The net effect of this bill is that individuals will be able to enroll in individual market coverage either through Covered California or outside of Covered California for a 90-day period that begins on October 15 of the preceding year through January 15 of the benefit year.
- Reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014.
Related/Prior Legislation
SB 134 (Hernandez, 2017) contains similar provisions to this bill related to the reinsurance issue for health plans that operate in the small group market. AB 157 (Wood, 2017) contains similar provisions to SB 134 that apply to the Insurance Code.
SB 125 (Hernandez, Chapter 9, Statutes of 2015) established 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. The bill also conformed 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, and extended the sunset date of the California Health Benefit Review Program to June 30, 2017 and made changes to its analyses and timelines. Extended the fee assessed on health plans and insurers for this purpose until fiscal year 2016-17.
SB X1 2 (Hernandez, Chapter 2, Statutes of 2013) and AB X1 2 (Pan, Chapter 1, Statues of 2013) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
SB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increase the geographic rating regions to 19 and require no later than June 1, 2017, DMHC in collaboration with the Exchange and the CDI to review the geographic rating regions and submit a report to the appropriate policy committees.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Health Access California (source)
Alzheimer’s Greater Los Angeles
APLA Health
California Health Professional Student Alliance
California Immigrant Policy Center
California Pan-Ethnic Health Network
California Physicians Alliance
California Public Health Association-North
California School Employees Association
Children Now
Consumers Union
Jewish Family Service of Los Angeles
Justice in Aging
LifeLong Medical Care
National Health Law Program
NICOS Chinese Health Coalition Support
Project Inform
Public Health Advocates
Service Employees International Union
Small Business Majority
St. Louise Resource Services
Voices for Progress Education Fund
Western Center on Law and Poverty
None received
ARGUMENTS IN SUPPORT: Health Access California writes this bill helps consumers by preserving our current three-month annual open enrollment period beginning 2019 by establishing October 15 to January 15 as the annual open enrollment period. According to Health Access, this bill shifts the start date of annual open enrollment period earlier, while at the same time ensures there is time after the holidays to sign up for coverage until January 15, additionally, this bill will provide consumers with adequate time to shop and compare health plans and sign up for coverage while maintaining a healthy risk mix in Covered California— and let them do it when they are not in the midst of the holidays. The Western Center on Law and Poverty adds that maintaining the annual enrollment period through the first couple of weeks of January allows those consumers who were passively renewed into a Covered California plan to make changes once they get their first bill and see the difference in premiums that they will be paying in the next year.
ASSEMBLY FLOOR: 76-0, 5/4/17
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Bigelow, Cristina Garcia, Patterson
9/15/17 14:20:39
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 156
AUTHOR: | Wood | ||
VERSION: | August 31, 2017 | ||
HEARING DATE: | September 5, 2017 | ||
CONSULTANT: | Teri Boughton | ||
PURSUANT TO SENATE RULE 29.10
SUBJECT: Individual market: enrollment periods
SUMMARY:
Deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual and small group health insurance policy single risk pool index rate adjustments, and revises for 2019 and after the open enrollment periods under which people may purchase health insurance through Covered California and the individual insurance market outside of Covered California.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things requires a health insurance issuer to consider the claims experience of all enrollees in all health insurance policies (other than grandfathered health plans), as specified, offered by such issuer in the individual market in a state, including those insureds who do not enroll in such plans through a health benefit exchange, to be members of a single risk pool.
- Establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) under the Health and Safety Code and the California Department of Insurance (CDI) to regulate health insurers under the Insurance Code.
- Requires a health insurer to consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all non-grandfathered individual health benefit plans offered by that health insurer in this state, whether offered as a health insurance policy, or individual health plan, including those insureds and enrollees who enroll in individual coverage through California’s health benefit exchange (known as Covered California) and insureds and enrollees who enroll in individual coverage outside of Covered California.
- Requires each year, a health insurance carrier to 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, within the single risk pool.
- Requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to specified sections of the ACA, and Covered California user fees, as described in federal regulations.
- Sets the annual enrollment period for individual market health insurance plans, whether operating inside or outside of Covered California 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.
- Establishes special enrollment triggering events under which an individual may enroll in or change plans during a time that is not the annual enrollment period.
- Requires health plans and insurers to file premium rate information to regulators 100 days in advance of the open enrollment period and regulators to determine if the rates are reasonable or not no later than 15 days before the open enrollment period.
This bill:
- Deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual and small group health plans with regard to the single risk pool index rate.
- Sets the open enrollment period for policy years beginning on or after January 1, 2019 outside of Covered California at October 15 to January 15; and inside Covered California at November 1, to December 15 of the preceding calendar year.
- Establishes new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year.
- Sets the rate filing requirement and regulator response requirement to the open enrollment period for individual health benefit plans offered outside of Covered California.
FISCAL EFFECT:
No significant state cost anticipated.
PRIOR VOTES:
Assembly Floor: | 76 - 0 |
Assembly Health Committee: | 15 - 0 |
|
|
COMMENTS:
- Author’s statement. According to the author, enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expanded access to quality and affordable health insurance by providing subsidies to eligible individuals and the creation of health benefit exchanges where individuals can shop and choose from different health plans. Current state law provides for an annual enrollment period for on and off exchange individual market plans from November 1, of the preceding calendar year, to January 31 of the benefit year, for plan years that started January 2016. A recently finalized federal market stability rule aimed to establish a uniform annual open enrollment period from November 1 through December 15 for plan years beginning January 2019. Though, federal guidance authorizes states to supplement this open enrollment period.
This bill would bring California law into compliance with the federal market stabilization rule and also maintain our current three month long annual open enrollment period. This consistency will help to boost enrollment in the individual market, hopefully among healthy enrollees, which will improve the market risk mix and keep overall premiums down. Alternatively, a shorter open enrollment period ending in mid-December will raise concerns related to consumer financial burden during the holidays. It would also limit consumers’ ability and time to shop, compare, and select a health plan that fit their health care needs. A shorter open enrollment period will lower enrollment, as individuals and families balance making important health care and financial decisions during a shortened time period and during the holidays.
- Background on open enrollment periods. On April 13, 2017, the federal Department of Health and Human Services released final rules requiring health benefit exchanges to provide for the individual health insurance market an annual open enrollment period, for policy years beginning on or after January 1, 2018, to begin on November 1 and end on December 15 of the preceding calendar year. The federal rules provide states flexibility to create additional special enrollment periods for the 2018 policy year to supplement the open enrollment period. For the 2018 plan year, Covered California will establish special enrollment periods to supplement the open enrollment period in order to meet the requirements of current state law which requires the enrollment period to span November 1 to January 31.
Additionally, existing federal rules grant ongoing authority for states to establish special enrollment periods that are in addition to the special enrollment periods outlined in federal law and regulation as long as they are more consumer protective than the other special enrollment periods. Under this ongoing authority, this bill establishes special enrollment periods in addition to the required open enrollment period prescribed by federal rules which would allow the total enrollment period to span October 15 to January 15 for policy years 2019 and beyond.
Below is a table outlining the enrollment period and dates of coverage effectiveness for Covered California enrollees as proposed by this bill:
Enrollment Period Type | Enrollment Window for all Consumers | Effective Date of Coverage for the Consumer |
Special Enrollment | October 15, 2018 to October 31, 2018 | January 1, 2019 |
Open Enrollment | November 1, 2018 to December 15, 2018 | January 1, 2019 |
Special Enrollment | December 16, 2018 to January 15, 2019 | No Later Than February 1, 2019 |
With regard to enrollment in the individual market outside of Covered California, this bill establishes the annual open enrollment period as October 15 to January 15, to be consistent with the Covered California market. However, because the federal open enrollment period applies specifically to health benefit exchanges, the requirements regarding special enrollment periods are not applied to the market outside of Covered California. Consistent with the federal rules, the market outside of Covered California requires a health plan or insurer in the individual market to allow an individual to purchase health insurance coverage during the same annual open enrollment period required of Covered California. The net effect of this bill is that individuals will be able to enroll in individual market coverage either through Covered California or outside of Covered California for a 90-day period that begins on October 15 of the preceding year through January 15 of the benefit year.
- Background on the reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014. The table below describes the three programs.
Program: | Reinsurance | Risk Corridors | Risk Adjustment |
Purpose: | Provides funding to issuers that incur high claims costs for enrollees | Limits issuer losses (and gains) | Transfers funds from lower risk plans to higher risk plans |
Participants: | All issuers and third party administrators on behalf of group health plans contribute funding; non-grandfathered individual market plans (inside and outside the Exchange) are eligible for payments | Qualified health plans | Non-grandfathered individual and small group market plans, inside and outside the Exchange |
Time Frame: | 3 years (2014-2016) | 3 years (2014-2016) | Permanent |
- Related legislation. SB 134 contains similar provisions to this bill that apply to health plans that operate in the small group market. AB 157 (Wood) contains similar provisions to SB 134 that apply to the Insurance Code.
- Prior legislation. SB 125 (Hernandez, Chapter 9, Statutes of 2015) 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. The bill also 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, and extends the sunset date of the California Health Benefit Review Program 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.
SB X1 2 (Hernandez, Chapter 2, Statutes of 2013) and AB X1 2 (Pan, Chapter 1, Statues of 2013) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
SB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increase the geographic rating regions to 19 and require no later than June 1, 2017, DMHC in collaboration with the Exchange and the CDI to review the geographic rating regions and submit a report to the appropriate policy committees.
- Support. Health Access California writes this bill helps consumers by preserving our current 3-month annual open enrollment period beginning 2019 by establishing October 15 to January 15 as the annual open enrollment period. According to Health Access this bill shifts the start date of annual open enrollment period earlier, while at the same time ensures there is time after the holidays to sign up for coverage until January 15, additionally, this bill will provide consumers with adequate time to shop and compare health plans and sign up for coverage while maintaining a healthy risk mix in Covered California— and let them do it when they are not in the midst of the holidays. The Western Center on Law and Poverty adds that maintaining the annual enrollment period through the first couple of weeks of January allows those consumers who were passively renewed into a Covered California plan to make changes once they get their first bill and see the difference in premiums that they will be paying in the next year.
SUPPORT AND OPPOSITION:
Support: Health Access California (sponsor)
Alzheimer’s Greater Los Angeles
California Health Professional Student Alliance
California Immigrant Policy Center
California Physicians Alliance
California Public Health Association-North
California School Employees Association
Children Now
Justice in Aging
NICOS Chinese Health Coalition Support
Project Inform
St. Louise Resource Services
Small Business Majority
Voices for Progress Education Fund
Western Center on Law and Poverty
Oppose: None received
-- END --
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 156
:
SENATE HEALTH COMMITTEE: 8-0, 7/19/17
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Roth
NO VOTE RECORDED: Nielsen
SENATE HEALTH COMMITTEE: 9-0, 9/5/17 (Pursuant to Senate Rule 29.10)
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Nielsen, Roth
ASSEMBLY FLOOR: 76-0, 5/4/17 (Consent) - See last page for vote
SOURCE: Health Access California
This bill deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual and small group health insurance policy single risk pool index rate adjustments, and revises for 2019 and after the open enrollment periods under which people may purchase health insurance through Covered California and the individual insurance market outside of Covered California.
Senate Floor Amendments of 9/8/17 replace “of the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849” with “before October 15th.”
Senate Floor Amendments of 8/31/17 set the open enrollment period outside of Covered California at October 15 to January 15; and inside Covered California at November 1 to December 15 of the preceding calendar year, establish new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year, and make conforming changes to existing law.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) and the California Department of Insurance (CDI) to regulate health insurers.
- Establishes California’s health benefit exchange (known as Covered California) as a state-based marketplace for individuals and small business to purchase health insurance.
- Sets the annual enrollment period for individual market health insurance plans, whether operating inside or outside of Covered California 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.
- Establishes special enrollment triggering events under which an individual may enroll in or change plans during a time that is not the annual enrollment period.
- Requires health plans and insurers to file premium rate information for nongrandfathered individual health plans or policies to regulators 100 days in advance of the open enrollment period or the date specified by federal regulations, and regulators to determine if the rates are reasonable or not no later than 15 days before the open enrollment period.
This bill:
- Deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual and small group health plans with regard to the single risk pool index rate.
- Sets the open enrollment period for policy years beginning on or after January 1, 2019, outside of Covered California at October 15 to January 15; and inside Covered California at November 1 to December 15 of the preceding calendar year.
- Establishes new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year.
- Revises the description of when the rate filing requirement and regulator response requirement should be set to before October 15th of the preceding policy year, instead of the first day of the applicable open enrollment period for individual health benefit plans offered outside of the California Health Benefit Exchange, as described in Section 1399.849.
Comments
- Author’s statement. According to the author, enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expanded access to quality and affordable health insurance by providing subsidies to eligible individuals and the creation of health benefit exchanges where individuals can shop and choose from different health plans. Current state law provides for an annual enrollment period for on and off exchange individual market plans from November 1, of the preceding calendar year, to January 31 of the benefit year, for plan years that started January 2016. A recently finalized federal market stability rule aimed to establish a uniform annual open enrollment period from November 1 through December 15 for plan years beginning January 2019. Though, federal guidance authorizes states to supplement this open enrollment period.
This bill brings California law into compliance with the federal market stabilization rule and also maintains our current three month long annual open enrollment period. This consistency will help to boost enrollment in the individual market, hopefully among healthy enrollees, which will improve the market risk mix and keep overall premiums down. Alternatively, a shorter open enrollment period ending in mid-December will raise concerns related to consumer financial burden during the holidays. It would also limit consumers’ ability and time to shop, compare, and select a health plan that fit their health care needs. A shorter open enrollment period will lower enrollment, as individuals and families balance making important health care and financial decisions during a shortened time period and during the holidays.
- Open enrollment periods. On April 13, 2017, the federal Department of Health and Human Services released final rules requiring health benefit exchanges to provide for the individual health insurance market an annual open enrollment period, for policy years beginning on or after January 1, 2018, to begin on November 1 and end on December 15 of the preceding calendar year. The federal rules provide states flexibility to create additional special enrollment periods for the 2018 policy year to supplement the open enrollment period. For the 2018 plan year, Covered California will establish special enrollment periods to supplement the open enrollment period in order to meet the requirements of current state law which requires the enrollment period to span November 1 to January 31.
Additionally, existing federal rules grant ongoing authority for states to establish special enrollment periods that are in addition to the special enrollment periods outlined in federal law and regulation as long as they are more consumer protective than the other special enrollment periods. Under this ongoing authority, this bill establishes special enrollment periods in addition to the required open enrollment period prescribed by federal rules which would allow the total enrollment period to span October 15 to January 15 for policy years 2019 and beyond.
Below is a table outlining the enrollment period and dates of coverage effectiveness for Covered California enrollees as proposed by this bill:
Enrollment Period Type | Enrollment Window for all Consumers | Effective Date of Coverage for the Consumer |
Special Enrollment | October 15, 2018 to October 31, 2018 | January 1, 2019 |
Open Enrollment | November 1, 2018 to December 15, 2018 | January 1, 2019 |
Special Enrollment | December 16, 2018 to January 15, 2019 | No Later Than February 1, 2019 |
With regard to enrollment in the individual market outside of Covered California, this bill establishes the annual open enrollment period as October 15 to January 15, to be consistent with the Covered California market. However, because the federal open enrollment period applies specifically to health benefit exchanges, the requirements regarding special enrollment periods are not applied to the market outside of Covered California. Consistent with the federal rules, the market outside of Covered California requires a health plan or insurer in the individual market to allow an individual to purchase health insurance coverage during the same annual open enrollment period required of Covered California. The net effect of this bill is that individuals will be able to enroll in individual market coverage either through Covered California or outside of Covered California for a 90-day period that begins on October 15 of the preceding year through January 15 of the benefit year.
- Reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014.
Related/Prior Legislation
SB 134 (Hernandez, 2017) contains similar provisions to this bill related to the reinsurance issue for health plans that operate in the small group market. AB 157 (Wood, 2017) contains similar provisions to SB 134 that apply to the Insurance Code.
SB 125 (Hernandez, Chapter 9, Statutes of 2015) established 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. The bill also conformed 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, and extended the sunset date of the California Health Benefit Review Program to June 30, 2017 and made changes to its analyses and timelines. Extended the fee assessed on health plans and insurers for this purpose until fiscal year 2016-17.
SB X1 2 (Hernandez, Chapter 2, Statutes of 2013) and AB X1 2 (Pan, Chapter 1, Statues of 2013) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
SB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increase the geographic rating regions to 19 and require no later than June 1, 2017, DMHC in collaboration with the Exchange and the CDI to review the geographic rating regions and submit a report to the appropriate policy committees.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Health Access California (source)
Alzheimer’s Greater Los Angeles
APLA Health
California Health Professional Student Alliance
California Immigrant Policy Center
California Pan-Ethnic Health Network
California Physicians Alliance
California Public Health Association-North
California School Employees Association
Children Now
Consumers Union
Jewish Family Service of Los Angeles
Justice in Aging
LifeLong Medical Care
National Health Law Program
NICOS Chinese Health Coalition Support
Project Inform
Public Health Advocates
Service Employees International Union
Small Business Majority
St. Louise Resource Services
Voices for Progress Education Fund
Western Center on Law and Poverty
None received
ARGUMENTS IN SUPPORT: Health Access California writes this bill helps consumers by preserving our current three-month annual open enrollment period beginning 2019 by establishing October 15 to January 15 as the annual open enrollment period. According to Health Access, this bill shifts the start date of annual open enrollment period earlier, while at the same time ensures there is time after the holidays to sign up for coverage until January 15, additionally, this bill will provide consumers with adequate time to shop and compare health plans and sign up for coverage while maintaining a healthy risk mix in Covered California— and let them do it when they are not in the midst of the holidays. The Western Center on Law and Poverty adds that maintaining the annual enrollment period through the first couple of weeks of January allows those consumers who were passively renewed into a Covered California plan to make changes once they get their first bill and see the difference in premiums that they will be paying in the next year.
ASSEMBLY FLOOR: 76-0, 5/4/17
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Bigelow, Cristina Garcia, Patterson
9/11/17 11:18:05
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 156
:
SENATE HEALTH COMMITTEE: 8-0, 7/19/17
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Roth
NO VOTE RECORDED: Nielsen
SENATE HEALTH COMMITTEE: 9-0, 9/5/17 (pursuant to Senate Rule 29.10)
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Nielsen, Roth
ASSEMBLY FLOOR: 76-0, 5/4/17 (Consent) - See last page for vote
SOURCE: Health Access California
This bill deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual and small group health insurance policy single risk pool index rate adjustments, and revises for 2019 and after the open enrollment periods under which people may purchase health insurance through Covered California and the individual insurance market outside of Covered California.
Senate Floor Amendments of 8/31/17 set the open enrollment period outside of Covered California at October 15 to January 15; and inside Covered California at November 1, to December 15 of the preceding calendar year, establish new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year, and make conforming changes to existing law.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) and the California Department of Insurance (CDI) to regulate health insurers.
- Establishes California’s health benefit exchange (known as Covered California) as a state-based marketplace for individuals and small business to purchase health insurance.
- Sets the annual enrollment period for individual market health insurance plans, whether operating inside or outside of Covered California 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.
- Establishes special enrollment triggering events under which an individual may enroll in or change plans during a time that is not the annual enrollment period.
- Requires health plans and insurers to file premium rate information to regulators 100 days in advance of the open enrollment period and regulators to determine if the rates are reasonable or not no later than 15 days before the open enrollment period.
This bill:
- Deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual and small group health plans with regard to the single risk pool index rate.
- Sets the open enrollment period for policy years beginning on or after January 1, 2019, outside of Covered California at October 15 to January 15; and inside Covered California at November 1, to December 15 of the preceding calendar year.
- Establishes new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year.
- Sets the rate filing requirement and regulator response requirement to the open enrollment period for individual health benefit plans offered outside of Covered California.
Comments
- Author’s statement. According to the author, enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expanded access to quality and affordable health insurance by providing subsidies to eligible individuals and the creation of health benefit exchanges where individuals can shop and choose from different health plans. Current state law provides for an annual enrollment period for on and off exchange individual market plans from November 1, of the preceding calendar year, to January 31 of the benefit year, for plan years that started January 2016. A recently finalized federal market stability rule aimed to establish a uniform annual open enrollment period from November 1 through December 15 for plan years beginning January 2019. Though, federal guidance authorizes states to supplement this open enrollment period.
This bill brings California law into compliance with the federal market stabilization rule and also maintains our current three month long annual open enrollment period. This consistency will help to boost enrollment in the individual market, hopefully among healthy enrollees, which will improve the market risk mix and keep overall premiums down. Alternatively, a shorter open enrollment period ending in mid-December will raise concerns related to consumer financial burden during the holidays. It would also limit consumers’ ability and time to shop, compare, and select a health plan that fit their health care needs. A shorter open enrollment period will lower enrollment, as individuals and families balance making important health care and financial decisions during a shortened time period and during the holidays.
- Open enrollment periods. On April 13, 2017, the federal Department of Health and Human Services released final rules requiring health benefit exchanges to provide for the individual health insurance market an annual open enrollment period, for policy years beginning on or after January 1, 2018, to begin on November 1 and end on December 15 of the preceding calendar year. The federal rules provide states flexibility to create additional special enrollment periods for the 2018 policy year to supplement the open enrollment period. For the 2018 plan year, Covered California will establish special enrollment periods to supplement the open enrollment period in order to meet the requirements of current state law which requires the enrollment period to span November 1 to January 31.
Additionally, existing federal rules grant ongoing authority for states to establish special enrollment periods that are in addition to the special enrollment periods outlined in federal law and regulation as long as they are more consumer protective than the other special enrollment periods. Under this ongoing authority, this bill establishes special enrollment periods in addition to the required open enrollment period prescribed by federal rules which would allow the total enrollment period to span October 15 to January 15 for policy years 2019 and beyond.
Below is a table outlining the enrollment period and dates of coverage effectiveness for Covered California enrollees as proposed by this bill:
Enrollment Period Type | Enrollment Window for all Consumers | Effective Date of Coverage for the Consumer |
Special Enrollment | October 15, 2018 to October 31, 2018 | January 1, 2019 |
Open Enrollment | November 1, 2018 to December 15, 2018 | January 1, 2019 |
Special Enrollment | December 16, 2018 to January 15, 2019 | No Later Than February 1, 2019 |
With regard to enrollment in the individual market outside of Covered California, this bill establishes the annual open enrollment period as October 15 to January 15, to be consistent with the Covered California market. However, because the federal open enrollment period applies specifically to health benefit exchanges, the requirements regarding special enrollment periods are not applied to the market outside of Covered California. Consistent with the federal rules, the market outside of Covered California requires a health plan or insurer in the individual market to allow an individual to purchase health insurance coverage during the same annual open enrollment period required of Covered California. The net effect of this bill is that individuals will be able to enroll in individual market coverage either through Covered California or outside of Covered California for a 90-day period that begins on October 15 of the preceding year through January 15 of the benefit year.
- Reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014.
Related/Prior Legislation
SB 134 (Hernandez, 2017) contains similar provisions to this bill related to the reinsurance issue for health plans that operate in the small group market. AB 157 (Wood, 2017) contains similar provisions to SB 134 that apply to the Insurance Code.
SB 125 (Hernandez, Chapter 9, Statutes of 2015) 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. The bill also conformed 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, and extended the sunset date of the California Health Benefit Review Program to June 30, 2017 and made changes to its analyses and timelines. Extended the fee assessed on health plans and insurers for this purpose until fiscal year 2016-17.
SB X1 2 (Hernandez, Chapter 2, Statutes of 2013) and AB X1 2 (Pan, Chapter 1, Statues of 2013) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
SB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increase the geographic rating regions to 19 and require no later than June 1, 2017, DMHC in collaboration with the Exchange and the CDI to review the geographic rating regions and submit a report to the appropriate policy committees.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Alzheimer’s Greater Los Angeles
APLA Health
California Health Professional Student Alliance
California Immigrant Policy Center
California Pan-Ethnic Health Network
California Physicians Alliance
California Public Health Association-North
California School Employees Association
Children Now
Consumers Union
Health Access California
Jewish Family Service of Los Angeles
Justice in Aging
LifeLong Medical Care
National Health Law Program
NICOS Chinese Health Coalition Support
Project Inform
Public Health Advocates
St. Louise Resource Services
Service Employees International Union
Small Business Majority
Voices for Progress Education Fund
Western Center on Law and Poverty
None received
ARGUMENTS IN SUPPORT: Health Access California writes this bill helps consumers by preserving our current three-month annual open enrollment period beginning 2019 by establishing October 15 to January 15 as the annual open enrollment period. According to Health Access, this bill shifts the start date of annual open enrollment period earlier, while at the same time ensures there is time after the holidays to sign up for coverage until January 15, additionally, this bill will provide consumers with adequate time to shop and compare health plans and sign up for coverage while maintaining a healthy risk mix in Covered California— and let them do it when they are not in the midst of the holidays. The Western Center on Law and Poverty adds that maintaining the annual enrollment period through the first couple of weeks of January allows those consumers who were passively renewed into a Covered California plan to make changes once they get their first bill and see the difference in premiums that they will be paying in the next year.
ASSEMBLY FLOOR: 76-0, 5/4/17
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Bigelow, Cristina Garcia, Patterson
9/5/17 17:40:53
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 156
AUTHOR: | Wood | ||
VERSION: | August 31, 2017 | ||
HEARING DATE: | September 5, 2017 | ||
CONSULTANT: | Teri Boughton | ||
SUBJECT: Individual market: enrollment periods
SUMMARY:
Deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual and small group health insurance policy single risk pool index rate adjustments, and revises for 2019 and after the open enrollment periods under which people may purchase health insurance through Covered California and the individual insurance market outside of Covered California.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things requires a health insurance issuer to consider the claims experience of all enrollees in all health insurance policies (other than grandfathered health plans), as specified, offered by such issuer in the individual market in a state, including those insureds who do not enroll in such plans through a health benefit exchange, to be members of a single risk pool.
- Establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) under the Health and Safety Code and the California Department of Insurance (CDI) to regulate health insurers under the Insurance Code.
- Requires a health insurer to consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all non-grandfathered individual health benefit plans offered by that health insurer in this state, whether offered as a health insurance policy, or individual health plan, including those insureds and enrollees who enroll in individual coverage through California’s health benefit exchange (known as Covered California) and insureds and enrollees who enroll in individual coverage outside of Covered California.
- Requires each year, a health insurance carrier to 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, within the single risk pool.
- Requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to specified sections of the ACA, and Covered California user fees, as described in federal regulations.
- Sets the annual enrollment period for individual market health insurance plans, whether operating inside or outside of Covered California 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.
- Establishes special enrollment triggering events under which an individual may enroll in or change plans during a time that is not the annual enrollment period.
- Requires health plans and insurers to file premium rate information to regulators 100 days in advance of the open enrollment period and regulators to determine if the rates are reasonable or not no later than 15 days before the open enrollment period.
This bill:
- Deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual and small group health plans with regard to the single risk pool index rate.
- Sets the open enrollment period for policy years beginning on or after January 1, 2019 outside of Covered California at October 15 to January 15; and inside Covered California at November 1, to December 15 of the preceding calendar year.
- Establishes new special enrollment periods with respect to individual health benefit plans offered through Covered California for policy years beginning on or after January 1, 2019, from October 15 to October 31 of the preceding calendar year and from December 16 of the preceding calendar year, to January 15 of the benefit year.
- Sets the rate filing requirement and regulator response requirement to the open enrollment period for individual health benefit plans offered outside of Covered California.
FISCAL EFFECT:
No significant state cost anticipated.
PRIOR VOTES:
Assembly Floor: | 76 - 0 |
Assembly Health Committee: | 15 - 0 |
|
|
COMMENTS:
- Author’s statement. According to the author, enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expanded access to quality and affordable health insurance by providing subsidies to eligible individuals and the creation of health benefit exchanges where individuals can shop and choose from different health plans. Current state law provides for an annual enrollment period for on and off exchange individual market plans from November 1, of the preceding calendar year, to January 31 of the benefit year, for plan years that started January 2016. A recently finalized federal market stability rule aimed to establish a uniform annual open enrollment period from November 1 through December 15 for plan years beginning January 2019. Though, federal guidance authorizes states to supplement this open enrollment period.
This bill would bring California law into compliance with the federal market stabilization rule and also maintain our current three month long annual open enrollment period. This consistency will help to boost enrollment in the individual market, hopefully among healthy enrollees, which will improve the market risk mix and keep overall premiums down. Alternatively, a shorter open enrollment period ending in mid-December will raise concerns related to consumer financial burden during the holidays. It would also limit consumers’ ability and time to shop, compare, and select a health plan that fit their health care needs. A shorter open enrollment period will lower enrollment, as individuals and families balance making important health care and financial decisions during a shortened time period and during the holidays.
- Background on open enrollment periods. On April 13, 2017, the federal Department of Health and Human Services released final rules requiring health benefit exchanges to provide for the individual health insurance market an annual open enrollment period, for policy years beginning on or after January 1, 2018, to begin on November 1 and end on December 15 of the preceding calendar year. The federal rules provide states flexibility to create additional special enrollment periods for the 2018 policy year to supplement the open enrollment period. For the 2018 plan year, Covered California will establish special enrollment periods to supplement the open enrollment period in order to meet the requirements of current state law which requires the enrollment period to span November 1 to January 31.
Additionally, existing federal rules grant ongoing authority for states to establish special enrollment periods that are in addition to the special enrollment periods outlined in federal law and regulation as long as they are more consumer protective than the other special enrollment periods. Under this ongoing authority, this bill establishes special enrollment periods in addition to the required open enrollment period prescribed by federal rules which would allow the total enrollment period to span October 15 to January 15 for policy years 2019 and beyond.
Below is a table outlining the enrollment period and dates of coverage effectiveness for Covered California enrollees as proposed by this bill:
Enrollment Period Type | Enrollment Window for all Consumers | Effective Date of Coverage for the Consumer |
Special Enrollment | October 15, 2018 to October 31, 2018 | January 1, 2019 |
Open Enrollment | November 1, 2018 to December 15, 2018 | January 1, 2019 |
Special Enrollment | December 16, 2018 to January 15, 2019 | No Later Than February 1, 2019 |
With regard to enrollment in the individual market outside of Covered California, this bill establishes the annual open enrollment period as October 15 to January 15, to be consistent with the Covered California market. However, because the federal open enrollment period applies specifically to health benefit exchanges, the requirements regarding special enrollment periods are not applied to the market outside of Covered California. Consistent with the federal rules, the market outside of Covered California requires a health plan or insurer in the individual market to allow an individual to purchase health insurance coverage during the same annual open enrollment period required of Covered California. The net effect of this bill is that individuals will be able to enroll in individual market coverage either through Covered California or outside of Covered California for a 90-day period that begins on October 15 of the preceding year through January 15 of the benefit year.
- Background on the reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014. The table below describes the three programs.
Program: | Reinsurance | Risk Corridors | Risk Adjustment |
Purpose: | Provides funding to issuers that incur high claims costs for enrollees | Limits issuer losses (and gains) | Transfers funds from lower risk plans to higher risk plans |
Participants: | All issuers and third party administrators on behalf of group health plans contribute funding; non-grandfathered individual market plans (inside and outside the Exchange) are eligible for payments | Qualified health plans | Non-grandfathered individual and small group market plans, inside and outside the Exchange |
Time Frame: | 3 years (2014-2016) | 3 years (2014-2016) | Permanent |
- Related legislation. SB 134 contains similar provisions to this bill that apply to health plans that operate in the small group market. AB 157 (Wood) contains similar provisions to SB 134 that apply to the Insurance Code.
- Prior legislation. SB 125 (Hernandez, Chapter 9, Statutes of 2015) 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. The bill also 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, and extends the sunset date of the California Health Benefit Review Program 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.
SB X1 2 (Hernandez, Chapter 2, Statutes of 2013) and AB X1 2 (Pan, Chapter 1, Statues of 2013) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
SB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increase the geographic rating regions to 19 and require no later than June 1, 2017, DMHC in collaboration with the Exchange and the CDI to review the geographic rating regions and submit a report to the appropriate policy committees.
- Support. Health Access California writes this bill helps consumers by preserving our current 3-month annual open enrollment period beginning 2019 by establishing October 15 to January 15 as the annual open enrollment period. According to Health Access this bill shifts the start date of annual open enrollment period earlier, while at the same time ensures there is time after the holidays to sign up for coverage until January 15, additionally, this bill will provide consumers with adequate time to shop and compare health plans and sign up for coverage while maintaining a healthy risk mix in Covered California— and let them do it when they are not in the midst of the holidays. The Western Center on Law and Poverty adds that maintaining the annual enrollment period through the first couple of weeks of January allows those consumers who were passively renewed into a Covered California plan to make changes once they get their first bill and see the difference in premiums that they will be paying in the next year.
SUPPORT AND OPPOSITION:
Support: Health Access California (sponsor)
Alzheimer’s Greater Los Angeles
California Health Professional Student Alliance
California Immigrant Policy Center
California Physicians Alliance
California Public Health Association-North
California School Employees Association
Children Now
Justice in Aging
NICOS Chinese Health Coalition Support
Project Inform
St. Louise Resource Services
Small Business Majority
Voices for Progress Education Fund
Western Center on Law and Poverty
Oppose: None received
-- END --
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 156
:
SENATE HEALTH COMMITTEE: 8-0, 7/19/17
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Roth
NO VOTE RECORDED: Nielsen
ASSEMBLY FLOOR: 76-0, 5/4/17 (Consent) - See last page for vote
DIGEST:
This bill deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual health insurance policy single risk pool index rate adjustments.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things requires a health insurance issuer to consider the claims experience of all enrollees in all health insurance policies (other than grandfathered health plans), as specified, offered by such issuer in the individual market in a state, including those insureds who do not enroll in such plans through a health benefit exchange, to be members of a single risk pool.
- Establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care to regulate health care service plans (health plans) under the Health and Safety Code and the California Department of Insurance to regulate health insurers under the Insurance Code.
- Requires a health insurer to consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all non-grandfathered individual health benefit plans offered by that health insurer in this state, whether offered as a health insurance policy, or individual health plan, including those insureds and enrollees who enroll in individual coverage through California’s Health Benefit Exchange (known as Covered California) and insureds and enrollees who enroll in individual coverage outside of Covered California.
- Requires each year, a health insurance carrier to 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, within the single risk pool.
- Requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance programs established for the state pursuant to specified sections of the ACA, and Covered California user fees, as described in federal regulations.
This bill deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual health plans with regard to the single risk pool index rate.
Comments
- Author’s statement. According to the author, this bill deletes references to reinsurance in the individual market provisions of the Insurance Code to be consistent with federal law. Reinsurance was designed to help keep rates down during the first three years of the Health Benefit Exchanges to stabilize the market and attract more consumers to build a healthy risk mix. The temporary program was in place from 2014 through 2016.
- Implementation of the ACA. California law makers passed at least 50 laws to harmonize California law with the ACA. Prior to the enactment of the major ACA coverage expansions, over 40 million Americans (including 7 million Californians) were uninsured. The percentage of Californians under age 65 without insurance has fallen to 7.1% in 2016. California has a history of strong consumer protections in its health insurance market; enacting some reforms even before the ACA required them. The Republican Congressional leadership and President Donald Trump have called for a “repeal and replace” of the ACA. The President has issued an Executive Order to direct his administration to reduce regulatory burdens on the health insurance industry and others. Federal legislation has been introduced which would substantially roll back gains made in California. The federal Department of Health and Human Services has also promulgated regulations to make changes in the health insurance market rules. Since California has been described as one of the more successful states in terms of implementation of the ACA, it is important for Legislature to critically evaluate federal policy changes prior to adoption in order to ensure those changes do not negatively affect the progress that has been made in California.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Health Access California
OPPOSITION: (Verified 7/20/17)
None received
ARGUMENTS IN SUPPORT: Health Access California writes that the reinsurance program was a temporary program that helped to stabilize premiums in the individual market during the initial years of ACA implementation by providing payments to health plans that enroll higher-cost individuals. The program was created to protect against overall premium increases by offsetting the expenses of high-cost consumers entering the individual market. Since the reinsurance program has expired, it is appropriate to eliminate reference to the program in state law.
ASSEMBLY FLOOR: 76-0, 5/4/17
AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Travis Allen, Bigelow, Cristina Garcia, Patterson
8/17/17 11:22:07
**** END ****
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 156
AUTHOR: | Wood | ||
VERSION: | January 12, 2017 | ||
HEARING DATE: | July 19, 2017 | ||
CONSULTANT: | Teri Boughton | ||
SUBJECT: Individual market: single risk pool: index rate
SUMMARY:
Deletes a reference in existing law to the Affordable Care Act reinsurance program related to individual health insurance policy single risk pool index rate adjustments.
Existing law:
- Establishes, under federal law, the Affordable Care Act (ACA), which among other things requires a health insurance issuer to consider the claims experience of all enrollees in all health insurance policies (other than grandfathered health plans), as specified, offered by such issuer in the individual market in a state, including those insureds who do not enroll in such plans through a health benefit exchange, to be members of a single risk pool.
- Establishes, under the ACA, a temporary reinsurance program where reinsurance contributions collected from insurers and third party administrators over three years can be allocated to cover the costs of reinsurance for any of the three years and funds left over can be used to make payments for reinsurance programs for the two years following 2017.
- Establishes the Department of Managed Health Care (DMHC) to regulate health care service plans (health plans) under the Health and Safety Code and the California Department of Insurance (CDI) to regulate health insurers under the Insurance Code.
- Requires a health insurer to consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all non-grandfathered individual health benefit plans offered by that health insurer in this state, whether offered as a health insurance policy, or individual health plan, including those insureds and enrollees who enroll in individual coverage through California’s health benefit exchange (known as Covered California) and insureds and enrollees who enroll in individual coverage outside of Covered California.
- Requires each year, a health insurance carrier to 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, within the single risk pool.
- Requires the index rate to 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 specified sections of the ACA, and Covered California user fees, as described in federal regulations.
This bill: Deletes a reference to the federal reinsurance program in existing law that establishes requirements on individual health plans with regard to the single risk pool index rate.
FISCAL EFFECT:
This bill is keyed nonfiscal.
PRIOR VOTES:
Assembly Floor: | 76 - 0 |
Assembly Health Committee: | 15 - 0 |
|
|
COMMENTS:
- Author’s statement. According to the author, this bill deletes references to reinsurance in the individual market provisions of the Insurance Code to be consistent with federal law. Reinsurance was designed to help keep rates down during the first three years of the Health Benefit Exchanges to stabilize the market and attract more consumers to build a healthy risk mix. The temporary program was in place from 2014 through 2016.
- Background on the reinsurance program. The ACA established state-based reinsurance and risk adjustment programs and a federal risk corridors program. The overall goal of these programs was to provide certainty and protect against adverse selection in the market while stabilizing premiums in the individual and small group markets as the ACA market reforms began in 2014. The table below describes the three programs.
Program: | Reinsurance | Risk Corridors | Risk Adjustment |
Purpose: | Provides funding to issuers that incur high claims costs for enrollees | Limits issuer losses (and gains) | Transfers funds from lower risk plans to higher risk plans |
Participants: | All issuers and third party administrators on behalf of group health plans contribute funding; non-grandfathered individual market plans (inside and outside the Exchange) are eligible for payments | Qualified health plans | Non-grandfathered individual and small group market plans, inside and outside the Exchange |
Time Frame: | 3 years (2014-2016) | 3 years (2014-2016) | Permanent |
- Implementation of the ACA. California law makers passed at least 50 laws to harmonize California law with the ACA. Prior to the enactment of the major ACA coverage expansions, over 40 million Americans (including 7 million Californians) were uninsured. The percentage of Californians under age 65 without insurance has fallen to 7.1% in 2016. California has a history of strong consumer protections in its health insurance market; enacting some reforms even before the ACA required them. The Republican Congressional leadership and President Donald Trump have called for a “repeal and replace” of the ACA. The President has issued an Executive Order to direct his administration to reduce regulatory burdens on the health insurance industry and others. Federal legislation has been introduced which would substantially roll back gains made in California. The federal Department of Health and Human Services has also promulgated regulations to make changes in the health insurance market rules. Since California has been described as one of the more successful states in terms of implementation of the ACA, it is important for Legislature to critically evaluate federal policy changes prior to adoption in order to ensure those changes do not negatively affect the progress that has been made in California.
- Related legislation. SB 133 (Hernandez) contains similar provisions to this bill that apply to the Health and Safety Code.
SB 134 contains similar provisions to this bill that apply to health plans that operate in the small group market. AB 157 (Wood) contains similar provisions to SB 134 that apply to the Insurance Code.
- Prior legislation. SB X1 2 (Hernandez, Chapter 2, Statutes of 2013) and AB X1 2 (Pan, Chapter 1, Statues of 2013) established the rules for California’s individual market including requirements for a single risk pool of claims experience for rating purposes, and a requirement that each calendar year a plan establish an index rate for the individual market based on the total claims costs for providing essential health benefits, as defined. The law requires the index rate to be adjusted on a market wide basis based on the total expected market wide payments and charges under the risk adjustment and reinsurance program. Other permitted adjustments to the index rate are identified in the statute as well.
SB 1083 (Monning, Chapter 852, Statutes of 2012) made conforming and other changes to state law governing the sale of small group health insurance products to implement provisions in the ACA, including deleting December to January contract rate dates and instead requiring rates to be in effect no less than 12 months from the date of issuance or renewal, prohibiting a health plan or insurer form acquiring or requesting information that relates to a health status-related factor from the applicant or his or her dependent or any other source prior to enrollment, adding provisions which tie the guaranteed issue and rating provisions to those provision in federal law and reinstating existing law is certain provisions of the ACA are repealed, deferring the requirements on age bands and family size to the United States Secretary of Health and Human Services, increase the geographic rating regions to 19 and require no later than June 1, 2017, DMHC in collaboration with the Exchange and the CDI to review the geographic rating regions and submit a report to the appropriate policy committees.
- Support. Health Access California writes that the reinsurance program was a temporary program that helped to stabilize premiums in the individual market during the initial years of ACA implementation by providing payments to health plans that enroll higher-cost individuals. The program was created to protect against overall premium increases by offsetting the expenses of high-cost consumers entering the individual market. Since the reinsurance program has expired, it is appropriate to eliminate reference to the program in state law.
SUPPORT AND OPPOSITION:
Support: Health Access California
Oppose: None received
-- END --
Date of Hearing: April 25, 2017
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
ABPCA Bill Id:AB 156
Author:(Wood) – As Introduced Ver:January 12, 2017
SUBJECT: Individual market: single risk pool: index rate.
SUMMARY: Deletes references to the federal transitional reinsurance program in the individual market for purposes of health insurers.
EXISTING LAW:
- Establishes the federal Patient Protection and Affordable Care Act (ACA), which enacts various health care coverage market reforms including the guaranteed availability of insurance and various premium stabilization programs, such as the transitional reinsurance program and the risk adjustment program, to stabilize premiums inside and outside of the health benefit exchanges.
- Establishes in state government, the California Health Benefits Exchange, referred to as Covered California, as an independent public entity not affiliated with an agency or department, and requires Covered California to compare and make available through selective contracting health insurance for individuals and small business purchasers as authorized under the ACA.
- Provides for the regulation of health insurers by the California Department of Insurance (CDI) under the Insurance Code.
- Requires a health insurer, on and after October 1, 2013, to fairly and affirmatively offer, market, and sell all of the insurer’s health benefit plans 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.
FISCAL EFFECT: None
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, this bill deletes references to reinsurance in the individual market provisions of the Insurance Code to be consistent with federal law. Reinsurance was designed to help keep rates down during the first three years of the health benefit exchanges to stabilize the market and attract more consumers to build a healthy risk mix. The temporary program was in place from 2014 through 2016.
- BACKGROUND. Enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expands access to quality, affordable insurance and health care. As of January 1, 2014, insurers are no longer able to deny coverage or charge higher premiums based on preexisting conditions (under rules referred to as guaranteed issue and modified community rating, respectively). These aspects of the ACA, along with tax credits for low and middle income people buying insurance on their own in new health benefit exchanges, make it easier for people with preexisting conditions to gain insurance coverage. However, if not accompanied by other regulatory measures, these provisions could have unintended consequences for the insurance market. For example, insurers may try to compete by avoiding sicker enrollees rather than by providing the best value to consumers. In addition, in the early years of market reform, insurers faced uncertainty as to how to price coverage as new people gained coverage, potentially leading to premium volatility. To discourage behavior that could lead to adverse selection, the ACA makes it difficult for people to wait until they are sick to purchase insurance (i.e. by limiting open enrollment periods, requiring most people to have insurance coverage or pay a penalty, and providing subsidies to help with the cost of insurance). Three provisions of the ACA: a) risk adjustment (redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees by protecting against adverse selection and risk selection in the individual and small group markets, inside and outside the exchanges by spreading financial risk across the markets); b) reinsurance (see discussion below); and, c) risk corridors (limits losses and gains beyond an allowable range by stabilizing premiums and protects against inaccurate premium setting during initial years of the reform), were intended to promote insurer competition on the basis of quality and value and promote insurance market stability, particularly in the early years of reform.
The ACA established a transitional reinsurance program to stabilize premiums inside and outside of the health benefit exchanges. The transitional reinsurance program will collect contributions from contributing entities to fund reinsurance payments to issuers of eligible market plans, the administrative costs of operating the reinsurance program, and the General Fund of the U.S. Treasury for the 2014, 2015, and 2016 benefit years. The program transfers funds to individual market insurance plans with higher-cost enrollees in order to reduce the incentive for insurers to charge higher premiums due to new market reforms that guarantee the availability of coverage regardless of health status.
Reinsurance is meant to stabilize premiums by reducing the incentive for insurers to charge higher premiums due to concerns about higher-risk people enrolling early in the program, whereas risk adjustment is meant to stabilize premiums by mitigating the effects of risk selection across plans. Thus, reinsurance payments are only made to individual market plans that are subject to new market rules (e.g., guaranteed issue), whereas risk adjustment payments are made to both individual and small group plans. Additionally, reinsurance payments are based on actual costs, whereas risk adjustment payments are based on expected costs. As reinsurance is based on actual rather than predicted costs, reinsurance payments will also account for low-risk individuals who may have unexpectedly high costs (such as costs incurred due to an accident or sudden onset of an illness). Under reinsurance, some plans may receive payments for high-cost/high-risk enrollees, and still be eligible for payment for those enrollees under risk adjustment.
To cover the costs of reinsurance payments and administering the program, funds are collected from all health insurance issuers and third party administrators (including those in the individual and group markets). The U.S. Department of Health and Human Services issues reinsurance payments to plans based on need, rather than issuing payments proportional to the amount of contributions from each state.
- SUPPORT. Health Access California states that since the reinsurance program has expired, it is appropriate to eliminate reference to the program in state law.
- RELATED LEGISLATION.
- AB 157 (Wood) deletes references to the federal transitional reinsurance program in the small group market and will be heard in the Assembly Health Committee on April 25, 2017.
- SB 133 (Hernandez) deletes references to the federal transitional reinsurance program in the individual market and will be heard in the Senate Health Committee on April 26, 2017.
- SB 134 (Hernandez) deletes references to the federal transitional reinsurance program in the small group market and will be heard in the Senate Health Committee on April 26, 2017.
- PREVIOUS LEGISLATION.
- AB 1602 (John A Pérez), Chapter 655, Statutes of 2010, and SB 900 (Alquist), Chapter 659, Statutes of 2010, established the California’s Health Benefit Exchange and its powers and duties.
- ABX1 2 (Pan), Chapter 1, Statutes of 2013-14 First Extraordinary Session and SBX1 2 (Hernandez), Chapter 2, Statutes of 2013-14 First Extraordinary Session, established the health insurance market reforms contained in the ACA specific to individual purchasers, such as prohibiting insurers from denying coverage based on preexisting conditions; and, make conforming changes to small employer health insurance laws resulting from final federal regulations.
- SB 961 (Hernandez) and AB 1461 (Monning) of 2012 were identical bills that would have reformed California’s individual market similar to the provisions in SBX1 2. SB 961 and AB 1461 were vetoed by Governor Brown who indicated that without the strong foundation that federal law provides, a state-level mandate on insurers alone could encourage healthy people to wait until they got sick or injured before purchasing coverage and would lead to skyrocketing premiums, making coverage more unaffordable.
REGISTERED SUPPORT / OPPOSITION:
Support
Health Access California
Opposition
None on file.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097
Discussed in Hearing
1MIN
Assembly Floor
2MIN
Senate Floor
10MIN
Senate Standing Committee on Health
2MIN
Senate Standing Committee on Health
Bill Author
Bill Co-Author(s):