SB 910: Short-term limited duration health insurance.
- Session Year: 2017-2018
- House: Senate
- Latest Version Date: 2018-09-22
Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits a health insurer offering individual health insurance coverage from imposing any preexisting condition exclusion with respect to that coverage. Existing law prohibits a health insurer from conditioning the issuance or offering of individual health benefit plans on any health status-related factor, as specified, and authorizes health insurers to use only age, geographic region, and whether the plan or health insurer covers an individual or family for purposes of establishing rates for individual health benefit plans, as specified. Existing law requires an individual health insurance policy to include, at a minimum, coverage for essential health benefits, as defined. These health care coverage market reforms in the individual market do not apply to short-term limited duration health insurance policies offered by a health insurer.
This bill, commencing January 1, 2019, would prohibit a health insurer from issuing, selling, renewing, or offering a short-term limited duration health insurance policy, as defined, for health care coverage in this state. The bill would make conforming changes.
Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits a health insurer offering individual health insurance coverage from imposing any preexisting condition exclusion with respect to that coverage. Existing law prohibits a health insurer from conditioning the issuance or offering of individual health benefit plans on any health status-related factor, as specified, and authorizes health insurers to use only age, geographic region, and whether the plan or health insurer covers an individual or family for purposes of establishing rates for individual health benefit plans, as specified. Existing law requires an individual health insurance policy to include, at a minimum, coverage for essential health benefits, as defined. These health care coverage market reforms in the individual market do not apply to short-term limited duration health insurance policies offered by a health insurer.
This bill, commencing January 1, 2019, would prohibit a health insurer from issuing, selling, renewing, or offering a short-term limited duration health insurance policy, as defined, for health care coverage in this state. The bill would make conforming changes.
Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits a health insurer offering individual health insurance coverage from imposing any preexisting condition exclusion with respect to that coverage. Existing law prohibits a health insurer from conditioning the issuance or offering of individual health benefit plans on any health status-related factor, as specified, and authorizes health insurers to use only age, geographic region, and whether the plan or health insurer covers an individual or family for purposes of establishing rates for individual health benefit plans, as specified. Existing law requires an individual health care service health insurance policy to include, at a minimum, coverage for essential health benefits, as defined. These health care coverage market reforms in the individual market do not apply to short-term limited duration health insurance policies offered by a health insurer.
This bill, commencing January 1, 2019, would prohibit a health insurer from issuing, selling, renewing, or offering a short-term limited duration health insurance policy, as defined, for health care coverage in this state. The bill would make conforming changes.
Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits a health insurer offering individual health insurance coverage from imposing any preexisting condition exclusion with respect to that coverage. Existing law prohibits a health insurer from conditioning the issuance or offering of individual health benefit plans on any health status-related factor, as specified, and authorizes health insurers to use only age, geographic region, and whether the plan or health insurer covers an individual or family for purposes of establishing rates for individual health benefit plans, as specified. Existing law requires an individual health care service health insurance policy to include, at a minimum, coverage for essential health benefits, as defined. These health care coverage market reforms in the individual market do not apply to short-term limited duration health insurance policies offered by a health insurer.
This bill, commencing January 1, 2019, would prohibit a health insurer from issuing, selling, renewing, or offering a short-term limited duration health insurance policy, as defined, for health care coverage in this state. The bill would make conforming changes.
Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits a health insurer offering individual health insurance coverage from imposing any preexisting condition exclusion with respect to that coverage. Existing law prohibits a health insurer from conditioning the issuance or offering of individual health benefit plans on any health status-related factor, as specified, and authorizes health insurers to use only age, geographic region, and whether the plan or health insurer covers an individual or family for purposes of establishing rates for individual health benefit plans, as specified. Existing law requires an individual health care service health insurance policy to include, at a minimum, coverage for essential health benefits, as defined. These health care coverage market reforms in the individual market do not apply to short-term limited duration health insurance policies offered by a health insurer.
This bill, commencing January 1, 2019, would prohibit a health insurer from issuing, selling, renewing, or offering a short-term limited duration health insurance policy, as defined, for health care coverage in this state.
(a)On and after July 1, 2011, in accordance with subdivision (b), a health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall issue an identification card to an enrollee in order to assist the enrollee with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health care service plan issuing the identification card.
(2)The enrollees identification number.
(3)A telephone number that enrollees or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and if assessment services are provided by the health care service plan, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health care service plans Internet Web site address.
(b)The identification card required by this section shall be issued by a health care service plan or a specialized health care service plan to an enrollee upon enrollment or upon a change in the enrollees coverage that impacts the data content or format of the card.
(c)This section does not require a health care service plan to issue a separate identification card for professional mental health services coverage if the plan issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health care service plan or a specialized health care service plan, as described in subdivision (a), delegates responsibility for issuing the identification card to a contractor or an agent, the contractor or agent shall be required to comply with this section.
(e)This section does not prohibit a health care service plan or a specialized health care service plan from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health care service plan shall be deemed compliant with this section if the plan conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only plan that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 10123.198 of the Insurance Code.
SEC. 2.Section 1368.016 of the Health and Safety Code is amended to read:1368.016.(a)A health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall, pursuant to subdivision (f) of Section 1368.015, include on its Internet Web site, or provide a link to, the following information:
(1)A telephone number that the enrollee or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 1367.205, or instructions on how to obtain the formulary, as described in Section 1367.20.
(3)A detailed summary that describes the process by which the plan reviews and authorizes or approves, modifies, or denies requests for health care services as described in Sections 1363.5 and 1367.01.
(4)Lists of providers or instructions on how to obtain the provider list, as required by Section 1367.27.
(5)A detailed summary of the enrollee grievance process as described in Sections 1368 and 1368.015.
(6)A detailed description of how an enrollee may request continuity of care pursuant to subdivisions (a) and (b) of Section 1373.95.
(7)Information concerning the right, and applicable procedure, of an enrollee to request an independent medical review pursuant to Section 1374.30.
(b)Any modified material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to enrollees.
(d)The material described in subdivision (a) shall also be made available to enrollees in hard copy upon request.
(e)This article does not preclude a health care service plan from including additional information on its Internet Web site for applicants, enrollees or subscribers, or providers, including, but not limited to, the cost of procedures or services by health care providers in a plans network.
(f)The department shall include on the departments Internet Web site a link to the Internet Web site of each health care service plan and specialized health care service plan described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(h)This section shall not apply to a health care service plan that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its enrollees, provided that the health care service plan provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 10123.199 of the Insurance Code.
SEC. 3.Section 10113.9 of the Insurance Code is amended to read:10113.9.(a)This section shall not apply to vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(b)(1)A change in the premium rate or coverage for an individual health insurance policy shall not become effective unless the insurer has provided a written notice of the change at least 10 days before the start of the annual enrollment period applicable to the policy or 60 days before the effective date of the policy renewal, whichever occurs earlier in the calendar year.
(2)The written notice required pursuant to paragraph (1) shall be provided to the individual policyholder at his or her last address known to the insurer. The notice shall state in italics and in 12-point type the actual dollar amount of the premium increase and the specific percentage by which the current premium will be increased. The notice shall describe in plain, understandable English any changes in the policy or any changes in benefits, including a reduction in benefits or changes to waivers, exclusions, or conditions, and highlight this information by printing it in italics. The notice shall specify in a minimum of 10-point bold typeface, the reason for a premium rate change or a change in coverage or benefits.
(c)(1)If the department determines that a rate is unreasonable or not justified consistent with Article 4.5 (commencing with Section 10181), the insurer shall notify the policyholder of this determination. This notification may be included in the notice required in subdivision (b). The notification to the policyholder shall be developed by the department. The development of the notification required under this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(2)The notification to the policyholder shall include the following statements in 14-point type:
(A)The Department of Insurance has determined that the rate for this product is unreasonable or not justified after reviewing information submitted to it by the insurer.
(B)During the open enrollment period, the policyholder has the option to obtain other coverage from this insurer or another insurer, or to keep this coverage.
(C)The policyholder may want to contact Covered California at www.coveredca.com for help in understanding available options.
(D)Many Californians are eligible for financial assistance from Covered California to help pay for coverage.
(3)The insurer may include in the notification to the policyholder the Internet Web site address at which the insurers final justification for implementing an increase that has been determined to be unreasonable by the commissioner may be found pursuant to Section 154.230 of Title 45 of the Code of Federal Regulations.
(4)The notice shall also be provided to the agent of record for the policyholder, if any, so that the agent may assist the purchaser in finding other coverage.
(5)In developing the notification, the department shall take into consideration that this notice is required to be provided to an individual applicant pursuant to subdivision (g) of Section 10181.3.
(d)If an insurer rejects a dependent of a policyholder applying to be added to the policyholders individual grandfathered health plan, rejects an applicant for a Medicare supplement policy due to the applicant having end-stage renal disease, or offers an individual grandfathered health plan to an applicant at a rate that is higher than the standard rate, the insurer shall inform the applicant about the California Major Risk Medical Insurance Program (MRMIP) (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code) and about the new coverage options and the potential for subsidized coverage through Covered California. The insurer shall direct persons seeking more information to MRMIP, Covered California, plan or policy representatives, insurance agents, or an entity paid by Covered California to assist with health coverage enrollment, such as a navigator or an assister.
(e)A notice provided pursuant to this section is a private and confidential communication and, at the time of application, the insurer shall give the applicant the opportunity to designate the address for receipt of the written notice in order to protect the confidentiality of personal or privileged information.
(f)For purposes of this section, the following definitions shall apply:
(1)Covered California means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code.
(2)Grandfathered health plan has the same meaning as that term is defined in Section 1251 of PPACA.
(3)PPACA means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and rules, regulations, or guidance issued pursuant to that law.
SEC. 4.Section 10123.61 is added to the Insurance Code, to read:10123.61.(a)Commencing January 1, 2019, a health insurer shall not issue, amend, sell, renew, or offer a policy of short-term limited duration health insurance in this state.
(b)For purposes of this section, short-term limited duration health insurance means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage.
SEC. 5.Section 10123.7 of the Insurance Code is amended to read:10123.7.(a)On or after January 1, 1986, an insurer issuing group health insurance shall offer coverage for orthotic and prosthetic devices and services under the terms and conditions that may be agreed upon between the group policyholder and the insurer. An insurer shall communicate the availability of that coverage to all group policyholders and to all prospective group policyholders with whom the insurer is negotiating. Coverage for prosthetic devices shall include original and replacement devices, as prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license. Coverage for orthotic devices shall provide for coverage if the device, including original and replacement devices, is prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license, or is ordered by a licensed health care provider acting within the scope of his or her license. An insurer shall have the right to conduct a utilization review to determine medical necessity before authorizing these services.
(b)Notwithstanding subdivision (a), on and after July 1, 2007, the amount of the benefit for orthotic and prosthetic devices and services shall be no less than the annual and lifetime benefit maximums applicable to all benefits in the policy. A copayment, coinsurance, deductible, and maximum out-of-pocket amount applied to the benefit for orthotic and prosthetic devices and services shall be no more than the most common amounts contained in the policy.
(c)This section shall not apply to Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 6.Section 10123.81 of the Insurance Code is amended to read:10123.81.(a)An individual or group policy of disability insurance or self-insured employee welfare benefit plan shall be deemed to provide coverage for mammography for screening or diagnostic purposes upon the referral of a participating nurse practitioner, participating certified nurse-midwife, participating physician assistant, or participating physician, providing care to the patient and operating within the scope of practice provided under existing law.
(b)This section does not prevent the application of copayment or deductible provisions in a policy, nor does this section require that a policy be extended to cover any other procedures under an individual or a group policy. This section does not authorize a policyholder to receive the services required to be covered by this section if those services are furnished by a nonparticipating provider, unless the policyholder is referred to that provider by a participating physician, nurse practitioner, or certified nurse-midwife providing care.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 7.Section 10123.865 of the Insurance Code is amended to read:10123.865.(a)Commencing no later than July 1, 2012, an individual health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 8.Section 10123.866 of the Insurance Code is amended to read:10123.866.(a)Commencing no later than July 1, 2012, a group health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 9.Section 10123.198 of the Insurance Code is amended to read:10123.198.(a)On and after July 1, 2011, in accordance with the requirements of subdivision (b), a health insurer that provides coverage for professional mental health services shall issue an identification card to an insured in order to assist the insured with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health insurer issuing the identification card.
(2)The insureds identification number.
(3)A telephone number that insureds or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and if assessment services are provided by the health insurer, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health insurers Internet Web site address.
(b)The identification card required by this section shall be issued by a health insurer to an insured upon commencement of coverage or upon a change in the insureds coverage that impacts the data content or format of the card.
(c)This section does not require a health insurer to issue a separate identification card for professional mental health coverage if the insurer issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health insurer, as described in subdivision (a), delegates responsibility for issuing the card to a contractor or agent, the contractor or agent shall be required to comply with this section.
(e)This section does not prohibit a health insurer from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health insurer shall be deemed compliant with this section if the insurer conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only policy that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 1367.29 of the Health and Safety Code.
SEC. 10.Section 10123.199 of the Insurance Code is amended to read:10123.199.(a)A health insurer that provides coverage for professional mental health services shall establish an Internet Web site. Each Internet Web site shall include, or provide a link to, the following information:
(1)A telephone number that the insured or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 10123.192, or instructions on how to obtain formulary information.
(3)A detailed summary description of the process by which the insurer reviews and approves, modifies, or denies requests for health care services as described in Section 10123.135.
(4)Lists of providers or instructions on how to obtain a provider list as required by Section 10133.1.
(5)A detailed summary of the health insurers grievance process.
(6)A detailed description of how the insured may request continuity of care as described in Section 10133.55.
(7)Information concerning the right, and applicable procedure, of the insured to request an independent medical review pursuant to Section 10169.
(b)Except as otherwise specified, the material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to the insured.
(d)The material described in subdivision (a) shall also be made available to insureds in hard copy upon request.
(e)This article does not preclude an insurer from including additional information on its Internet Web site for applicants or insureds, including, but not limited to, the cost of procedures or services by health care providers in an insurers network.
(f)The department shall include on the departments Internet Web site, a link to the Internet Web site of each health insurer described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(h)This section shall not apply to a health insurer that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its insureds, provided that the health insurer provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 1368.016 of the Health and Safety Code.
SEC. 11.Section 10123.202 of the Insurance Code is amended to read:10123.202.(a)A health insurance policy issued, amended, renewed, or delivered on or after January 1, 2017, excluding specialized health insurance policies, shall be prohibited from requiring an insured to receive a referral before receiving coverage or services for reproductive and sexual health care.
(b)(1)For the purposes of this section, reproductive and sexual health care services are all reproductive and sexual health services described in Sections 6925, 6926, 6927, and 6928 of the Family Code, or Section 121020 of the Health and Safety Code, obtained by a patient.
(2)This section applies whether or not the patient is a minor.
(c)In implementing this section, a health insurer may establish reasonable provisions governing utilization protocols for obtaining reproductive and sexual health care services, as provided for in subdivision (a), if these provisions are consistent with the intent of this section and are those customarily applied to other health care providers, such as primary care physicians and surgeons, to whom the insured has direct access, and are not more restrictive for reproductive and sexual health care services. An insured shall not be required to obtain prior approval from another physician, another provider, or the insurer before obtaining direct access to reproductive and sexual health care services. An insurer may establish reasonable provisions governing communication with the insureds primary care physician and surgeon regarding the insureds condition, treatment, and a need for followup care.
(d)This section shall not apply to a health insurance policy that does not require insureds to obtain a referral from their primary care physician before seeking covered health care services from a specialist.
(e)A health insurer shall not impose utilization protocols related to contraceptive drugs, supplies, and devices beyond those in Section 10123.196.
(f)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRICARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 12.Section 10273.6 of the Insurance Code is amended to read:10273.6.All individual health benefit plans shall be renewable with respect to all eligible individuals or dependents at the option of the individual except as follows:
(a)(1)For nonpayment of the required premiums by the individual if the individual has been duly notified and billed for the premium and at least a 30-day grace period has elapsed since the date of notification or, if longer, the period of time required for notice and any other requirements pursuant to Section 2703, 2712, or 2742 of the federal Public Health Service Act (42 U.S.C. Secs. 300gg-2, 300gg-12, and 300gg-42) and subsequent rules or regulations has elapsed.
(2)Pursuant to paragraph (1), the disability insurer shall continue to provide coverage as required by the policyholders, certificate holders, or other insureds policy during the period described in paragraph (1).
(b)The insurer demonstrates fraud or intentional misrepresentation of material fact under the terms of the policy by the individual.
(c)Movement of the individual contractholder outside the service area, but only if coverage is terminated uniformly without regard to a health status-related factor of covered individuals.
(d)If the disability insurer ceases to provide or arrange for the provision of health care services for new individual health benefit plans in this state, as long as the following conditions are satisfied:
(1)Notice of the decision to cease new or existing individual health benefit plans in this state is provided to the commissioner and to the individual policy or contractholder at least 180 days before discontinuation of that coverage.
(2)Individual health benefit plans shall not be canceled for 180 days after the date of the notice required under paragraph (1) and for that business of a disability insurer that remains in force, a disability insurer that ceases to offer for sale new individual health benefit plans shall continue to be governed by this section with respect to business conducted under this section.
(3)A disability insurer that ceases to write new individual health benefit plans in this state after the effective date of this section shall be prohibited from offering for sale individual health benefit plans in this state for a period of five years from the date of notice to the commissioner.
(e)If the disability insurer withdraws an individual health benefit plan from the market, as long as the disability insurer notifies all affected individuals and the commissioner at least 90 days before the discontinuation of these plans, and the disability insurer makes available to the individual all health benefit plans that it makes available to new individual businesses without regard to a health status-related factor of enrolled individuals or individuals who may become eligible for the coverage.
(f)If coverage is made available in the individual market through a bona fide association, and the membership of the individual in the association on the basis of which the coverage is provided ceases, but only if that coverage is terminated under this subdivision uniformly without regard to a health status-related factor of covered individuals.
SEC. 13.Section 12671 of the Insurance Code is amended to read:12671.As used in this part, the following terms have the following meanings:
(a)Group policy means a group health insurance policy providing medical, hospital, surgical, major medical, or comprehensive medical coverage issued by an insurer, a group contract issued by a hospital service corporation, or medical, hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members, except for self-insurance programs provided by employers that are not exempt from the federal Employee Retirement Income Security Act of 1974 (ERISA), as specified in subdivision (i). For the purposes of this part, a group policy not having an established annual renewal date shall be considered renewed on each anniversary of its effective date.
(b)Conversion coverage means health insurance benefits providing hospital, surgical, major medical, or comprehensive medical coverage issued to an individual under a converted policy.
(c)Converted policy means a policy or contract providing conversion coverage issued by an insurance company or by a hospital service corporation, or individual hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members.
(d)Insurer means the entity issuing a group policy, an individual or converted policy, a hospital service contract or an employer or employee organization otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage to its employees or members.
(e)Insurance refers to health insurance, major medical, or comprehensive coverage paid by premium or contribution under a group policy, a hospital service contract, or as otherwise provided by a policyholder to its employees or members other than by self-insuring except in the case of a plan that is exempt from ERISA, but does include an employer plan that is exempt from ERISA as specified in subdivision (i). Insurance does not include any of the following:
(1)Coverage provided solely as an accrued liability or by reason of a disability extension.
(2)Medicare supplement insurance.
(3)Vision-only insurance.
(4)Dental-only insurance.
(5)CHAMPUS supplement insurance.
(6)Hospital indemnity insurance.
(7)Accident-only insurance.
(8)Short-term limited duration health insurance. Short-term limited duration health insurance means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage.
(9)Specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(f)Policyholder means the holder of a group policy issued by an insurer, a holder of a group contract issued by a hospital service corporation or an employer, employee association, or other entity otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage on a group basis to its employees or members.
(g)Premium means contribution or other consideration paid or payable for coverage under a group policy or converted policy.
(h)Medicare means Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded.
(i)Employer plan that is exempt from ERISA means an employer plan that, pursuant to Section 1003 of Title 29 of the United States Code, is not covered by or that is exempt from Subchapter I (commencing with Section 1001) of Chapter 18 of Title 29 of the United States Code, except that, in the case of a governmental plan, it only includes a self-insured governmental plan as defined in subdivision (j).
(j)Self-insured governmental plan means a self-insured plan established or maintained for its employees by a public entity, as defined in Section 811.2 of the Government Code, that is a governmental plan as defined in subdivision (32) of Section 1002 of Title 29 of the United States Code.
(a)On and after July 1, 2011, in accordance with subdivision (b), a health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall issue an identification card to an enrollee in order to assist the enrollee with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health care service plan issuing the identification card.
(2)The enrollees identification number.
(3)A telephone number that enrollees or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and if assessment services are provided by the health care service plan, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health care service plans Internet Web site address.
(b)The identification card required by this section shall be issued by a health care service plan or a specialized health care service plan to an enrollee upon enrollment or upon a change in the enrollees coverage that impacts the data content or format of the card.
(c)This section does not require a health care service plan to issue a separate identification card for professional mental health services coverage if the plan issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health care service plan or a specialized health care service plan, as described in subdivision (a), delegates responsibility for issuing the identification card to a contractor or an agent, the contractor or agent shall be required to comply with this section.
(e)This section does not prohibit a health care service plan or a specialized health care service plan from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health care service plan shall be deemed compliant with this section if the plan conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only plan that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 10123.198 of the Insurance Code.
SEC. 2.Section 1368.016 of the Health and Safety Code is amended to read:1368.016.(a)A health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall, pursuant to subdivision (f) of Section 1368.015, include on its Internet Web site, or provide a link to, the following information:
(1)A telephone number that the enrollee or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 1367.205, or instructions on how to obtain the formulary, as described in Section 1367.20.
(3)A detailed summary that describes the process by which the plan reviews and authorizes or approves, modifies, or denies requests for health care services as described in Sections 1363.5 and 1367.01.
(4)Lists of providers or instructions on how to obtain the provider list, as required by Section 1367.27.
(5)A detailed summary of the enrollee grievance process as described in Sections 1368 and 1368.015.
(6)A detailed description of how an enrollee may request continuity of care pursuant to subdivisions (a) and (b) of Section 1373.95.
(7)Information concerning the right, and applicable procedure, of an enrollee to request an independent medical review pursuant to Section 1374.30.
(b)Any modified material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to enrollees.
(d)The material described in subdivision (a) shall also be made available to enrollees in hard copy upon request.
(e)This article does not preclude a health care service plan from including additional information on its Internet Web site for applicants, enrollees or subscribers, or providers, including, but not limited to, the cost of procedures or services by health care providers in a plans network.
(f)The department shall include on the departments Internet Web site a link to the Internet Web site of each health care service plan and specialized health care service plan described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(h)This section shall not apply to a health care service plan that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its enrollees, provided that the health care service plan provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 10123.199 of the Insurance Code.
SEC. 3.Section 10113.9 of the Insurance Code is amended to read:10113.9.(a)This section shall not apply to vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(b)(1)A change in the premium rate or coverage for an individual health insurance policy shall not become effective unless the insurer has provided a written notice of the change at least 10 days before the start of the annual enrollment period applicable to the policy or 60 days before the effective date of the policy renewal, whichever occurs earlier in the calendar year.
(2)The written notice required pursuant to paragraph (1) shall be provided to the individual policyholder at his or her last address known to the insurer. The notice shall state in italics and in 12-point type the actual dollar amount of the premium increase and the specific percentage by which the current premium will be increased. The notice shall describe in plain, understandable English any changes in the policy or any changes in benefits, including a reduction in benefits or changes to waivers, exclusions, or conditions, and highlight this information by printing it in italics. The notice shall specify in a minimum of 10-point bold typeface, the reason for a premium rate change or a change in coverage or benefits.
(c)(1)If the department determines that a rate is unreasonable or not justified consistent with Article 4.5 (commencing with Section 10181), the insurer shall notify the policyholder of this determination. This notification may be included in the notice required in subdivision (b). The notification to the policyholder shall be developed by the department. The development of the notification required under this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(2)The notification to the policyholder shall include the following statements in 14-point type:
(A)The Department of Insurance has determined that the rate for this product is unreasonable or not justified after reviewing information submitted to it by the insurer.
(B)During the open enrollment period, the policyholder has the option to obtain other coverage from this insurer or another insurer, or to keep this coverage.
(C)The policyholder may want to contact Covered California at www.coveredca.com for help in understanding available options.
(D)Many Californians are eligible for financial assistance from Covered California to help pay for coverage.
(3)The insurer may include in the notification to the policyholder the Internet Web site address at which the insurers final justification for implementing an increase that has been determined to be unreasonable by the commissioner may be found pursuant to Section 154.230 of Title 45 of the Code of Federal Regulations.
(4)The notice shall also be provided to the agent of record for the policyholder, if any, so that the agent may assist the purchaser in finding other coverage.
(5)In developing the notification, the department shall take into consideration that this notice is required to be provided to an individual applicant pursuant to subdivision (g) of Section 10181.3.
(d)If an insurer rejects a dependent of a policyholder applying to be added to the policyholders individual grandfathered health plan, rejects an applicant for a Medicare supplement policy due to the applicant having end-stage renal disease, or offers an individual grandfathered health plan to an applicant at a rate that is higher than the standard rate, the insurer shall inform the applicant about the California Major Risk Medical Insurance Program (MRMIP) (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code) and about the new coverage options and the potential for subsidized coverage through Covered California. The insurer shall direct persons seeking more information to MRMIP, Covered California, plan or policy representatives, insurance agents, or an entity paid by Covered California to assist with health coverage enrollment, such as a navigator or an assister.
(e)A notice provided pursuant to this section is a private and confidential communication and, at the time of application, the insurer shall give the applicant the opportunity to designate the address for receipt of the written notice in order to protect the confidentiality of personal or privileged information.
(f)For purposes of this section, the following definitions shall apply:
(1)Covered California means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code.
(2)Grandfathered health plan has the same meaning as that term is defined in Section 1251 of PPACA.
(3)PPACA means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and rules, regulations, or guidance issued pursuant to that law.
SEC. 4.Section 10123.61 is added to the Insurance Code, to read:10123.61.(a)Commencing January 1, 2019, a health insurer shall not issue, amend, sell, renew, or offer a policy of short-term limited duration health insurance in this state.
(b)For purposes of this section, short-term limited duration health insurance means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage.
SEC. 5.Section 10123.7 of the Insurance Code is amended to read:10123.7.(a)On or after January 1, 1986, an insurer issuing group health insurance shall offer coverage for orthotic and prosthetic devices and services under the terms and conditions that may be agreed upon between the group policyholder and the insurer. An insurer shall communicate the availability of that coverage to all group policyholders and to all prospective group policyholders with whom the insurer is negotiating. Coverage for prosthetic devices shall include original and replacement devices, as prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license. Coverage for orthotic devices shall provide for coverage if the device, including original and replacement devices, is prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license, or is ordered by a licensed health care provider acting within the scope of his or her license. An insurer shall have the right to conduct a utilization review to determine medical necessity before authorizing these services.
(b)Notwithstanding subdivision (a), on and after July 1, 2007, the amount of the benefit for orthotic and prosthetic devices and services shall be no less than the annual and lifetime benefit maximums applicable to all benefits in the policy. A copayment, coinsurance, deductible, and maximum out-of-pocket amount applied to the benefit for orthotic and prosthetic devices and services shall be no more than the most common amounts contained in the policy.
(c)This section shall not apply to Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 6.Section 10123.81 of the Insurance Code is amended to read:10123.81.(a)An individual or group policy of disability insurance or self-insured employee welfare benefit plan shall be deemed to provide coverage for mammography for screening or diagnostic purposes upon the referral of a participating nurse practitioner, participating certified nurse-midwife, participating physician assistant, or participating physician, providing care to the patient and operating within the scope of practice provided under existing law.
(b)This section does not prevent the application of copayment or deductible provisions in a policy, nor does this section require that a policy be extended to cover any other procedures under an individual or a group policy. This section does not authorize a policyholder to receive the services required to be covered by this section if those services are furnished by a nonparticipating provider, unless the policyholder is referred to that provider by a participating physician, nurse practitioner, or certified nurse-midwife providing care.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 7.Section 10123.865 of the Insurance Code is amended to read:10123.865.(a)Commencing no later than July 1, 2012, an individual health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 8.Section 10123.866 of the Insurance Code is amended to read:10123.866.(a)Commencing no later than July 1, 2012, a group health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 9.Section 10123.198 of the Insurance Code is amended to read:10123.198.(a)On and after July 1, 2011, in accordance with the requirements of subdivision (b), a health insurer that provides coverage for professional mental health services shall issue an identification card to an insured in order to assist the insured with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health insurer issuing the identification card.
(2)The insureds identification number.
(3)A telephone number that insureds or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and if assessment services are provided by the health insurer, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health insurers Internet Web site address.
(b)The identification card required by this section shall be issued by a health insurer to an insured upon commencement of coverage or upon a change in the insureds coverage that impacts the data content or format of the card.
(c)This section does not require a health insurer to issue a separate identification card for professional mental health coverage if the insurer issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health insurer, as described in subdivision (a), delegates responsibility for issuing the card to a contractor or agent, the contractor or agent shall be required to comply with this section.
(e)This section does not prohibit a health insurer from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health insurer shall be deemed compliant with this section if the insurer conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only policy that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 1367.29 of the Health and Safety Code.
SEC. 10.Section 10123.199 of the Insurance Code is amended to read:10123.199.(a)A health insurer that provides coverage for professional mental health services shall establish an Internet Web site. Each Internet Web site shall include, or provide a link to, the following information:
(1)A telephone number that the insured or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 10123.192, or instructions on how to obtain formulary information.
(3)A detailed summary description of the process by which the insurer reviews and approves, modifies, or denies requests for health care services as described in Section 10123.135.
(4)Lists of providers or instructions on how to obtain a provider list as required by Section 10133.1.
(5)A detailed summary of the health insurers grievance process.
(6)A detailed description of how the insured may request continuity of care as described in Section 10133.55.
(7)Information concerning the right, and applicable procedure, of the insured to request an independent medical review pursuant to Section 10169.
(b)Except as otherwise specified, the material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to the insured.
(d)The material described in subdivision (a) shall also be made available to insureds in hard copy upon request.
(e)This article does not preclude an insurer from including additional information on its Internet Web site for applicants or insureds, including, but not limited to, the cost of procedures or services by health care providers in an insurers network.
(f)The department shall include on the departments Internet Web site, a link to the Internet Web site of each health insurer described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(h)This section shall not apply to a health insurer that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its insureds, provided that the health insurer provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 1368.016 of the Health and Safety Code.
SEC. 11.Section 10123.202 of the Insurance Code is amended to read:10123.202.(a)A health insurance policy issued, amended, renewed, or delivered on or after January 1, 2017, excluding specialized health insurance policies, shall be prohibited from requiring an insured to receive a referral before receiving coverage or services for reproductive and sexual health care.
(b)(1)For the purposes of this section, reproductive and sexual health care services are all reproductive and sexual health services described in Sections 6925, 6926, 6927, and 6928 of the Family Code, or Section 121020 of the Health and Safety Code, obtained by a patient.
(2)This section applies whether or not the patient is a minor.
(c)In implementing this section, a health insurer may establish reasonable provisions governing utilization protocols for obtaining reproductive and sexual health care services, as provided for in subdivision (a), if these provisions are consistent with the intent of this section and are those customarily applied to other health care providers, such as primary care physicians and surgeons, to whom the insured has direct access, and are not more restrictive for reproductive and sexual health care services. An insured shall not be required to obtain prior approval from another physician, another provider, or the insurer before obtaining direct access to reproductive and sexual health care services. An insurer may establish reasonable provisions governing communication with the insureds primary care physician and surgeon regarding the insureds condition, treatment, and a need for followup care.
(d)This section shall not apply to a health insurance policy that does not require insureds to obtain a referral from their primary care physician before seeking covered health care services from a specialist.
(e)A health insurer shall not impose utilization protocols related to contraceptive drugs, supplies, and devices beyond those in Section 10123.196.
(f)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRICARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 12.Section 10273.6 of the Insurance Code is amended to read:10273.6.All individual health benefit plans shall be renewable with respect to all eligible individuals or dependents at the option of the individual except as follows:
(a)(1)For nonpayment of the required premiums by the individual if the individual has been duly notified and billed for the premium and at least a 30-day grace period has elapsed since the date of notification or, if longer, the period of time required for notice and any other requirements pursuant to Section 2703, 2712, or 2742 of the federal Public Health Service Act (42 U.S.C. Secs. 300gg-2, 300gg-12, and 300gg-42) and subsequent rules or regulations has elapsed.
(2)Pursuant to paragraph (1), the disability insurer shall continue to provide coverage as required by the policyholders, certificate holders, or other insureds policy during the period described in paragraph (1).
(b)The insurer demonstrates fraud or intentional misrepresentation of material fact under the terms of the policy by the individual.
(c)Movement of the individual contractholder outside the service area, but only if coverage is terminated uniformly without regard to a health status-related factor of covered individuals.
(d)If the disability insurer ceases to provide or arrange for the provision of health care services for new individual health benefit plans in this state, as long as the following conditions are satisfied:
(1)Notice of the decision to cease new or existing individual health benefit plans in this state is provided to the commissioner and to the individual policy or contractholder at least 180 days before discontinuation of that coverage.
(2)Individual health benefit plans shall not be canceled for 180 days after the date of the notice required under paragraph (1) and for that business of a disability insurer that remains in force, a disability insurer that ceases to offer for sale new individual health benefit plans shall continue to be governed by this section with respect to business conducted under this section.
(3)A disability insurer that ceases to write new individual health benefit plans in this state after the effective date of this section shall be prohibited from offering for sale individual health benefit plans in this state for a period of five years from the date of notice to the commissioner.
(e)If the disability insurer withdraws an individual health benefit plan from the market, as long as the disability insurer notifies all affected individuals and the commissioner at least 90 days before the discontinuation of these plans, and the disability insurer makes available to the individual all health benefit plans that it makes available to new individual businesses without regard to a health status-related factor of enrolled individuals or individuals who may become eligible for the coverage.
(f)If coverage is made available in the individual market through a bona fide association, and the membership of the individual in the association on the basis of which the coverage is provided ceases, but only if that coverage is terminated under this subdivision uniformly without regard to a health status-related factor of covered individuals.
SEC. 13.Section 12671 of the Insurance Code is amended to read:12671.As used in this part, the following terms have the following meanings:
(a)Group policy means a group health insurance policy providing medical, hospital, surgical, major medical, or comprehensive medical coverage issued by an insurer, a group contract issued by a hospital service corporation, or medical, hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members, except for self-insurance programs provided by employers that are not exempt from the federal Employee Retirement Income Security Act of 1974 (ERISA), as specified in subdivision (i). For the purposes of this part, a group policy not having an established annual renewal date shall be considered renewed on each anniversary of its effective date.
(b)Conversion coverage means health insurance benefits providing hospital, surgical, major medical, or comprehensive medical coverage issued to an individual under a converted policy.
(c)Converted policy means a policy or contract providing conversion coverage issued by an insurance company or by a hospital service corporation, or individual hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members.
(d)Insurer means the entity issuing a group policy, an individual or converted policy, a hospital service contract or an employer or employee organization otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage to its employees or members.
(e)Insurance refers to health insurance, major medical, or comprehensive coverage paid by premium or contribution under a group policy, a hospital service contract, or as otherwise provided by a policyholder to its employees or members other than by self-insuring except in the case of a plan that is exempt from ERISA, but does include an employer plan that is exempt from ERISA as specified in subdivision (i). Insurance does not include any of the following:
(1)Coverage provided solely as an accrued liability or by reason of a disability extension.
(2)Medicare supplement insurance.
(3)Vision-only insurance.
(4)Dental-only insurance.
(5)CHAMPUS supplement insurance.
(6)Hospital indemnity insurance.
(7)Accident-only insurance.
(8)Short-term limited duration health insurance. Short-term limited duration health insurance means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage.
(9)Specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(f)Policyholder means the holder of a group policy issued by an insurer, a holder of a group contract issued by a hospital service corporation or an employer, employee association, or other entity otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage on a group basis to its employees or members.
(g)Premium means contribution or other consideration paid or payable for coverage under a group policy or converted policy.
(h)Medicare means Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded.
(i)Employer plan that is exempt from ERISA means an employer plan that, pursuant to Section 1003 of Title 29 of the United States Code, is not covered by or that is exempt from Subchapter I (commencing with Section 1001) of Chapter 18 of Title 29 of the United States Code, except that, in the case of a governmental plan, it only includes a self-insured governmental plan as defined in subdivision (j).
(j)Self-insured governmental plan means a self-insured plan established or maintained for its employees by a public entity, as defined in Section 811.2 of the Government Code, that is a governmental plan as defined in subdivision (32) of Section 1002 of Title 29 of the United States Code.
(a)On and after July 1, 2011, in accordance with subdivision (b), a health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall issue an identification card to an enrollee in order to assist the enrollee with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health care service plan issuing the identification card.
(2)The enrollees identification number.
(3)A telephone number that enrollees or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and if assessment services are provided by the health care service plan, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health care service plans Internet Web site address.
(b)The identification card required by this section shall be issued by a health care service plan or a specialized health care service plan to an enrollee upon enrollment or upon a change in the enrollees coverage that impacts the data content or format of the card.
(c)This section does not require a health care service plan to issue a separate identification card for professional mental health services coverage if the plan issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health care service plan or a specialized health care service plan, as described in subdivision (a), delegates responsibility for issuing the identification card to a contractor or an agent, the contractor or agent shall be required to comply with this section.
(e)This section does not prohibit a health care service plan or a specialized health care service plan from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health care service plan shall be deemed compliant with this section if the plan conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only plan that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 10123.198 of the Insurance Code.
SEC. 2.Section 1368.016 of the Health and Safety Code is amended to read:1368.016.(a)A health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall, pursuant to subdivision (f) of Section 1368.015, include on its Internet Web site, or provide a link to, the following information:
(1)A telephone number that the enrollee or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 1367.205, or instructions on how to obtain the formulary, as described in Section 1367.20.
(3)A detailed summary that describes the process by which the plan reviews and authorizes or approves, modifies, or denies requests for health care services as described in Sections 1363.5 and 1367.01.
(4)Lists of providers or instructions on how to obtain the provider list, as required by Section 1367.27.
(5)A detailed summary of the enrollee grievance process as described in Sections 1368 and 1368.015.
(6)A detailed description of how an enrollee may request continuity of care pursuant to subdivisions (a) and (b) of Section 1373.95.
(7)Information concerning the right, and applicable procedure, of an enrollee to request an independent medical review pursuant to Section 1374.30.
(b)Any modified material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to enrollees.
(d)The material described in subdivision (a) shall also be made available to enrollees in hard copy upon request.
(e)This article does not preclude a health care service plan from including additional information on its Internet Web site for applicants, enrollees or subscribers, or providers, including, but not limited to, the cost of procedures or services by health care providers in a plans network.
(f)The department shall include on the departments Internet Web site a link to the Internet Web site of each health care service plan and specialized health care service plan described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(h)This section shall not apply to a health care service plan that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its enrollees, provided that the health care service plan provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 10123.199 of the Insurance Code.
SEC. 3.Section 10113.9 of the Insurance Code is amended to read:10113.9.(a)This section shall not apply to vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(b)(1)A change in the premium rate or coverage for an individual health insurance policy shall not become effective unless the insurer has provided a written notice of the change at least 10 days before the start of the annual enrollment period applicable to the policy or 60 days before the effective date of the policy renewal, whichever occurs earlier in the calendar year.
(2)The written notice required pursuant to paragraph (1) shall be provided to the individual policyholder at his or her last address known to the insurer. The notice shall state in italics and in 12-point type the actual dollar amount of the premium increase and the specific percentage by which the current premium will be increased. The notice shall describe in plain, understandable English any changes in the policy or any changes in benefits, including a reduction in benefits or changes to waivers, exclusions, or conditions, and highlight this information by printing it in italics. The notice shall specify in a minimum of 10-point bold typeface, the reason for a premium rate change or a change in coverage or benefits.
(c)(1)If the department determines that a rate is unreasonable or not justified consistent with Article 4.5 (commencing with Section 10181), the insurer shall notify the policyholder of this determination. This notification may be included in the notice required in subdivision (b). The notification to the policyholder shall be developed by the department. The development of the notification required under this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(2)The notification to the policyholder shall include the following statements in 14-point type:
(A)The Department of Insurance has determined that the rate for this product is unreasonable or not justified after reviewing information submitted to it by the insurer.
(B)During the open enrollment period, the policyholder has the option to obtain other coverage from this insurer or another insurer, or to keep this coverage.
(C)The policyholder may want to contact Covered California at www.coveredca.com for help in understanding available options.
(D)Many Californians are eligible for financial assistance from Covered California to help pay for coverage.
(3)The insurer may include in the notification to the policyholder the Internet Web site address at which the insurers final justification for implementing an increase that has been determined to be unreasonable by the commissioner may be found pursuant to Section 154.230 of Title 45 of the Code of Federal Regulations.
(4)The notice shall also be provided to the agent of record for the policyholder, if any, so that the agent may assist the purchaser in finding other coverage.
(5)In developing the notification, the department shall take into consideration that this notice is required to be provided to an individual applicant pursuant to subdivision (g) of Section 10181.3.
(d)If an insurer rejects a dependent of a policyholder applying to be added to the policyholders individual grandfathered health plan, rejects an applicant for a Medicare supplement policy due to the applicant having end-stage renal disease, or offers an individual grandfathered health plan to an applicant at a rate that is higher than the standard rate, the insurer shall inform the applicant about the California Major Risk Medical Insurance Program (MRMIP) (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code) and about the new coverage options and the potential for subsidized coverage through Covered California. The insurer shall direct persons seeking more information to MRMIP, Covered California, plan or policy representatives, insurance agents, or an entity paid by Covered California to assist with health coverage enrollment, such as a navigator or an assister.
(e)A notice provided pursuant to this section is a private and confidential communication and, at the time of application, the insurer shall give the applicant the opportunity to designate the address for receipt of the written notice in order to protect the confidentiality of personal or privileged information.
(f)For purposes of this section, the following definitions shall apply:
(1)Covered California means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code.
(2)Grandfathered health plan has the same meaning as that term is defined in Section 1251 of PPACA.
(3)PPACA means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and rules, regulations, or guidance issued pursuant to that law.
SEC. 4.Section 10123.61 is added to the Insurance Code, to read:10123.61.(a)Commencing January 1, 2019, a health insurer shall not issue, amend, sell, renew, or offer a policy of short-term limited duration health insurance in this state.
(b)For purposes of this section, short-term limited duration health insurance means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage, including renewals. coverage.
SEC. 5.Section 10123.7 of the Insurance Code is amended to read:10123.7.(a)On or after January 1, 1986, an insurer issuing group health insurance shall offer coverage for orthotic and prosthetic devices and services under the terms and conditions that may be agreed upon between the group policyholder and the insurer. An insurer shall communicate the availability of that coverage to all group policyholders and to all prospective group policyholders with whom the insurer is negotiating. Coverage for prosthetic devices shall include original and replacement devices, as prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license. Coverage for orthotic devices shall provide for coverage if the device, including original and replacement devices, is prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license, or is ordered by a licensed health care provider acting within the scope of his or her license. An insurer shall have the right to conduct a utilization review to determine medical necessity before authorizing these services.
(b)Notwithstanding subdivision (a), on and after July 1, 2007, the amount of the benefit for orthotic and prosthetic devices and services shall be no less than the annual and lifetime benefit maximums applicable to all benefits in the policy. A copayment, coinsurance, deductible, and maximum out-of-pocket amount applied to the benefit for orthotic and prosthetic devices and services shall be no more than the most common amounts contained in the policy.
(c)This section shall not apply to Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 6.Section 10123.81 of the Insurance Code is amended to read:10123.81.(a)An individual or group policy of disability insurance or self-insured employee welfare benefit plan shall be deemed to provide coverage for mammography for screening or diagnostic purposes upon the referral of a participating nurse practitioner, participating certified nurse-midwife, participating physician assistant, or participating physician, providing care to the patient and operating within the scope of practice provided under existing law.
(b)This section does not prevent the application of copayment or deductible provisions in a policy, nor does this section require that a policy be extended to cover any other procedures under an individual or a group policy. This section does not authorize a policyholder to receive the services required to be covered by this section if those services are furnished by a nonparticipating provider, unless the policyholder is referred to that provider by a participating physician, nurse practitioner, or certified nurse-midwife providing care.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 7.Section 10123.865 of the Insurance Code is amended to read:10123.865.(a)Commencing no later than July 1, 2012, an individual health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 8.Section 10123.866 of the Insurance Code is amended to read:10123.866.(a)Commencing no later than July 1, 2012, a group health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 9.Section 10123.198 of the Insurance Code is amended to read:10123.198.(a)On and after July 1, 2011, in accordance with the requirements of subdivision (b), a health insurer that provides coverage for professional mental health services shall issue an identification card to an insured in order to assist the insured with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health insurer issuing the identification card.
(2)The insureds identification number.
(3)A telephone number that insureds or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and if assessment services are provided by the health insurer, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health insurers Internet Web site address.
(b)The identification card required by this section shall be issued by a health insurer to an insured upon commencement of coverage or upon a change in the insureds coverage that impacts the data content or format of the card.
(c)This section does not require a health insurer to issue a separate identification card for professional mental health coverage if the insurer issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health insurer, as described in subdivision (a), delegates responsibility for issuing the card to a contractor or agent, the contractor or agent shall be required to comply with this section.
(e)This section does not prohibit a health insurer from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health insurer shall be deemed compliant with this section if the insurer conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only policy that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 1367.29 of the Health and Safety Code.
SEC. 10.Section 10123.199 of the Insurance Code is amended to read:10123.199.(a)A health insurer that provides coverage for professional mental health services shall establish an Internet Web site. Each Internet Web site shall include, or provide a link to, the following information:
(1)A telephone number that the insured or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 10123.192, or instructions on how to obtain formulary information.
(3)A detailed summary description of the process by which the insurer reviews and approves, modifies, or denies requests for health care services as described in Section 10123.135.
(4)Lists of providers or instructions on how to obtain a provider list as required by Section 10133.1.
(5)A detailed summary of the health insurers grievance process.
(6)A detailed description of how the insured may request continuity of care as described in Section 10133.55.
(7)Information concerning the right, and applicable procedure, of the insured to request an independent medical review pursuant to Section 10169.
(b)Except as otherwise specified, the material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to the insured.
(d)The material described in subdivision (a) shall also be made available to insureds in hard copy upon request.
(e)This article does not preclude an insurer from including additional information on its Internet Web site for applicants or insureds, including, but not limited to, the cost of procedures or services by health care providers in an insurers network.
(f)The department shall include on the departments Internet Web site, a link to the Internet Web site of each health insurer described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, employee assistance programs, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(h)This section shall not apply to a health insurer that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its insureds, provided that the health insurer provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 1368.016 of the Health and Safety Code.
SEC. 11.Section 10123.202 of the Insurance Code is amended to read:10123.202.(a)A health insurance policy issued, amended, renewed, or delivered on or after January 1, 2017, excluding specialized health insurance policies, shall be prohibited from requiring an insured to receive a referral before receiving coverage or services for reproductive and sexual health care.
(b)(1)For the purposes of this section, reproductive and sexual health care services are all reproductive and sexual health services described in Sections 6925, 6926, 6927, and 6928 of the Family Code, or Section 121020 of the Health and Safety Code, obtained by a patient.
(2)This section applies whether or not the patient is a minor.
(c)In implementing this section, a health insurer may establish reasonable provisions governing utilization protocols for obtaining reproductive and sexual health care services, as provided for in subdivision (a), if these provisions are consistent with the intent of this section and are those customarily applied to other health care providers, such as primary care physicians and surgeons, to whom the insured has direct access, and are not more restrictive for reproductive and sexual health care services. An insured shall not be required to obtain prior approval from another physician, another provider, or the insurer before obtaining direct access to reproductive and sexual health care services. An insurer may establish reasonable provisions governing communication with the insureds primary care physician and surgeon regarding the insureds condition, treatment, and a need for followup care.
(d)This section shall not apply to a health insurance policy that does not require insureds to obtain a referral from their primary care physician before seeking covered health care services from a specialist.
(e)A health insurer shall not impose utilization protocols related to contraceptive drugs, supplies, and devices beyond those in Section 10123.196.
(f)This section shall not apply to specialized health insurance, Medicare supplement insurance, CHAMPUS supplement insurance, or TRICARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 12.Section 10273.6 of the Insurance Code is amended to read:10273.6.All individual health benefit plans shall be renewable with respect to all eligible individuals or dependents at the option of the individual except as follows:
(a)(1)For nonpayment of the required premiums by the individual if the individual has been duly notified and billed for the premium and at least a 30-day grace period has elapsed since the date of notification or, if longer, the period of time required for notice and any other requirements pursuant to Section 2703, 2712, or 2742 of the federal Public Health Service Act (42 U.S.C. Secs. 300gg-2, 300gg-12, and 300gg-42) and subsequent rules or regulations has elapsed.
(2)Pursuant to paragraph (1), the disability insurer shall continue to provide coverage as required by the policyholders, certificate holders, or other insureds policy during the period described in paragraph (1).
(b)The insurer demonstrates fraud or intentional misrepresentation of material fact under the terms of the policy by the individual.
(c)Movement of the individual contractholder outside the service area, but only if coverage is terminated uniformly without regard to a health status-related factor of covered individuals.
(d)If the disability insurer ceases to provide or arrange for the provision of health care services for new individual health benefit plans in this state, as long as the following conditions are satisfied:
(1)Notice of the decision to cease new or existing individual health benefit plans in this state is provided to the commissioner and to the individual policy or contractholder at least 180 days before discontinuation of that coverage.
(2)Individual health benefit plans shall not be canceled for 180 days after the date of the notice required under paragraph (1) and for that business of a disability insurer that remains in force, a disability insurer that ceases to offer for sale new individual health benefit plans shall continue to be governed by this section with respect to business conducted under this section.
(3)A disability insurer that ceases to write new individual health benefit plans in this state after the effective date of this section shall be prohibited from offering for sale individual health benefit plans in this state for a period of five years from the date of notice to the commissioner.
(e)If the disability insurer withdraws an individual health benefit plan from the market, as long as the disability insurer notifies all affected individuals and the commissioner at least 90 days before the discontinuation of these plans, and the disability insurer makes available to the individual all health benefit plans that it makes available to new individual businesses without regard to a health status-related factor of enrolled individuals or individuals who may become eligible for the coverage.
(f)If coverage is made available in the individual market through a bona fide association, and the membership of the individual in the association on the basis of which the coverage is provided ceases, but only if that coverage is terminated under this subdivision uniformly without regard to a health status-related factor of covered individuals.
SEC. 13.Section 12671 of the Insurance Code is amended to read:12671.As used in this part, the following terms have the following meanings:
(a)Group policy means a group health insurance policy providing medical, hospital, surgical, major medical, or comprehensive medical coverage issued by an insurer, a group contract issued by a hospital service corporation, or medical, hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members, except for self-insurance programs provided by employers that are not exempt from ERISA, the federal Employee Retirement Income Security Act of 1974 (ERISA), as specified in subdivision (i). For the purposes of this part, a group policy not having an established annual renewal date shall be considered renewed on each anniversary of its effective date.
(b)Conversion coverage means health insurance benefits providing hospital, surgical, major medical, or comprehensive medical coverage issued to an individual under a converted policy.
(c)Converted policy means a policy or contract providing conversion coverage issued by an insurance company or by a hospital service corporation, or individual hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members.
(d)Insurer means the entity issuing a group policy, an individual or converted policy, a hospital service contract or an employer or employee organization otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage to its employees or members.
(e)Insurance refers to health insurance, major medical, or comprehensive coverage paid by premium or contribution under a group policy, a hospital service contract, or as otherwise provided by a policyholder to its employees or members other than by self-insuring except in the case of a plan that is exempt from ERISA, but does include an employer plan that is exempt from ERISA as specified in subdivision (i). Insurance does not include any of the following:
(1)Coverage provided solely as an accrued liability or by reason of a disability extension.
(2)Medicare supplement insurance.
(3)Vision-only insurance.
(4)Dental-only insurance.
(5)CHAMPUS supplement insurance.
(6)Hospital indemnity insurance.
(7)Accident-only insurance.
(8)Short-term limited duration health insurance. Short-term limited duration health insurance means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage, including renewals. coverage.
(9)Specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(f)Policyholder means the holder of a group policy issued by an insurer, a holder of a group contract issued by a hospital service corporation or an employer, employee association, or other entity otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage on a group basis to its employees or members.
(g)Premium means contribution or other consideration paid or payable for coverage under a group policy or converted policy.
(h)Medicare means Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded.
(i)Employer plan that is exempt from ERISA means an employer plan that, pursuant to Section 1003 of Title 29 of the United States Code, is not covered by or that is exempt from Subchapter I (commencing with Section 1001) of Chapter 18 of Title 29 of the United States Code, except that, in the case of a governmental plan, it only includes a self-insured governmental plan as defined in subdivision (j).
(j)Self-insured governmental plan means a self-insured plan established or maintained for its employees by a public entity, as defined in Section 811.2 of the Government Code, that is a governmental plan as defined in subdivision (32) of Section 1002 of Title 29 of the United States Code.
(a)On and after July 1, 2011, in accordance with the requirements of subdivision (b), every a health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall issue an identification card to each an enrollee in order to assist the enrollee with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health care service plan issuing the identification card.
(2)The enrollees identification number.
(3)A telephone number that enrollees or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and when if assessment services are provided by the health care service plan, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health care service plans Internet Web site address.
(b)The identification card required by this section shall be issued by a health care service plan or a specialized health care service plan to an enrollee upon enrollment or upon any a change in the enrollees coverage that impacts the data content or format of the card.
(c)Nothing in this section requires This section does not require a health care service plan to issue a separate identification card for professional mental health services coverage if the plan issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health care service plan or a specialized health care service plan, as described in subdivision (a), delegates responsibility for issuing the identification card to a contractor or an agent, the contractor or agent shall be required to comply with this section.
(e)Nothing in this section shall be construed to This section does not prohibit a health care service plan or a specialized health care service plan from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health care service plan shall be deemed compliant with this section if the plan conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, short-term limited duration health insurance, Champus-supplement CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only plan that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 10123.198 of the Insurance Code.
SEC. 2.Section 1368.016 of the Health and Safety Code is amended to read:1368.016.(a)A health care service plan that provides coverage for professional mental health services, including a specialized health care service plan that provides coverage for professional mental health services, shall, pursuant to subdivision (f) of Section 1368.015, include on its Internet Web site, or provide a link to, the following information:
(1)A telephone number that the enrollee or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 1367.205, or instructions on how to obtain the formulary, as described in Section 1367.20.
(3)A detailed summary that describes the process by which the plan reviews and authorizes or approves, modifies, or denies requests for health care services as described in Sections 1363.5 and 1367.01.
(4)Lists of providers or instructions on how to obtain the provider list, as required by Section 1367.26. 1367.27.
(5)A detailed summary of the enrollee grievance process as described in Sections 1368 and 1368.015.
(6)A detailed description of how an enrollee may request continuity of care pursuant to subdivisions (a) and (b) of Section 1373.95.
(7)Information concerning the right, and applicable procedure, of an enrollee to request an independent medical review pursuant to Section 1374.30.
(b)Any modified material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to enrollees.
(d)The material described in subdivision (a) shall also be made available to enrollees in hard copy upon request.
(e)Nothing in this article shall This article does not preclude a health care service plan from including additional information on its Internet Web site for applicants, enrollees or subscribers, or providers, including, but not limited to, the cost of procedures or services by health care providers in a plans network.
(f)The department shall include on the departments Internet Web site a link to the Internet Web site of each health care service plan and specialized health care service plan described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, short-term limited duration health insurance, CHAMPUS-supplement CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health care service plans, except behavioral health-only plans.
(h)This section shall not apply to a health care service plan that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its enrollees, provided that the health care service plan provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 10123.199 of the Insurance Code.
SEC. 3.Section 10113.9 of the Insurance Code is amended to read:10113.9.(a)This section shall not apply to short-term limited duration health insurance, vision-only, dental-only, or CHAMPUS-supplement CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(b)(1)No A change in the premium rate or coverage for an individual health insurance policy shall not become effective unless the insurer has provided a written notice of the change at least 10 days prior to before the start of the annual enrollment period applicable to the policy or 60 days prior to before the effective date of the policy renewal, whichever occurs earlier in the calendar year.
(2)The written notice required pursuant to paragraph (1) shall be provided to the individual policyholder at his or her last address known to the insurer. The notice shall state in italics and in 12-point type the actual dollar amount of the premium increase and the specific percentage by which the current premium will be increased. The notice shall describe in plain, understandable English any changes in the policy or any changes in benefits, including a reduction in benefits or changes to waivers, exclusions, or conditions, and highlight this information by printing it in italics. The notice shall specify in a minimum of 10-point bold typeface, the reason for a premium rate change or a change in coverage or benefits.
(c)(1)If the department determines that a rate is unreasonable or not justified consistent with Article 4.5 (commencing with Section 10181), the insurer shall notify the policyholder of this determination. This notification may be included in the notice required in subdivision (b). The notification to the policyholder shall be developed by the department. The development of the notification required under this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(2)The notification to the policyholder shall include the following statements in 14-point type:
(A)The Department of Insurance has determined that the rate for this product is unreasonable or not justified after reviewing information submitted to it by the insurer.
(B)During the open enrollment period, the policyholder has the option to obtain other coverage from this insurer or another insurer, or to keep this coverage.
(C)The policyholder may want to contact Covered California at www.coveredca.com for help in understanding available options.
(D)Many Californians are eligible for financial assistance from Covered California to help pay for coverage.
(3)The insurer may include in the notification to the policyholder the Internet Web site address at which the insurers final justification for implementing an increase that has been determined to be unreasonable by the commissioner may be found pursuant to Section 154.230 of Title 45 of the Code of Federal Regulations.
(4)The notice shall also be provided to the agent of record for the policyholder, if any, so that the agent may assist the purchaser in finding other coverage.
(5)In developing the notification, the department shall take into consideration that this notice is required to be provided to an individual applicant pursuant to subdivision (g) of Section 10181.3.
(d)If an insurer rejects a dependent of a policyholder applying to be added to the policyholders individual grandfathered health plan, rejects an applicant for a Medicare supplement policy due to the applicant having end-stage renal disease, or offers an individual grandfathered health plan to an applicant at a rate that is higher than the standard rate, the insurer shall inform the applicant about the California Major Risk Medical Insurance Program (MRMIP) (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code) and about the new coverage options and the potential for subsidized coverage through Covered California. The insurer shall direct persons seeking more information to MRMIP, Covered California, plan or policy representatives, insurance agents, or an entity paid by Covered California to assist with health coverage enrollment, such as a navigator or an assister.
(e)A notice provided pursuant to this section is a private and confidential communication and, at the time of application, the insurer shall give the applicant the opportunity to designate the address for receipt of the written notice in order to protect the confidentiality of any personal or privileged information.
(f)For purposes of this section, the following definitions shall apply:
(1)Covered California means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code.
(2)Grandfathered health plan has the same meaning as that term is defined in Section 1251 of PPACA.
(3)PPACA means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued pursuant to that law.
SECTION 1.SEC. 4.Section 10123.61 is added to the Insurance Code, to read:10123.61.(a)Commencing January 1, 2019, a health insurer shall not issue, amend, sell, renew, or offer a policy of short-term limited duration health insurance policy for health care coverage in this state.
(b)For purposes of this section, the following definitions apply:(1)Short-term limited duration health insurance means individual health insurance coverage provided pursuant to a health insurance policy with a health insurer, intended to be used as transitional or interim coverage, that has an expiration date specified in the policy, taking into account any extensions that may be elected by the policyholder with or without the issuers consent, that is less than 3 months after the original effective date of the policy, and that is not intended to be or marketed as qualifying health insurance coverage.(2)Qualifying health insurance coverage means a health insurance policy that includes coverage for essential health benefits pursuant to Section 10112.27 and that complies with the requirements under Sections 10112.1 and 10112.2, Article 7 (commencing with Section 10198.6), and Chapter 9.9 (commencing with Section 10965).(b)For purposes of this section, short-term limited duration health insurance means health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage, including renewals.
SEC. 5.Section 10123.7 of the Insurance Code is amended to read:10123.7.(a)On or after January 1, 1986, every an insurer issuing group health insurance shall offer coverage for orthotic and prosthetic devices and services under the terms and conditions that may be agreed upon between the group policyholder and the insurer. Every An insurer shall communicate the availability of that coverage to all group policyholders and to all prospective group policyholders with whom they are the insurer is negotiating. Any coverage Coverage for prosthetic devices shall include original and replacement devices, as prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license. Any coverage Coverage for orthotic devices shall provide for coverage when if the device, including original and replacement devices, is prescribed by a physician and surgeon or doctor of podiatric medicine acting within the scope of his or her license, or is ordered by a licensed health care provider acting within the scope of his or her license. Every An insurer shall have the right to conduct a utilization review to determine medical necessity prior to before authorizing these services.
(b)Notwithstanding subdivision (a), on and after July 1, 2007, the amount of the benefit for orthotic and prosthetic devices and services shall be no less than the annual and lifetime benefit maximums applicable to all benefits in the policy. Any A copayment, coinsurance, deductible, and maximum out-of-pocket amount applied to the benefit for orthotic and prosthetic devices and services shall be no more than the most common amounts contained in the policy.
(c)This section shall not apply to Medicare supplement, short-term limited duration health insurance, vision-only, dental-only, or CHAMPUS supplement insurance, or to hospital indemnity, hospital-only, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
SEC. 6.Section 10123.81 of the Insurance Code is amended to read:10123.81.(a)Every An individual or group policy of disability insurance or self-insured employee welfare benefit plan shall be deemed to provide coverage for mammography for screening or diagnostic purposes upon the referral of a participating nurse practitioner, participating certified nurse-midwife, participating physician assistant, or participating physician, providing care to the patient and operating within the scope of practice provided under existing law.
(b)Nothing in this section shall be construed to This section does not prevent the application of copayment or deductible provisions in a policy, nor shall this section be construed to does this section require that a policy be extended to cover any other procedures under an individual or a group policy. Nothing in this section shall be construed to This section does not authorize a policyholder to receive the services required to be covered by this section if those services are furnished by a nonparticipating provider, unless the policyholder is referred to that provider by a participating physician, nurse practitioner, or certified nurse-midwife providing care.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, short-term limited duration health insurance, CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 7.Section 10123.865 of the Insurance Code is amended to read:10123.865.(a)Commencing no later than July 1, 2012, every an individual health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until such the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, short-term limited duration health insurance, CHAMPUS-supplement CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 8.Section 10123.866 of the Insurance Code is amended to read:10123.866.(a)Commencing no later than July 1, 2012, every a group health insurance policy shall provide coverage for maternity services for all insureds covered under the policy.
(b)For purposes of this section, maternity services include prenatal care, ambulatory care maternity services, involuntary complications of pregnancy, neonatal care, and inpatient hospital maternity care, including labor and delivery and postpartum care. This definition of maternity services shall remain in effect until such the time as federal regulations and guidance issued pursuant to the federal Patient Protection and Affordable Care Act (Public Law 111-148) define the scope of benefits to be provided under the maternity benefit requirement of that act, after which time the definition of that term under the federal act and associated regulations and guidance shall apply for purposes of this section.
(c)This section shall not apply to specialized health insurance, Medicare supplement insurance, short-term limited duration health insurance, CHAMPUS-supplement CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 9.Section 10123.198 of the Insurance Code is amended to read:10123.198.(a)On and after July 1, 2011, in accordance with the requirements of subdivision (b), every a health insurer that provides coverage for professional mental health services shall issue an identification card to each an insured in order to assist the insured with accessing health benefits coverage information, including, but not limited to, in-network provider access information, and claims processing purposes. The identification card, at a minimum, shall include all of the following information:
(1)The name of the health insurer issuing the identification card.
(2)The insureds identification number.
(3)A telephone number that insureds or providers may call for assistance with health benefits coverage information, in-network provider access information, and claims processing information, and when if assessment services are provided by the health insurer, access to assessment services for the purpose of referral to an appropriate level of care or an appropriate health care provider.
(4)The health insurers Internet Web site address.
(b)The identification card required by this section shall be issued by a health insurer to an insured upon commencement of coverage or upon any a change in the insureds coverage that impacts the data content or format of the card.
(c)Nothing in this section requires This section does not require a health insurer to issue a separate identification card for professional mental health coverage if the insurer issues a card for health care coverage in general and the card provides the information required by this section.
(d)If a health insurer, as described in subdivision (a), delegates responsibility for issuing the card to a contractor or agent, the contractor or agent shall be required to comply with this section.
(e)Nothing in this section shall be construed to This section does not prohibit a health insurer from meeting the standards of the Workgroup for Electronic Data Interchange (WEDI) or other national uniform standards with respect to identification cards, and a health insurer shall be deemed compliant with this section if the insurer conforms with these standards, as long as the minimum requirements described in subdivision (a) have been met.
(f)For the purposes of this section, identification card includes other technology that performs substantially the same function as an identification card.
(g)(1)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, short-term limited duration health insurance, Champus-supplement CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(2)Notwithstanding paragraph (1), this section shall not apply to a behavioral health-only policy that provides coverage for professional mental health services pursuant to a contract with a health care service plan or insurer if that plan or insurer issues an identification card to its subscribers or insureds pursuant to this section or Section 1367.29 of the Health and Safety Code.
SEC. 10.Section 10123.199 of the Insurance Code is amended to read:10123.199.(a)A health insurer that provides coverage for professional mental health services shall establish an Internet Web site. Each Internet Web site shall include, or provide a link to, the following information:
(1)A telephone number that the insured or provider can call, during normal business hours, for assistance obtaining mental health benefits coverage information, including the extent to which benefits have been exhausted, in-network provider access information, and claims processing information.
(2)A link to prescription drug formularies posted pursuant to Section 10123.192, or instructions on how to obtain formulary information.
(3)A detailed summary description of the process by which the insurer reviews and approves, modifies, or denies requests for health care services as described in Section 10123.135.
(4)Lists of providers or instructions on how to obtain a provider list as required by Section 10133.1.
(5)A detailed summary of the health insurers grievance process.
(6)A detailed description of how the insured may request continuity of care as described in Section 10133.55.
(7)Information concerning the right, and applicable procedure, of the insured to request an independent medical review pursuant to Section 10169.
(b)Except as otherwise specified, the material described in subdivision (a) shall be updated at least quarterly.
(c)The information described in subdivision (a) may be made available through a secured Internet Web site that is only accessible to the insured.
(d)The material described in subdivision (a) shall also be made available to insureds in hard copy upon request.
(e)Nothing in this article shall This article does not preclude an insurer from including additional information on its Internet Web site for applicants or insureds, including, but not limited to, the cost of procedures or services by health care providers in an insurers network.
(f)The department shall include on the departments Internet Web site, a link to the Internet Web site of each health insurer described in subdivision (a).
(g)This section shall not apply to Medicare supplement insurance, Employee Assistance Programs, short-term limited duration health insurance, CHAMPUS-supplement CHAMPUS supplement insurance, or TRI-CARE supplement insurance, or to hospital indemnity, accident-only, and specified disease insurance. This section shall also not apply to specialized health insurance policies, except behavioral health-only policies.
(h)This section shall not apply to a health insurer that contracts with a specialized health care service plan, insurer, or other entity to cover professional mental health services for its insureds, provided that the health insurer provides a link on its Internet Web site to an Internet Web site operated by the specialized health care service plan, insurer, or other entity with which it contracts, and that plan, insurer, or other entity complies with this section or Section 1368.016 of the Health and Safety Code.
SEC. 11.Section 10123.202 of the Insurance Code is amended to read:10123.202.(a)Every A health insurance policy issued, amended, renewed, or delivered on or after January 1, 2017, excluding specialized health insurance policies, shall be prohibited from requiring an insured to receive a referral prior to before receiving coverage or services for reproductive and sexual health care.
(b)(1)For the purposes of this section, reproductive and sexual health care services are all reproductive and sexual health services described in Sections 6925, 6926, 6927, and 6928 of the Family Code, or Section 121020 of the Health and Safety Code, obtained by a patient.
(2)This section applies whether or not the patient is a minor.
(c)In implementing this section, a health insurer may establish reasonable provisions governing utilization protocols for obtaining reproductive and sexual health care services, as provided for in subdivision (a), provided that if these provisions shall be are consistent with the intent of this section and shall be are those customarily applied to other health care providers, such as primary care physicians and surgeons, to whom the insured has direct access, and shall are not be more restrictive for the provision of reproductive and sexual health care services. An insured shall not be required to obtain prior approval from another physician, another provider, or the insurer prior to before obtaining direct access to reproductive and sexual health care services. An insurer may establish reasonable provisions governing communication with the insureds primary care physician and surgeon regarding the insureds condition, treatment, and any a need for followup care.
(d)This section shall not apply to a health insurance policy that does not require insureds to obtain a referral from their primary care physician prior to before seeking covered health care services from a specialist.
(e)A health insurer shall not impose utilization protocols related to contraceptive drugs, supplies, and devices beyond the provisions outlined those in Section 10123.196.
(f)This section shall not apply to specialized health insurance, Medicare supplement insurance, short-term limited duration health insurance, CHAMPUS supplement insurance, or TRICARE supplement insurance, or to hospital indemnity, accident-only, or specified disease insurance.
SEC. 12.Section 10273.6 of the Insurance Code is amended to read:10273.6.All individual health benefit plans, except for short-term limited duration insurance, plans shall be renewable with respect to all eligible individuals or dependents at the option of the individual except as follows:
(a)(1)For nonpayment of the required premiums by the individual if the individual has been duly notified and billed for the premium and at least a 30-day grace period has elapsed since the date of notification or, if longer, the period of time required for notice and any other requirements pursuant to Section 2703, 2712, or 2742 of the federal Public Health Service Act (42 U.S.C. Secs. 300gg-2, 300gg-12, and 300gg-42) and any subsequent rules or regulations has elapsed.
(2)Pursuant to paragraph (1), the disability insurer shall continue to provide coverage as required by the policyholders, certificate holders, or other insureds policy during the period described in paragraph (1).
(b)The insurer demonstrates fraud or intentional misrepresentation of material fact under the terms of the policy by the individual.
(c)Movement of the individual contractholder outside the service area area, but only if coverage is terminated uniformly without regard to any a health status-related factor of covered individuals.
(d)If the disability insurer ceases to provide or arrange for the provision of health care services for new individual health benefit plans in this state; provided, however, that state, as long as the following conditions are satisfied:
(1)Notice of the decision to cease new or existing individual health benefit plans in this state is provided to the commissioner and to the individual policy or contractholder at least 180 days prior to before discontinuation of that coverage.
(2)Individual health benefit plans shall not be canceled for 180 days after the date of the notice required under paragraph (1) and for that business of a disability insurer that remains in force, any a disability insurer that ceases to offer for sale new individual health benefit plans shall continue to be governed by this section with respect to business conducted under this section.
(3)A disability insurer that ceases to write new individual health benefit plans in this state after the effective date of this section shall be prohibited from offering for sale individual health benefit plans in this state for a period of five years from the date of notice to the commissioner.
(e)If the disability insurer withdraws an individual health benefit plan from the market; provided, that market, as long as the disability insurer notifies all affected individuals and the commissioner at least 90 days prior to before the discontinuation of these plans, and that the disability insurer makes available to the individual all health benefit plans that it makes available to new individual businesses without regard to a health status-related factor of enrolled individuals or individuals who may become eligible for the coverage.
(f)If coverage is made available in the individual market through a bona fide association, and the membership of the individual in the association on the basis of which the coverage is provided, provided ceases, but only if that coverage is terminated under this subdivision uniformly without regard to any a health status-related factor of covered individuals.
SEC. 13.Section 12671 of the Insurance Code is amended to read:12671.As used in this part, the following terms have the following meanings:
(a)Group policy means a group health insurance policy providing medical, hospital, surgical, major medical, or comprehensive medical coverage issued by an insurer, a group contract issued by a hospital service corporation, or medical, hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members, except for self-insurance programs provided by employers that are not exempt from ERISA, as specified in subdivision (i). For the purposes of this part, a group policy not having an established annual renewal date shall be considered renewed on each anniversary of its effective date.
(b)Conversion coverage means health insurance benefits providing hospital, surgical, major medical, or comprehensive medical coverage issued to an individual under a converted policy.
(c)Converted policy means a policy or contract providing conversion coverage issued by an insurance company or by a hospital service corporation, or individual hospital, surgical, major medical, or comprehensive medical coverage otherwise provided by a policyholder to its employees or members.
(d)Insurer means the entity issuing a group policy, an individual or converted policy, a hospital service contract or an employer or employee organization otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage to its employees or members.
(e)Insurance refers to health insurance, major medical, or comprehensive coverage paid by premium or contribution under a group policy, a hospital service contract, or as otherwise provided by a policyholder to its employees or members other than by self-insuring except in the case of a plan that is exempt from ERISA, but does include an employer plan that is exempt from ERISA as specified in subdivision (i). Insurance does not include any of the following:
(1)Coverage provided solely as an accrued liability or by reason of a disability extension.
(2)Medicare supplement insurance.
(3)Vision-only insurance.
(4)Dental-only insurance.
(5)CHAMPUS supplement insurance.
(6)Hospital indemnity insurance.
(7)Accident-only insurance.
(8)Short-term limited duration health insurance. Short-term limited duration health insurance means individual health insurance coverage that is offered by a licensed insurance company, intended to be used as transitional or interim coverage to remain in effect for not more than 185 days, that cannot be renewed or otherwise continued for more than one additional period of not more than 185 days, and that is not intended or marketed as health insurance coverage, a health care service plan, or a health maintenance organization subject to guaranteed issuance or guaranteed renewal pursuant to relevant state or federal law. health insurance coverage provided pursuant to a health insurance policy that has an expiration date specified in the policy that is less than 12 months after the original effective date of the coverage, including renewals.
(9)Specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.
(f)Policyholder means the holder of a group policy issued by an insurer, a holder of a group contract issued by a hospital service corporation or an employer, employee association, or other entity otherwise providing medical, hospital, surgical, major medical, or comprehensive medical coverage on a group basis to its employees or members.
(g)Premium means contribution or other consideration paid or payable for coverage under a group policy or converted policy.
(h)Medicare means Title XVIII of the United States Social Security Act as added by the Social Security Amendments of 1965 or as later amended or superseded.
(i)Employer plan that is exempt from ERISA means any an employer plan that, pursuant to the provisions of Section 1003 of Title 29 of the United States Code, is not covered by or that is exempt from the provisions of Subchapter I (commencing with Section 1001) of Chapter 18 of Title 29 of the United States Code, except that, in the case of a governmental plan, it only includes a self-insured governmental plan as defined in subdivision (j).
(j)Self-insured governmental plan means a self-insured plan established or maintained for its employees by any a public entity, as defined in Section 811.2 of the Government Code, that is a governmental plan as defined in subdivision (32) of Section 1002 of Title 29 of the United States Code.
(a)Commencing January 1, 2019, a health insurer shall not issue, sell, renew, or offer a short-term limited duration health insurance policy for health care coverage in this state.
(b)For purposes of this section, the following definitions apply:
(1)Short-term limited duration health insurance means individual health insurance coverage provided pursuant to a health insurance policy with a health insurer, intended to be used as transitional or interim coverage, that has an expiration date specified in the policy, taking into account any extensions that may be elected by the policyholder with or without the issuers consent, that is less than 3 months after the original effective date of the policy, and that is not intended to be or marketed as qualifying health insurance coverage.
(2)Qualifying health insurance coverage means a health insurance policy that includes coverage for essential health benefits pursuant to Section 10112.27 and that complies with the requirements under Sections 10112.1 and 10112.2, Article 7 (commencing with Section 10198.6), and Chapter 9.9 (commencing with Section 10965).
|
Date
|
Status
|
|---|---|
| Sep 22, 2018 | Chaptered by Secretary of State. Chapter 687, Statutes of 2018. |
| Sep 22, 2018 | Approved by the Governor. |
| Aug 24, 2018 | Enrolled and presented to the Governor at 4 p.m. |
| Aug 20, 2018 | Assembly amendments concurred in. (Ayes 26. Noes 9.) Ordered to engrossing and enrolling. |
| Aug 16, 2018 | In Senate. Concurrence in Assembly amendments pending. |
| Aug 16, 2018 | Read third time. Passed. Ordered to the Senate. |
| Aug 9, 2018 | Read third time and amended. |
| Jun 28, 2018 | Read second time. Ordered to third reading. |
| Jun 27, 2018 | From committee: Do pass. (Ayes 12. Noes 0.) (June 27). |
| Jun 20, 2018 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 1.) (June 19). Re-referred to Com. on APPR. |
| May 31, 2018 | Referred to Com. on HEALTH. |
| May 21, 2018 | In Assembly. Read first time. Held at Desk. |
| May 21, 2018 | Read third time. Passed. (Ayes 27. Noes 10.) Ordered to the Assembly. |
| May 15, 2018 | Read second time. Ordered to third reading. |
| May 14, 2018 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| May 4, 2018 | Set for hearing May 14. |
| Mar 14, 2018 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (March 14). Re-referred to Com. on APPR. |
| Mar 5, 2018 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on HEALTH. |
| Feb 28, 2018 | Set for hearing March 14. |
| Feb 1, 2018 | Referred to Com. on HEALTH. |
| Jan 19, 2018 | From printer. May be acted upon on or after February 18. |
| Jan 18, 2018 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 20, 2018 | Unfinished Business SB910 Hernandez et al. Concurrence | Senate Floor |
Passed |
|
| Aug 16, 2018 | SB 910 Hernandez Senate Third Reading By WOOD | Assembly Floor |
Passed |
|
| Jun 27, 2018 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jun 19, 2018 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Health |
Passed |
|
| May 21, 2018 | Senate 3rd Reading SB910 Hernandez et al. | Senate Floor |
Passed |
|
| Mar 14, 2018 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Health |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 319-2081 | ** Against | Jun 25, 2018 |
| Alameda County Board of Supervisors | ** Support | Aug 18, 2018 |
| Alliance of Californians for Community Empowerment Action | ** Support | Jun 15, 2018 |
| America'S Physician Groups | ** Support | Aug 18, 2018 |
| American Cancer Society Cancer Action Network | ** Support | Aug 18, 2018 |
| American Lung Association in California | * Support | Jun 19, 2018 |
| American Physician Groups | * Support | Jun 19, 2018 |
| Anthem Blue Cross | ** Against | Aug 18, 2018 |
| APLA Health | ** Support | Aug 18, 2018 |
| Appr. | ** Against | Jun 25, 2018 |
| Asian Law Alliance | ** Support | Aug 18, 2018 |
| Blue Shield Of California | ** Support | Aug 18, 2018 |
| California Academy Of Family Physicians | ** Support | Jun 15, 2018 |
| California Association Of Health Underwriters | ** Against | Aug 18, 2018 |
| California Black Health Network | * Support | Jun 19, 2018 |
| California Chapter of American College of Emergency Physicians | * Support | Jun 19, 2018 |
| California Chronic Care Coalition | ** Support | Aug 18, 2018 |
| California Department of Insurance | ** Support | Aug 18, 2018 |
| California Federation Of Teachers | ** Support | Aug 18, 2018 |
| california health professional student alliance | ** Support | Aug 18, 2018 |
| California Immigrant Policy Center | ** Support | Aug 18, 2018 |
| California Labor Federation | ** Support | Aug 18, 2018 |
| California Pan-Ethnic Health Network | * Support | Jun 19, 2018 |
| California Physicians Alliance | ** Support | Aug 18, 2018 |
| California Professional Firefighters | ** Support | Aug 18, 2018 |
| California Rural Legal Assistance Foundation | ** Support | Aug 18, 2018 |
| California SEIU | * Support | Jun 19, 2018 |
| California Voices for Progress | ** Support | Jun 15, 2018 |
| Chapcare | ** Support | Aug 18, 2018 |
| Children's Defense Fund California | ** Support | Aug 18, 2018 |
| Children's Defense Fund of California | * Support | Jun 19, 2018 |
| Community Health Councils | ** Support | Jun 15, 2018 |
| Congress of California Seniors | * Support | Jun 19, 2018 |
| Consumers Union | ** Support | Aug 18, 2018 |
| Courage Campaign | ** Support | Jun 15, 2018 |
| Department of Insurance | ** Support | Aug 18, 2018 |
| Disability Rights California | ** Support | Aug 18, 2018 |
| Equality California | ** Support | Aug 18, 2018 |
| Health Access California | ** Support | Aug 18, 2018 |
| Hernandez Strategy | * Support | Mar 14, 2018 |
| Kaiser Permanente | ** Support | Aug 18, 2018 |
| LA Care Health Plan | ** Support | Aug 18, 2018 |
| Latino Coalition for a Healthy California | ** Support | Aug 18, 2018 |
| Leukemia & Lymphoma Society | ** Support | Aug 18, 2018 |
| Maternal and Child Health Access | ** Support | Aug 18, 2018 |
| Molina Healthcare of California | ** Support | Aug 18, 2018 |
| National Association of Social Workers | * Support | Jun 19, 2018 |
| National Health Law Program | ** Support | Aug 18, 2018 |
| National Multiple Sclerosis Society | ** Support | Aug 18, 2018 |
| San Francisco Aids Foundation | ** Support | Aug 18, 2018 |
| Small Business Majority | ** Support | Aug 18, 2018 |
| Tech Net | ** Against | Aug 18, 2018 |
| western center on law & poverty | ** Support | Aug 18, 2018 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
UNFINISHED BUSINESS
Bill No: SB 910
:
SENATE HEALTH COMMITTEE: 7-0, 3/14/18
AYES: Hernandez, Leyva, Mitchell, Monning, Newman, Pan, Roth
NO VOTE RECORDED: Nguyen, Nielsen
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 27-10, 5/21/18
AYES: Allen, Atkins, Beall, Bradford, Cannella, De León, Dodd, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mitchell, Monning, Newman, Pan, Portantino, Roth, Skinner, Stern, Wieckowski, Wiener
NOES: Anderson, Bates, Berryhill, Fuller, Gaines, Moorlach, Morrell, Nielsen, Stone, Vidak
NO VOTE RECORDED: Nguyen, Wilk
ASSEMBLY FLOOR: 51-21, 8/16/18 - See last page for vote
SOURCE: Health Access California
DIGEST:
This bill prohibits a health insurer from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California commencing January 1, 2019.
Assembly Amendments
make technical and clarifying changes including deleting the terms “including renewals” from the definition of short-term limited duration insurance.
Existing law:
- Exempts, under federal law, short-term limited duration policies from the definition of individual health insurance. [42 USC § 300gg-91 (b)(5), 45 CFR § 144.103]
- Establishes the Department of Managed Health Care (DMHC) to regulate health plans and the California Department of Insurance (CDI) to regulate health insurance. [HSC §1340, et. seq., and IC §106, et. seq.]
- Defines, under state law relating to conversion coverage requirements, short-term limited duration health insurance to mean individual health insurance coverage that is offered by a licensed insurance company, intended to be used as transitional or interim coverage to remain in effect for not more than 185 days, that cannot be renewed or otherwise continued for more than one additional period of not more than 185 days, and that is not intended or marketed as health insurance coverage, a health plan, or a health maintenance organization subject to guaranteed issuance or guaranteed renewal pursuant to relevant state law. [IC § 12671 (e)(8)]
- Makes inoperative on January 1, 2014, a requirement on a health insurer to entitle an employee or member whose coverage under a group policy has been terminated to a converted policy issued by the insurer. [IC § 12672]
- Requires all individual health benefit plans, except short-term limited duration insurance, to be renewable with respect to all eligible individuals or dependents at the option of the individual, with exceptions such as for fraud and abuse or if the carrier ceases to provide coverage in the state, among other circumstances. [HSC §1367.29 and IC §10273.6]
- Exempts short-term limited duration health insurance from existing requirements on health plans that cover mental health services, and on health insurance rate increase notifications, requirements on health insurance policies that include professional mental health services, orthotic and prosthetic devices and services, mammography, maternity services, and reproductive and sexual health care services. [HSC §1367.29 and §1368.016, IC §10113.9, §10123.7, §10123.81, §10123.865, §10123.866, §10123.198, §10123.199, and §10123.202]
This bill:
- Prohibits a health insurer, commencing January 1, 2019, from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California.
- Defines “short-term limited duration health insurance” as health insurance coverage provided pursuant to a health insurance policy that has an expiration date that is less than 12 months after the original effective date of the coverage.
- Deletes all exemptions in existing law for short-term limited duration health insurance and revises the definition that is in an inoperative provision of law so that it is consistent with 2) above.
Comments
- Author’s statement. According to the author, short-term limited duration health insurance offers very limited value in a state like California that has embraced the Affordable Care Act (ACA) and been very successful at expanding comprehensive coverage such that only 6.8% of the state’s population is uninsured. Expanded access to insurance coverage is important but coverage also must be comprehensive, affordable and accessible to all. California has been enacting policies to rid the individual and small group markets of junk insurance even before the ACA. With the ACA’s reforms that ensure guaranteed issue of products, prevent underwriting, and require inclusion of essential health benefits, there is no reason to allow these noncompliant products to remain in the market. These products only serve to confuse and mislead Californians into a false security that their health care needs will be covered. These products are not made available to everyone, and in addition to confusing consumers, they are destabilizing to the ACA market, resulting in increased premiums for ACA products. The Urban Institute has released an issue brief stating that average premiums in the ACA-compliant individual insurance market would increase approximately 18% in the states that do not prohibit or limit expanded short-term limited duration plans. This increase includes the impact of the elimination of the individual mandate penalties. For California, the brief indicates a 17.8% premium increase for 2019.
- Short-term limited duration coverage. According to a December 2017 brief by the Georgetown University Health Policy Institute Center on Health Insurance Reforms, short-term limited duration insurance is health insurance that, by definition, covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. These policies do not have to meet ACA consumer protection requirements and they are generally issued to consumers who can pass medical underwriting. These policies provide minimal financial protection for insureds who become sick or injured. According to one analysis described in the brief, these policies regularly excluded coverage for preexisting conditions, did not cover mental health and substance use services, maternity care, or prescription drugs and included out-of-pocket maximums ranging from $7,000 to $20,000 for only three months of coverage.
Federal regulations. Under the ACA, group and individual health insurance cannot include preexisting condition exclusions, discriminate based on health status, have lifetime and annual limits, and they are required to cover preventive health services, dependent coverage to age 26, offer guaranteed issue and renewability of coverage, and cover essential health benefits among other requirements. Under the Obama Administration, federal regulations were adopted to prohibit insurers from offering short-term limited duration policies that lasted longer than three months and required each policy to include a prominent notice that it is not minimum essential coverage, which is coverage that individuals must have to meet ACA requirements and not be subject to a penalty. Effective in 2019, the financial penalty for not having insurance was reduced to zero by the federal Tax Cut and Jobs Act of 2017. The Obama regulations took effect January 1, 2017. However, the federal departments of Health and Human Services, Labor and Treasury indicated they would not enforce the requirement that short-term coverage be less than three months for products sold before April 1, 2017, as long as the coverage ends on or before December 31, 2017. The Trump Administration issued a proposed rule on February 20, 2018 to expand the maximum coverage duration to up to 364 days and change the notice requirement to reflect that the individual mandate penalty is no longer in effect in 2019. The notice also warns that coverage lapsing midyear may create a coverage gap until the next open enrollment period is available. Under both sets of regulations, the departments estimate that approximately 100,000 to 200,000 additional individuals would shift from the individual market to short-term limited duration insurance in 2019. The departments estimate the majority of those who switch would be young and healthy and 90% would be unsubsidized. The final regulations were issued on August 1, 2018 to expand short term limited duration policies to up to 12 months with 36 months of extensions. The final regulations take effect 60 days upon publication, October 1.
- Short-term limited duration health plans in CA. According to DMHC, the Knox-Keene Act (California law that regulates health plans) is silent on the matter of short-term limited duration health insurance but these policies do not comply with many minimum standards required under the Knox-Keene Act. However, these policies do appear to be subject to some type of regulation under the CDI. CDI indicates that gaps in the intersection of federal and California law make some of these policies arguably permissible in California. CDI indicates that many existing state insurance mandates apply to these policies. In a December 8, 2017 Los Angeles Times article, Insurance Commissioner Dave Jones indicates that CDI estimates there are only a few thousand active short-term policies across the state. In the same article, a representative of eHealth.com, a private online health insurance marketplace, indicates that there are not many carriers willing to offer state residents short-term limited duration options.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
According to the Assembly Appropriations Committee analysis, negligible costs.
Health Access California (source)
Alameda County Board of Supervisors
American Cancer Society Cancer Action Network
APLA Health
America’s Physician Groups
Asian Law Alliance
Blue Shield of California
California Chronic Care Coalition
California Department of Insurance
California Federation of Teachers
California Health Professional Student Alliance
California Immigrant Policy Center
California Labor Federation
California Physicians Alliance
California Professional Firefighters
California Rural Legal Assistance Foundation
ChapCare
Children's Defense Fund California
Consumers Union
Department of Insurance
Disability Rights California
Equality California
Kaiser Permanente
LA Care Health Plan
Latino Coalition for a Healthy California
Leukemia & Lymphoma Society
Maternal and Child Health Access
Molina Healthcare of California
National Health Law Program
National Multiple Sclerosis Society
San Francisco AIDS Foundation
Small Business Majority
Western Center on Law & Poverty
OPPOSITION: (Verified 8/17/18)
Anthem Blue Cross
California Association of Health Underwriters
Tech Net
ARGUMENTS IN SUPPORT: Health Access California writes that short-term insurance shortchanges consumers in two ways. First, consumers are lured to these products by cheaper premiums and secondly, short-term insurance plans lack important ACA protections. Without this bill, the pending federal rule will relegate California’s individual insurance market back to the pre-ACA days when consumers were left without care because of loopholes that left those who need maternity care, chemotherapy, or prescription drugs behind. Proponents indicate that this bill would maintain the stability of California’s individual market by ensuring health coverage sold in California provides comprehensive benefits and consumer protections. Short-term insurance is bad for consumers because it lacks basic protections and essential health benefits that cover prescription drugs, maternity care, mental health, and other vital services. Kaiser Permanente supports this bill because short-term plans may cause healthier people to leave comprehensive coverage and choose an alternative plan in the individual or group market, which in turn will lead to market segmentation that will result in higher premiums. Kaiser writes that short-term insurance is detrimental to consumers and will destabilize the individual market in California, leading to premium increases.
ARGUMENTS IN OPPOSITION: Anthem Blue Cross opposes a strict prohibition on short-term limited duration health insurance and supports extending the permitted duration of short-term limited duration health insurance plans to 364 days per the proposed federal rule. Anthem Blue Cross believes, when used appropriately, these policies do serve an important purpose as an affordable source of coverage for individuals who are between plans and that 364 days of coverage is necessary in some cases, such as when an individual misses the deadline for open enrollment, or is between jobs and cannot afford COBRA (COBRA is the Consolidated Omnibus Budget Reconciliation Act, which requires a health plan to offer an outgoing employee continued coverage but without the employer’s premium subsidy). The California Association of Health Underwriters (CAHU) believes this bill removes a critical tool for coverage and leaves affected individuals with no option other than to utilize costly emergency services should a need arise. CAHU requests amendments making these plans available to those who are otherwise legally prohibited from purchasing comprehensive coverage and limited until the next open enrollment.
ASSEMBLY FLOOR: 51-21, 8/16/18
AYES: Aguiar-Curry, Arambula, Berman, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Cooley, Daly, Eggman, Frazier, Friedman, Gabriel, Gallagher, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Jones-Sawyer, Kalra, Kamlager-Dove, Levine, Low, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Wood, Rendon
NOES: Acosta, Travis Allen, Baker, Bigelow, Brough, Chávez, Choi, Cunningham, Dahle, Fong, Harper, Kiley, Lackey, Mathis, Mayes, Melendez, Obernolte, Patterson, Steinorth, Voepel, Waldron
NO VOTE RECORDED: Chen, Cooper, Flora, Cristina Garcia, Eduardo Garcia, Irwin, Limón, Rivas
8/18/18 12:40:17
**** END ****
SENATE THIRD READING
STR Bill Id:SB 910
Author:(Hernandez)
As Amended Ver:August 9, 2018
Majority vote
SENATE VOTE: 27-10
Committee | Votes | Ayes | Noes |
Health | 11-1 | Wood, Aguiar-Curry, Bonta, Burke, Carrillo, Limón, McCarty, Nazarian, Rodriguez, Santiago, Thurmond | Waldron |
Appropriations | 12-0 | Gonzalez Fletcher, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Friedman, Eduardo Garcia, Nazarian, Quirk, Reyes |
|
SUMMARY: Prohibits a health insurer from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California commencing January 1, 2019. Specifically, this bill:
- Prohibits a health insurer, commencing January 1, 2019, from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California.
- Defines short-term limited duration health insurance as health insurance coverage provided pursuant to a health insurance policy that has an expiration date that is less than 12 months after the original effective date of the coverage.
- Deletes all exemptions in existing law for short-term limited duration health insurance and revises the definition that is in an inoperative provision of law so that it is consistent with 2) above.
FISCAL EFFECT: According to the Assembly Appropriations Committee, negligible state costs.
COMMENTS: According to the author, short-term limited duration health insurance offers very limited value in a state like California that has embraced the Patient Protection and Affordable Care Act (ACA) and been very successful at expanding comprehensive coverage such that only 6.8% of the state's population is uninsured. Expanded access to insurance coverage is important but coverage also must be comprehensive, affordable, and accessible to all. California has been enacting policies to rid the individual and small group markets of junk insurance even before the ACA. With the ACA's reforms that ensure guaranteed issue of products, prevent underwriting, and require inclusion of essential health benefits, there is no reason to allow these noncompliant products to remain in the market. These products only serve to confuse and mislead Californians into a false security that their health care needs will be covered. These products are not made available to everyone, and in addition to confusing consumers, they are destabilizing the ACA market, resulting in increased premiums for ACA products. The Urban Institute has released an issue brief stating that average premiums in the ACA-compliant individual insurance market would increase approximately 18% in the states that do not prohibit or limit expanded short-term limited duration plans. This increase includes the impact of the elimination of the individual mandate penalties. For California, the issue brief indicates a 17.8% premium increase for 2019.
- Short-term limited duration coverage. According to a December 2017 brief by the Georgetown University Health Policy Institute Center on Health Insurance Reforms, short-term limited duration insurance is health insurance that, by definition, covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. These policies do not have to meet ACA consumer protection requirements and they are generally issued to consumers who can pass medical underwriting. These policies provide minimal financial protection for insureds who become sick or injured. According to one analysis described in the brief, these policies regularly excluded coverage for preexisting conditions, did not cover mental health and substance use services, maternity care, or prescription drugs and included out-of-pocket maximums ranging from $7,000 to $20,000 for only three months of coverage.
- Federal regulations. Under the ACA, group and individual health insurance cannot include preexisting condition exclusions, discriminate based on health status, have lifetime and annual limits, and are required to cover preventive health services, dependent coverage up to age 26, offer guaranteed issue and renewability of coverage, and cover essential health benefits among other requirements. Under the Obama Administration, federal regulations were adopted to prohibit insurers from offering short-term limited duration policies that lasted longer than three months and required each policy to include a prominent notice that it is not minimum essential coverage, which is coverage that individuals must have to meet ACA requirements and not be subject to a penalty. The Obama regulations took effect January 1, 2017.
The federal departments of Health and Human Services and Labor and Treasury (federal departments) recognized that state regulators may have approved short-term, limited-duration insurance products for sale in 2017 that met the definition in effect prior to January 1, 2017, and therefore indicated they would not enforce the requirement that short-term coverage be less than three months for products sold before April 1, 2017, as long as the coverage ends on or before December 31, 2017.
The Trump Administration issued a proposed rule on February 20, 2018 to expand the maximum coverage duration to up to 364 days and change the notice requirement to reflect that the individual mandate penalty is no longer in effect in 2019 (effective in 2019, the financial penalty for not having insurance will be reduced to zero by the federal Tax Cut and Jobs Act of 2017). The notice also warns that coverage lapsing mid-year may create a coverage gap until the next open enrollment period is available.
Under both sets of regulations, the federal departments estimate that approximately 100,000 to 200,000 additional individuals would shift from the individual market to short-term limited duration insurance in 2019. The federal departments estimate the majority of those who switch would be young and healthy and 90% would be unsubsidized. This rule was finalized on August 1, 2018.
- Short-term limited duration health plans in California. The California Health Care Foundation in its Issue Brief dated April 2018 states that federal policy changes could lead to increased premiums if enrollment in short-term plans grows. The Issue Brief points out that the elimination of the individual mandate penalty and the proposed expansion of short-term plans would create the perfect storm that could take healthy consumers out of Covered California and lead to increased premium rates and the possibility that fewer insurers offer ACA compliant plans and more insurers entering the short term market under weaker federal rules. According to the Issue Brief, and based on self-reporting by insurers, California Department of Insurance (CDI) is aware of fewer than 10,000 policies in effect.
Health Access California, the sponsor of this bill, states that without this bill, the pending federal rule will return California's individual insurance market back to the pre-ACA days when consumers were left without care because of loopholes that left behind those who needed maternity care, chemotherapy, or prescription drugs. Western Center on Law and Poverty writes that this bill would maintain the stability of California's individual market by ensuring health coverage sold in California provides comprehensive benefits and consumer protections. Blue Shield of California states that short term policies products do not provide comprehensive coverage, are inexpensive, and attractive to young, healthy individuals who would otherwise likely purchase coverage in Covered California and when fewer young healthy individuals participate in Covered California, premium increases rise, making the cost of care more expensive for everybody. CDI states in support that it is important that we put in place restrictions on the sale of skimpy benefit policies that would strain any reasonable definition of limited duration.
The California Association of Health Underwriters and TechNet are opposed unless this bill is amended and state that this bill removes a critical tool for coverage and leaves affected individuals with no option other than to utilize costly emergency services should any medical need arise and requests consideration of amendments making these plans available to those who are otherwise legally prohibited from purchasing comprehensive coverage and limited in duration until the next open enrollment. Anthem Blue Cross also opposed unless amended writes that short term plans should be available for rare circumstances when comprehensive coverage may not be immediately available.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0004175
SENATE THIRD READING
STR Bill Id:
Author:(Hernandez)
As Amended Ver:
Majority vote
SENATE VOTE: 27-10
Committee | Votes | Ayes | Noes |
Health | 11-1 | Wood, Aguiar-Curry, Bonta, Burke, Carrillo, Limón, McCarty, Nazarian, Rodriguez, Santiago, Thurmond | Waldron |
Appropriations | 12-0 | Gonzalez Fletcher, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Friedman, Eduardo Garcia, Nazarian, Quirk, Reyes |
SUMMARY: Prohibits a health insurer from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California commencing January 1, 2019. Specifically, this bill:
- Prohibits a health insurer, commencing January 1, 2019, from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California.
- Defines short-term limited duration health insurance as health insurance coverage provided pursuant to a health insurance policy that has an expiration date that is less than 12 months after the original effective date of the coverage, including renewals.
- Deletes all exemptions in existing law for short-term limited duration health insurance and revises the definition that is in an inoperative provision of law so that it is consistent with 2) above.
FISCAL EFFECT: According to the Assembly Appropriations Committee, negligible state costs.
COMMENTS: According to the author, short-term limited duration health insurance offers very limited value in a state like California that has embraced the Patient Protection and Affordable Care Act (ACA) and been very successful at expanding comprehensive coverage such that only 6.8% of the state's population is uninsured. Expanded access to insurance coverage is important but coverage also must be comprehensive, affordable, and accessible to all. California has been enacting policies to rid the individual and small group markets of junk insurance even before the ACA. With the ACA's reforms that ensure guaranteed issue of products, prevent underwriting, and require inclusion of essential health benefits, there is no reason to allow these noncompliant products to remain in the market. These products only serve to confuse and mislead Californians into a false security that their health care needs will be covered. These products are not made available to everyone, and in addition to confusing consumers, they are destabilizing the ACA market, resulting in increased premiums for ACA products. The Urban Institute has released an issue brief stating that average premiums in the ACA-compliant individual insurance market would increase approximately 18% in the states that do not prohibit or limit expanded short-term limited duration plans. This increase includes the impact of the elimination of the individual mandate penalties. For California, the issue brief indicates a 17.8% premium increase for 2019.
- Short-term limited duration coverage. According to a December 2017 brief by the Georgetown University Health Policy Institute Center on Health Insurance Reforms, short-term limited duration insurance is health insurance that, by definition, covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. These policies do not have to meet ACA consumer protection requirements and they are generally issued to consumers who can pass medical underwriting. These policies provide minimal financial protection for insureds who become sick or injured. According to one analysis described in the brief, these policies regularly excluded coverage for preexisting conditions, did not cover mental health and substance use services, maternity care, or prescription drugs and included out-of-pocket maximums ranging from $7,000 to $20,000 for only three months of coverage.
- Federal regulations. Under the ACA, group and individual health insurance cannot include preexisting condition exclusions, discriminate based on health status, have lifetime and annual limits, and are required to cover preventive health services, dependent coverage up to age 26, offer guaranteed issue and renewability of coverage, and cover essential health benefits among other requirements. Under the Obama Administration, federal regulations were adopted to prohibit insurers from offering short-term limited duration policies that lasted longer than three months and required each policy to include a prominent notice that it is not minimum essential coverage, which is coverage that individuals must have to meet ACA requirements and not be subject to a penalty. The Obama regulations took effect January 1, 2017.
The federal departments of Health and Human Services and Labor and Treasury (federal departments) recognized that state regulators may have approved short-term, limited-duration insurance products for sale in 2017 that met the definition in effect prior to January 1, 2017, and therefore indicated they would not enforce the requirement that short-term coverage be less than three months for products sold before April 1, 2017, as long as the coverage ends on or before December 31, 2017.
The Trump Administration issued a proposed rule on February 20, 2018 to expand the maximum coverage duration to up to 364 days and change the notice requirement to reflect that the individual mandate penalty is no longer in effect in 2019 (effective in 2019, the financial penalty for not having insurance will be reduced to zero by the federal Tax Cut and Jobs Act of 2017). The notice also warns that coverage lapsing mid-year may create a coverage gap until the next open enrollment period is available.
Under both sets of regulations, the federal departments estimate that approximately 100,000 to 200,000 additional individuals would shift from the individual market to short-term limited duration insurance in 2019. The federal departments estimate the majority of those who switch would be young and healthy and 90% would be unsubsidized. Comments on the proposed rule were due in April 2018, and once finalized, the Trump regulations will take effect 60 days upon publication.
- Short-term limited duration health plans in California. The California Health Care Foundation in its Issue Brief dated April 2018 states that federal policy changes could lead to increased premiums if enrollment in short-term plans grows. The Issue Brief points out that the elimination of the individual mandate penalty and the proposed expansion of short-term plans would create the perfect storm that could take healthy consumers out of Covered California and lead to increased premium rates and the possibility that fewer insurers offer ACA compliant plans and more insurers entering the short term market under weaker federal rules. According to the Issue Brief, and based on self-reporting by insurers, California Department of Insurance (CDI) is aware of fewer than 10,000 policies in effect.
Health Access California, the sponsor of this bill, states that without this bill, the pending federal rule will return California's individual insurance market back to the pre-ACA days when consumers were left without care because of loopholes that left behind those who needed maternity care, chemotherapy, or prescription drugs. Western Center on Law and Poverty writes that this bill would maintain the stability of California's individual market by ensuring health coverage sold in California provides comprehensive benefits and consumer protections. Blue Shield of California states that short term policies products do not provide comprehensive coverage, are inexpensive, and attractive to young, healthy individuals who would otherwise likely purchase coverage in Covered California and when fewer young healthy individuals participate in Covered California, premium increases rise, making the cost of care more expensive for everybody.
The California Association of Health Underwriters and TechNet are opposed unless this bill is amended and state that this bill removes a critical tool for coverage and leaves affected individuals with no option other than to utilize costly emergency services should any medical need arise and requests consideration of amendments making these plans available to those who are otherwise legally prohibited from purchasing comprehensive coverage and limited in duration until the next open enrollment. Anthem Blue Cross also opposed unless amended writes that short term plans should be available for rare circumstances when comprehensive coverage may not be immediately available.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0003660
Date of Hearing: June 27, 2018
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
SBPCA Bill Id:SB 910
Author:(Hernandez) – As Amended Ver:March 5, 2018
Policy Committee: | Health | Vote: | 11 - 1 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill would prohibit the issuance of "short-term limited duration health insurance," which is defined as health insurance coverage that lasts for a period shorter than 12 months.
FISCAL EFFECT:
Negligible.
COMMENTS:
Purpose. According to the author, short-term limited-duration health insurance offers very limited value in a state like California that has embraced federal health reforms and been very successful at expanding comprehensive coverage. The author indicates short-term products are not made available to everyone and, in addition to confusing consumers, they may destabilize the marketplace for more comprehensive long-term coverage, resulting in increased premiums.
Short-term limited-duration coverage. Short-term limited-duration insurance is health insurance that covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. Few of these policies have been issued in California, but they regularly excluded coverage for preexisting conditions, mental health and substance use services, maternity care, or prescription drugs.
Recent federal regulations. Under the prior federal administration, regulations became effective in 2017 to prohibit insurers from offering short-term limited-duration policies that lasted longer than three months. In an attempt to instead expand access to short-term policies, the current federal administration issued a proposed rule on February 20, 2018 to expand the maximum coverage duration to up to 364 days. Since separate recent federal legislation removed a tax penalty previously imposed on those who lack comprehensive insurance, the potential expansion of short-term plans has the potential to pull younger, healthier people out of the market for comprehensive coverage by offering a cheaper alternative: less-comprehensive health coverage with fewer protections. This would allow people with lower average health care costs to pay less, but raise premiums for people seeking comprehensive coverage. These policies appear to be subject to regulation under the California Department of Insurance, who indicates gaps in the intersection of federal and California law may make some of these policies permissible in California.
- Support and opposition. This bill is sponsored by Health Access California and supported by a number of health advocates and provider groups. The California Association of Health Underwriters and TechNet oppose the bill unless amended, requesting consideration of amendments making short-term plans available to those who are otherwise legally prohibited from purchasing comprehensive coverage and limited in duration until the next open enrollment. Anthem Blue Cross also opposes the bill unless amended to make short-term plans available for rare circumstances when comprehensive coverage may not be immediately available.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
Date of Hearing: June 19, 2018
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
SBPCA Bill Id:SB 910
Author:(Hernandez) – As Amended Ver:March 5, 2018
SENATE VOTE: 27-10
SUBJECT: Short-term limited duration health insurance.
SUMMARY: Prohibits a health insurer from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California commencing January 1, 2019. Specifically, this bill:
- Prohibits a health insurer, commencing January 1, 2019, from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California.
- Defines short-term limited duration health insurance as health insurance coverage provided pursuant to a health insurance policy that has an expiration date that is less than 12 months after the original effective date of the coverage, including renewals.
- Deletes all exemptions in existing law for short-term limited duration health insurance and revises the definition that is in an inoperative provision of law so that it is consistent with 2) above.
EXISTING LAW:
- Establishes the federal Patient Protection and Affordable Care Act (ACA), which enacts various health care coverage market reforms including the availability of health insurance exchanges.
- Exempts, under federal law, short-term limited duration policies from the definition of individual health insurance.
- Establishes the Department of Managed Health Care (DMHC) to regulate health plans and the California Department of Insurance (CDI) to regulate health insurance.
- Defines, under state law relating to conversion coverage requirements, short-term limited duration health insurance to mean individual health insurance coverage that is offered by a licensed insurance company, intended to be used as transitional or interim coverage to remain in effect for not more than 185 days, that cannot be renewed or otherwise continued for more than one additional period of not more than 185 days, and that is not intended or marketed as health insurance coverage, a health plan, or a health maintenance organization subject to guaranteed issuance or guaranteed renewal pursuant to relevant state law.
- Makes inoperative on January 1, 2014, a requirement on a health insurer to entitle an employee or member whose coverage under a group policy has been terminated to a converted policy issued by the insurer.
- Requires all individual health benefit plans, except short-term limited duration insurance, to be renewable with respect to all eligible individuals or dependents at the option of the individual, with exceptions such as for fraud and abuse or if the carrier ceases to provide coverage in the state, among other circumstances.
- Exempts short-term limited duration health insurance from existing requirements on health plans that cover mental health services, and on health insurance rate increase notifications, requirements on health insurance policies that include professional mental health services, orthotic and prosthetic devices and services, mammography, maternity services, and reproductive and sexual health care services.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, short-term limited duration health insurance offers very limited value in a state like California that has embraced the ACA and been very successful at expanding comprehensive coverage such that only 6.8% of the state’s population is uninsured. Expanded access to insurance coverage is important but coverage also must be comprehensive, affordable, and accessible to all. California has been enacting policies to rid the individual and small group markets of junk insurance even before the ACA. With the ACA’s reforms that ensure guaranteed issue of products, prevent underwriting, and require inclusion of essential health benefits, there is no reason to allow these noncompliant products to remain in the market. These products only serve to confuse and mislead Californians into a false security that their health care needs will be covered. These products are not made available to everyone, and in addition to confusing consumers, they are destabilizing the ACA market, resulting in increased premiums for ACA products. The Urban Institute has released an issue brief stating that average premiums in the ACA-compliant individual insurance market would increase approximately 18% in the states that do not prohibit or limit expanded short-term limited duration plans. This increase includes the impact of the elimination of the individual mandate penalties. For California, the issue brief indicates a 17.8% premium increase for 2019.
- BACKGROUND.
- Short-term limited duration coverage. According to a December 2017 brief by the Georgetown University Health Policy Institute Center on Health Insurance Reforms, short-term limited duration insurance is health insurance that, by definition, covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. These policies do not have to meet ACA consumer protection requirements and they are generally issued to consumers who can pass medical underwriting. These policies provide minimal financial protection for insureds who become sick or injured. According to one analysis described in the brief, these policies regularly excluded coverage for preexisting conditions, did not cover mental health and substance use services, maternity care, or prescription drugs and included out-of-pocket maximums ranging from $7,000 to $20,000 for only three months of coverage.
- Federal regulations. Under the ACA, group and individual health insurance cannot include preexisting condition exclusions, discriminate based on health status, have lifetime and annual limits, and are required to cover preventive health services, dependent coverage up to age 26, offer guaranteed issue and renewability of coverage, and cover essential health benefits among other requirements. Under the Obama Administration, federal regulations were adopted to prohibit insurers from offering short-term limited duration policies that lasted longer than three months and required each policy to include a prominent notice that it is not minimum essential coverage, which is coverage that individuals must have to meet ACA requirements and not be subject to a penalty. The Obama regulations took effect January 1, 2017.
The federal departments of Health and Human Services and Labor and Treasury (federal departments) recognized that state regulators may have approved short-term, limited-duration insurance products for sale in 2017 that met the definition in effect prior to January 1, 2017, and therefore indicated they would not enforce the requirement that short-term coverage be less than three months for products sold before April 1, 2017, as long as the coverage ends on or before December 31, 2017.
The Trump Administration issued a proposed rule on February 20, 2018 to expand the maximum coverage duration to up to 364 days and change the notice requirement to reflect that the individual mandate penalty is no longer in effect in 2019 (effective in 2019, the financial penalty for not having insurance will be reduced to zero by the federal Tax Cut and Jobs Act of 2017). The notice also warns that coverage lapsing mid-year may create a coverage gap until the next open enrollment period is available.
Under both sets of regulations, the federal departments estimate that approximately 100,000 to 200,000 additional individuals would shift from the individual market to short-term limited duration insurance in 2019. The federal departments estimate the majority of those who switch would be young and healthy and 90% would be unsubsidized. Comments on the proposed rule were due in April 2018, and once finalized, the Trump regulations will take effect 60 days upon publication. - Short-term limited duration health plans in California. While short-term limited duration health insurance policies do not meet the minimum requirements as a health plan regulated by the DMHC, these policies do appear to be subject to some type of regulation under the CDI. CDI indicates that gaps in the intersection of federal and California law make some of these policies arguably permissible in California. CDI indicates that many existing state insurance mandates apply to these policies.
- Short-term limited duration coverage. According to a December 2017 brief by the Georgetown University Health Policy Institute Center on Health Insurance Reforms, short-term limited duration insurance is health insurance that, by definition, covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. These policies do not have to meet ACA consumer protection requirements and they are generally issued to consumers who can pass medical underwriting. These policies provide minimal financial protection for insureds who become sick or injured. According to one analysis described in the brief, these policies regularly excluded coverage for preexisting conditions, did not cover mental health and substance use services, maternity care, or prescription drugs and included out-of-pocket maximums ranging from $7,000 to $20,000 for only three months of coverage.
The California Health Care Foundation in its Issue Brief dated April 2018 states that federal policy changes could lead to increased premiums if enrollment in short-term plans grows. The Issue Brief points out that the elimination of the individual mandate penalty and the proposed expansion of short-term plans would create the perfect storm that could take healthy consumers out of Covered California and lead to increased premium rates and the possibility that fewer insurers offer ACA compliant plans and more insurers entering the short term market under weaker federal rules. According to the Issue Brief, and based on self-reporting by insurers, CDI is aware of fewer than 10,000 policies in effect.
- SUPPORT. Health Access California, the sponsor of this bill, states that without this bill, the pending federal rule will return California’s individual insurance market back to the pre-ACA days when consumers were left without care because of loopholes that left behind those who needed maternity care, chemotherapy, or prescription drugs. Western Center on Law and Poverty writes that this bill would maintain the stability of California’s individual market by ensuring health coverage sold in California provides comprehensive benefits and consumer protections. Blue Shield of California states that short term policies products do not provide comprehensive coverage, are inexpensive, and attractive to young, healthy individuals who would otherwise likely purchase coverage in Covered California and when fewer young healthy individuals participate in Covered California, premium increases rise, making the cost of care more expensive for everybody.
- OPPOSE UNLESS AMENDED. The California Association of Health Underwriters and TechNet are opposed unless this bill is amended and state that this bill removes a critical tool for coverage and leaves affected individuals with no option other than to utilize costly emergency services should any medical need arise and requests consideration of amendments making these plans available to those who are otherwise legally prohibited from purchasing comprehensive coverage and limited in duration until the next open enrollment. Anthem Blue Cross also opposed unless amended writes that short term plans should be available for rare circumstances when comprehensive coverage may not be immediately available.
- PREVIOUS LEGISLATION. AB 1180 (Pan), Chapter 441, Statutes of 2013, makes inoperative several provisions in existing law that implement the health insurance laws of the federal Health Insurance Portability and Accountability Act of 1996 and additional provisions that provide former employees rights to convert their group health insurance coverage to individual market coverage without medical underwriting, because of the ACA. AB 1180 also establishes notification requirements informing individuals affected by AB 1180 of health insurance available in 2014 under the ACA.
REGISTERED SUPPORT / OPPOSITION:
Support
Health Access California (sponsor)
Alliance of Californians for Community Empowerment Action
America’s Physician Groups
American Cancer Society Cancer Action Network
American Federation of State, County and Municipal Employees, AFL-CIO
American Lung Association
Asian Law Alliance
Blue Shield of California
California Academy of Family Physicians
California Chapter of the American College of Emergency Physicians
California Federation of Teachers
California Health Professional Student Alliance
California Immigrant Policy Center
California Labor Federation
California Pan-Ethnic Health Network
California Physicians Alliance
California Voices for Progress
Children’s Defense Fund
Community Health Councils
Congress of California Seniors
Courage Campaign
Disability Rights California
Kaiser Permanente
Leukemia & Lymphoma Society
Molina Healthcare of California
National Health Law Program
National Multiple Sclerosis Society
San Francisco AIDS Foundation
Western Center on Law and Poverty
Opposition
None on file.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
THIRD READING
Bill No: SB 910
:
SENATE HEALTH COMMITTEE: 7-0, 3/14/18
AYES: Hernandez, Leyva, Mitchell, Monning, Newman, Pan, Roth
NO VOTE RECORDED: Nguyen, Nielsen
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SOURCE: Health Access California
DIGEST:
This bill prohibits a health insurer from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California commencing January 1, 2019.
Existing law:
- Exempts, under federal law, short-term limited duration policies from the definition of individual health insurance. [42 USC § 300gg-91 (b)(5), 45 CFR § 144.103]
- Establishes the Department of Managed Health Care (DMHC) to regulate health plans and the California Department of Insurance (CDI) to regulate health insurance. [HSC §1340, et. seq., and IC §106, et. seq.]
- Defines, under state law relating to conversion coverage requirements, short-term limited duration health insurance to mean individual health insurance coverage that is offered by a licensed insurance company, intended to be used as transitional or interim coverage to remain in effect for not more than 185 days, that cannot be renewed or otherwise continued for more than one additional period of not more than 185 days, and that is not intended or marketed as health insurance coverage, a health plan, or a health maintenance organization subject to guaranteed issuance or guaranteed renewal pursuant to relevant state law. [IC § 12671 (e)(8)]
- Makes inoperative on January 1, 2014, a requirement on a health insurer to entitle an employee or member whose coverage under a group policy has been terminated to a converted policy issued by the insurer. [IC § 12672]
- Requires all individual health benefit plans, except short-term limited duration insurance, to be renewable with respect to all eligible individuals or dependents at the option of the individual, with exceptions such as for fraud and abuse or if the carrier ceases to provide coverage in the state, among other circumstances. [HSC §1367.29 and IC §10273.6]
- Exempts short-term limited duration health insurance from existing requirements on health plans that cover mental health services, and on health insurance rate increase notifications, requirements on health insurance policies that include professional mental health services, orthotic and prosthetic devices and services, mammography, maternity services, and reproductive and sexual health care services. [HSC §1367.29 and §1368.016, IC §10113.9, §10123.7, §10123.81, §10123.865, §10123.866, §10123.198, §10123.199, and §10123.202]
This bill:
- Prohibits a health insurer, commencing January 1, 2019, from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California.
- Defines “short-term limited duration health insurance” as health insurance coverage provided pursuant to a health insurance policy that has an expiration date that is less than 12 months after the original effective date of the coverage, including renewals.
- Deletes all exemptions in existing law for short-term limited duration health insurance and revises the definition that is in an inoperative provision of law so that it is consistent with 2) above.
Comments
- Author’s statement. According to the author, short-term limited duration health insurance offers very limited value in a state like California that has embraced the Affordable Care Act (ACA) and been very successful at expanding comprehensive coverage such that only 6.8% of the state’s population is uninsured. Expanded access to insurance coverage is important but coverage also must be comprehensive, affordable and accessible to all. California has been enacting policies to rid the individual and small group markets of junk insurance even before the ACA. With the ACA’s reforms that ensure guaranteed issue of products, prevent underwriting, and require inclusion of essential health benefits, there is no reason to allow these noncompliant products to remain in the market. These products only serve to confuse and mislead Californians into a false security that their health care needs will be covered. These products are not made available to everyone, and in addition to confusing consumers, they are destabilizing to the ACA market, resulting in increased premiums for ACA products. The Urban Institute has released an issue brief stating that average premiums in the ACA-compliant individual insurance market would increase approximately 18% in the states that do not prohibit or limit expanded short-term limited duration plans. This increase includes the impact of the elimination of the individual mandate penalties. For California, the brief indicates a 17.8% premium increase for 2019.
- Short-term limited duration coverage. According to a December 2017 brief by the Georgetown University Health Policy Institute Center on Health Insurance Reforms, short-term limited duration insurance is health insurance that, by definition, covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. These policies do not have to meet ACA consumer protection requirements and they are generally issued to consumers who can pass medical underwriting. These policies provide minimal financial protection for insureds who become sick or injured. According to one analysis described in the brief, these policies regularly excluded coverage for preexisting conditions, did not cover mental health and substance use services, maternity care, or prescription drugs and included out-of-pocket maximums ranging from $7,000 to $20,000 for only three months of coverage.
- Federal regulations. Under the ACA, group and individual health insurance cannot include preexisting condition exclusions, discriminate based on health status, have lifetime and annual limits, and they are required to cover preventive health services, dependent coverage to age 26, offer guaranteed issue and renewability of coverage, and cover essential health benefits among other requirements. Under the Obama Administration, federal regulations were adopted to prohibit insurers from offering short-term limited duration policies that lasted longer than three months and required each policy to include a prominent notice that it is not minimum essential coverage, which is coverage that individuals must have to meet ACA requirements and not be subject to a penalty. Effective in 2019, the financial penalty for not having insurance was reduced to zero by the federal Tax Cut and Jobs Act of 2017. The Obama regulations took effect January 1, 2017. However, the federal departments of Health and Human Services, Labor and Treasury indicated they would not enforce the requirement that short-term coverage be less than three months for products sold before April 1, 2017, as long as the coverage ends on or before December 31, 2017. The Trump Administration issued a proposed rule on February 20, 2018 to expand the maximum coverage duration to up to 364 days and change the notice requirement to reflect that the individual mandate penalty is no longer in effect in 2019. The notice also warns that coverage lapsing midyear may create a coverage gap until the next open enrollment period is available. Under both sets of regulations, the departments estimate that approximately 100,000 to 200,000 additional individuals would shift from the individual market to short-term limited duration insurance in 2019. The departments estimate the majority of those who switch would be young and healthy and 90% would be unsubsidized. Once finalized, the Trump regulations will take effect 60 days upon publication.
- Short-term limited duration health plans in CA. According to DMHC, the Knox-Keene Act (California law that regulates health plans) is silent on the matter of short-term limited duration health insurance but these policies do not comply with many minimum standards required under the Knox-Keene Act. However, these policies do appear to be subject to some type of regulation under the CDI. CDI indicates that gaps in the intersection of federal and California law make some of these policies arguably permissible in California. CDI indicates that many existing state insurance mandates apply to these policies. In a December 8, 2017 Los Angeles Times article, Insurance Commissioner Dave Jones indicates that CDI estimates there are only a few thousand active short-term policies across the state. In the same article, a representative of eHealth.com, a private online health insurance marketplace, indicates that there are not many carriers willing to offer state residents short-term limited duration options.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Health Access California (source)
Alameda County Board of Supervisors
American Cancer Society Cancer Action Network
APLA Health
Asian Law Alliance
Blue Shield of California
California Chronic Care Coalition
California Federation of Teachers
California Health Professional Student Alliance
California Immigrant Policy Center
California Labor Federation
California Physicians Alliance
California Rural Legal Assistance Foundation
ChapCare
Children's Defense Fund California
Consumers Union
Disability Rights California
Equality California
Kaiser Permanente
LA Care Health Plan
Latino Coalition for a Healthy California
Maternal and Child Health Access
National Health Law Program
National Multiple Sclerosis Society
San Francisco AIDS Foundation
Small Business Majority
Western Center on Law & Poverty
OPPOSITION: (Verified 5/10/18)
Anthem Blue Cross
California Association of Health Underwriters
ARGUMENTS IN SUPPORT: Health Access California writes that short-term insurance shortchanges consumers in two ways. First, consumers are lured to these products by cheaper premiums and secondly, short-term insurance plans lack important ACA protections. Without this bill, the pending federal rule will relegate California’s individual insurance market back to the pre-ACA days when consumers were left without care because of loopholes that left those who need maternity care, chemotherapy, or prescription drugs behind. Proponents indicate that this bill would maintain the stability of California’s individual market by ensuring health coverage sold in California provides comprehensive benefits and consumer protections. Short-term insurance is bad for consumers because it lacks basic protections and essential health benefits that cover prescription drugs, maternity care, mental health, and other vital services. Kaiser Permanente supports this bill because short-term plans may cause healthier people to leave comprehensive coverage and choose an alternative plan in the individual or group market, which in turn will lead to market segmentation that will result in higher premiums. Kaiser writes that short-term insurance is detrimental to consumers and will destabilize the individual market in California, leading to premium increases.
ARGUMENTS IN OPPOSITION: Anthem Blue Cross opposes a strict prohibition on short-term limited duration health insurance and supports extending the permitted duration of short-term limited duration health insurance plans to 364 days per the proposed federal rule. Anthem Blue Cross believes, when used appropriately, these policies do serve an important purpose as an affordable source of coverage for individuals who are between plans and that 364 days of coverage is necessary in some cases, such as when an individual misses the deadline for open enrollment, or is between jobs and cannot afford COBRA (COBRA is the Consolidated Omnibus Budget Reconciliation Act, which requires a health plan to offer an outgoing employee continued coverage but without the employer’s premium subsidy). The California Association of Health Underwriters (CAHU) believes this bill removes a critical tool for coverage and leaves affected individuals with no option other than to utilize costly emergency services should a need arise. CAHU requests amendments making these plans available to those who are otherwise legally prohibited from purchasing comprehensive coverage and limited until the next open enrollment.
5/16/18 9:57:41
**** END ****
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 910
AUTHOR: | Hernandez | ||
VERSION: | March 5, 2018 | ||
HEARING DATE: | March 14, 2018 | ||
CONSULTANT: | Teri Boughton | ||
SUBJECT: Short-term limited duration health insurance
SUMMARY:
Prohibits a health insurer from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California commencing January 1, 2019.
Existing law:
- Exempts, under federal law, short-term limited duration policies from the definition of individual health insurance. [42 USC § 300gg-91 (b)(5), 45 CFR § 144.103]
- Establishes the Department of Managed Health Care (DMHC) to regulate health plans and the California Department of Insurance (CDI) to regulate health insurance. [HSC §1340, et. seq., and IC §106, et. seq.]
- Defines, under state law relating to conversion coverage requirements, short-term limited duration health insurance to mean individual health insurance coverage that is offered by a licensed insurance company, intended to be used as transitional or interim coverage to remain in effect for not more than 185 days, that cannot be renewed or otherwise continued for more than one additional period of not more than 185 days, and that is not intended or marketed as health insurance coverage, a health plan, or a health maintenance organization subject to guaranteed issuance or guaranteed renewal pursuant to relevant state law. [IC § 12671 (e)(8)]
- Makes inoperative on January 1, 2014, a requirement on a health insurer to entitle an employee or member whose coverage under a group policy has been terminated to a converted policy issued by the insurer. [IC § 12672]
- Requires all individual health benefit plans, except short-term limited duration insurance, to be renewable with respect to all eligible individuals or dependents at the option of the individual, with exceptions such as for fraud and abuse or if the carrier ceases to provide coverage in the state, among other circumstances. [HSC §1367.29 and IC §10273.6]
- Exempts short-term limited duration health insurance from existing requirements on health plans that cover mental health services, and on health insurance rate increase notifications, requirements on health insurance policies that include professional mental health services, orthotic and prosthetic devices and services, mammography, maternity services, and reproductive and sexual health care services. [HSC §1367.29 and §1368.016, IC §10113.9, §10123.7, §10123.81, §10123.865, §10123.866, §10123.198, §10123.199, and §10123.202]
This bill:
- Prohibits a health insurer, commencing January 1, 2019, from issuing, amending, selling, renewing, or offering a policy of short-term limited duration health insurance in California.
- Defines “short-term limited duration health insurance” as health insurance coverage provided pursuant to a health insurance policy that has an expiration date that is less than 12 months after the original effective date of the coverage, including renewals.
- Deletes all exemptions in existing law for short-term limited duration health insurance and revises the definition that is in an inoperative provision of law so that it is consistent with 2) above.
FISCAL EFFECT:
This bill has not been analyzed by a fiscal committee.
COMMENTS:
- Author’s statement. According to the author, short-term limited duration health insurance offers very limited value in a state like California that has embraced the Affordable Care Act (ACA) and been very successful at expanding comprehensive coverage such that only 6.8% of the state’s population is uninsured. Expanded access to insurance coverage is important but coverage also must be comprehensive, affordable and accessible to all. California has been enacting policies to rid the individual and small group markets of junk insurance even before the ACA. With the ACA’s reforms that ensure guaranteed issue of products, prevent underwriting, and require inclusion of essential health benefits, there is no reason to allow these noncompliant products to remain in the market. These products only serve to confuse and mislead Californians into a false security that their health care needs will be covered. These products are not made available to everyone, and in addition to confusing consumers, they are destabilizing to the ACA market, resulting in increased premiums for ACA products. The Urban Institute has released an issue brief stating that average premiums in the ACA-compliant individual insurance market would increase approximately 18% in the states that do not prohibit or limit expanded short-term limited duration plans. This increase includes the impact of the elimination of the individual mandate penalties. For California, the brief indicates a 17.8% premium increase for 2019.
- Short-term limited duration coverage. According to a December 2017 brief by the Georgetown University Health Policy Institute Center on Health Insurance Reforms, short-term limited duration insurance is health insurance that, by definition, covers someone for less than 12 months and is not renewable. It was designed to fill temporary gaps in coverage. These policies do not have to meet ACA consumer protection requirements and they are generally issued to consumers who can pass medical underwriting. These policies provide minimal financial protection for insureds who become sick or injured. According to one analysis described in the brief, these policies regularly excluded coverage for preexisting conditions, did not cover mental health and substance use services, maternity care, or prescription drugs and included out-of-pocket maximums ranging from $7,000 to $20,000 for only three months of coverage.
- Federal regulations. Under the ACA, group and individual health insurance cannot include preexisting condition exclusions, discriminate based on health status, have lifetime and annual limits, and they are required to cover preventive health services, dependent coverage to age 26, offer guaranteed issue and renewability of coverage, and cover essential health benefits among other requirements. Under the Obama Administration, federal regulations were adopted to prohibit insurers from offering short-term limited duration policies that lasted longer than three months and required each policy to include a prominent notice that it is not minimum essential coverage, which is coverage that individuals must have to meet ACA requirements and not be subject to a penalty. Effective in 2019, the financial penalty for not having insurance was reduced to zero by the federal Tax Cut and Jobs Act of 2017. The Obama regulations took effect January 1, 2017. However, the federal departments of Health and Human Services, Labor and Treasury indicated they would not enforce the requirement that short-term coverage be less than three months for products sold before April 1, 2017, as long as the coverage ends on or before December 31, 2017. The Trump Administration issued a proposed rule on February 20, 2018 to expand the maximum coverage duration to up to 364 days and change the notice requirement to reflect that the individual mandate penalty is no longer in effect in 2019. The notice also warns that coverage lapsing midyear may create a coverage gap until the next open enrollment period is available. Under both sets of regulations, the departments estimate that approximately 100,000 to 200,000 additional individuals would shift from the individual market to short-term limited duration insurance in 2019. The departments estimate the majority of those who switch would be young and healthy and 90% would be unsubsidized. Once finalized, the Trump regulations will take effect 60 days upon publication.
- Short-term limited duration health plans in CA. According to DMHC, the Knox-Keene Act (California law that regulates health plans) is silent on the matter of short-term limited duration health insurance but these policies do not comply with many minimum standards required under the Knox-Keene Act. However, these policies do appear to be subject to some type of regulation under the CDI. CDI indicates that gaps in the intersection of federal and California law make some of these policies arguably permissible in California. CDI indicates that many existing state insurance mandates apply to these policies. In a December 8, 2017 Los Angeles Times article, Insurance Commissioner Dave Jones indicates that CDI estimates there are only a few thousand active short-term policies across the state. In the same article, a representative of eHealth.com, a private online health insurance marketplace, indicates that there are not many carriers willing to offer state residents short-term limited duration options.
- Related legislation. SB 1287 (Hernandez) pending in the Senate Rules Committee, states legislative intent to enact legislation that would regulate multiple employer welfare arrangements and other types of association health plans to the extent permitted under federal law, including ensuring that those plans meet minimum financial solvency and reporting requirements.
- Prior legislation. AB 1180 (Pan, Chapter 441, Statutes of 2013) makes inoperative several provisions in existing law that implement the health insurance laws of the federal Health Insurance Portability and Accountability Act of 1996 and additional provisions that provide former employees rights to convert their group health insurance coverage to individual market coverage without medical underwriting, because of the ACA. Establishes notification requirements informing individuals affected by AB 1180 of health insurance available in 2014 under the ACA.
- Support. Health Access California writes that short-term insurance shortchanges consumers in two ways. First, consumers are lured to these products by cheaper premiums and secondly, short-term insurance plans lack important ACA protections. Without this bill, the pending federal rule will relegate California’s individual insurance market back to the pre-ACA days when consumers were left without care because of loopholes that left those who need maternity care, chemotherapy, or prescription drugs behind. Proponents indicate that this bill would maintain the stability of California’s individual market by ensuring health coverage sold in California provides comprehensive benefits and consumer protections. Short-term insurance is bad for consumers because it lacks basic protections and essential health benefits that cover prescription drugs, maternity care, mental health, and other vital services. Kaiser Permanente supports this bill because short-term plans may cause healthier people to leave comprehensive coverage and choose an alternative plan in the individual or group market, which in turn will lead to market segmentation that will result in higher premiums. Kaiser writes that short-term insurance is detrimental to consumers and will destabilize the individual market in California, leading to premium increases.
- Opposition. Anthem Blue Cross opposes a strict prohibition on short-term limited duration health insurance and supports extending the permitted duration of short-term limited duration health insurance plans to 364 days per the proposed federal rule. Anthem Blue Cross believes, when used appropriately, these policies do serve an important purpose as an affordable source of coverage for individuals who are between plans and that 364 days of coverage is necessary in some cases, such as when an individual misses the deadline for open enrollment, or is between jobs and cannot afford COBRA (COBRA is the Consolidated Omnibus Budget Reconciliation Act, which requires a health plan to offer an outgoing employee continued coverage but without the employer’s premium subsidy). The California Association of Health Underwriters (CAHU) believes this bill removes a critical tool for coverage and leaves affected individuals with no option other than to utilize costly emergency services should a need arise. CAHU requests amendments making these plans available to those who are otherwise legally prohibited from purchasing comprehensive coverage and limited until the next open enrollment.
SUPPORT AND OPPOSITION:
Support: Health Access California (sponsor)
American Cancer Society Cancer Action Network
APLA Health
Asian Law Alliance
Blue Shield of California
California Health Professional Student Alliance
California Immigrant Policy Center
California Labor Federation
California Physicians Alliance
California Rural Legal Assistance Foundation
ChapCare
Children's Defense Fund California
Consumers Union
Disability Rights California
Equality California
Kaiser Permanente
Latino Coalition for a Healthy California
Maternal and Child Health Access
National Health Law Program
San Francisco AIDS Foundation
Western Center on Law & Poverty
Oppose: Anthem Blue Cross
California Association of Health Underwriters
-- END --
Discussed in Hearing
1MIN
Senate Floor
7MIN
Assembly Floor
35SEC
Assembly Floor
1MIN
Assembly Standing Committee on Appropriations
12MIN
Assembly Standing Committee on Health
3MIN
Senate Floor
34MIN
Senate Standing Committee on Education
34MIN
Senate Standing Committee on Health
Bill Author
Bill Co-Author(s):