Bill Text: CA AB1962 | 2013-2014 | Regular Session | Chaptered
Bill Title: Dental plans: medical loss ratios: reports.
Spectrum: Slight Partisan Bill (Democrat 10-4)
Status: (Passed) 2014-09-25 - Chaptered by Secretary of State - Chapter 567, Statutes of 2014. [AB1962 Detail]
Download: California-2013-AB1962-Chaptered.html
BILL NUMBER: AB 1962 CHAPTERED
BILL TEXT
CHAPTER 567
FILED WITH SECRETARY OF STATE SEPTEMBER 25, 2014
APPROVED BY GOVERNOR SEPTEMBER 25, 2014
PASSED THE SENATE AUGUST 21, 2014
PASSED THE ASSEMBLY AUGUST 22, 2014
AMENDED IN SENATE AUGUST 4, 2014
AMENDED IN ASSEMBLY MAY 23, 2014
AMENDED IN ASSEMBLY APRIL 22, 2014
INTRODUCED BY Assembly Member Skinner
(Coauthors: Assembly Members Allen, Bigelow, Bocanegra, Bonilla,
Bonta, Gonzalez, Holden, Nestande, Pan, Waldron, and Weber)
(Coauthors: Senators Berryhill and Mitchell)
FEBRUARY 19, 2014
An act to add Section 1367.004 to the Health and Safety Code, and
to add Section 10112.26 to the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 1962, Skinner. Dental plans: medical loss ratios: reports.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires a health care service plan or health insurer to
comply with specified minimum medical loss ratios and requires a
plan or insurer to provide an annual rebate to enrollees and insureds
if the ratio of the amount of premium revenue expended by the plan
or insurer on specified costs to the total amount of premium revenue
is less than a certain percentage. Existing law specifies that these
requirements do not apply to specialized health care service plan
contracts or specialized health insurance policies.
This bill would require health care services plans that issue,
sell, renew, or offer specialized dental health care service plan
contracts and health insurers that issue, sell, renew, or offer
specialized dental health insurance policies to, no later than
September 30, 2015, and each year thereafter, file a report, to be
known as the MLR annual report, with the departments that contains
the same information required in the 2013 federal Medical Loss Ratio
(MLR) Annual Reporting Form. The bill would require the Department of
Managed Health Care or the Department of Insurance, as applicable
and, if a financial examination is determined to be necessary to
verify the representations in the MLR annual report, to provide the
health care service plan or health insurer with a notification before
conducting the examination, and would require the plan or insurer to
electronically submit to the appropriate department specified
requested records, books, and papers. The bill would declare the
intent of the Legislature that the data reported pursuant to these
provisions be considered by the Legislature in adopting a medical
loss ratio standard for health care service plans and specialized
health insurance policies that cover dental services that would take
effect no later than January 1, 2018. The bill would authorize the
Department of Managed Health Care and the Department of Insurance,
until January 1, 2018, to issue guidance to health care service plans
and health insurers of specialized health insurance policies subject
to these provisions regarding compliance with these provisions, as
specified. Because a willful violation of the bill's requirements by
a health care service plan would be a crime, the bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1367.004 is added to the Health and Safety
Code, to read:
1367.004. (a) A health care service plan that issues, sells,
renews, or offers a specialized health care service plan contract
covering dental services shall, no later than September 30, 2015, and
each year thereafter, file a report, which shall be known as the MLR
annual report, with the department that is organized by market and
product type and contains the same information required in the 2013
federal Medical Loss Ratio (MLR) Annual Reporting Form (CMS-10418).
(b) The MLR reporting year shall be for the calendar year during
which dental coverage is provided by the plan. All terms used in the
MLR annual report shall have the same meaning as used in the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-18), Part 158
(commencing with 158.101) of Title 45 of the Code of Federal
Regulations, and Section 1367.003.
(c) If the director decides to conduct a financial examination, as
described in Section 1382, because the director finds it necessary
to verify the health care service plan's representations in the MLR
annual report, the department shall provide the health care service
plan with a notification 30 days before the commencement of the
financial examination.
(d) The health care service plan shall have 30 days from the date
of notification to electronically submit to the department all
requested records, books, and papers specified in subdivision (a) of
Section 1381. The director may extend the time for a health care
service plan to comply with this subdivision upon a finding of good
cause.
(e) The department shall make available to the public all of the
data provided to the department pursuant to this section.
(f) This section does not apply to a health care service plan
contract issued, sold, renewed, or offered for health care services
or coverage provided in the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code), the Healthy Families Program (Part 6.2
(commencing with Section 12693) of Division 2 of the Insurance Code),
the Access for Infants and Mothers Program (Part 6.3 (commencing
with Section 12695) of Division 2 of the Insurance Code), the
California Major Risk Medical Insurance Program (Part 6.5 (commencing
with Section 12700) of Division 2 of the Insurance Code), or the
Federal Temporary High Risk Insurance Pool (Part 6.6 (commencing with
Section 12739.5) of Division 2 of the Insurance Code), to the extent
consistent with the federal Patient Protection and Affordable Care
Act (Public Law 111-148).
(g) It is the intent of the Legislature that the data reported
pursuant to this section be considered by the Legislature in adopting
a medical loss ratio standard for health care service plans that
cover dental services that would take effect no later than January 1,
2018.
(h) Until January 1, 2018, the director may issue guidance to
health care service plans subject to this section regarding
compliance with this section. This guidance 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). Any guidance issued pursuant to this subdivision shall be
effective only until the director adopts regulations pursuant to the
Administrative Procedure Act. The department shall consult with the
Department of Insurance in issuing guidance pursuant to this
subdivision.
SEC. 2. Section 10112.26 is added to the Insurance Code, to read:
10112.26. (a) A health insurer that issues, sells, renews, or
offers a specialized health insurance policy covering dental services
shall, no later than September 30, 2015, and each year thereafter,
file a report, which shall be known as the MLR annual report, with
the department that is organized by market and product type and
contains the same information required in the 2013 federal Medical
Loss Ratio (MLR) Annual Reporting Form (CMS-10418).
(b) The MLR reporting year shall be for the calendar year during
which dental coverage is provided by the plan. All terms used in the
MLR annual report shall have the same meaning as used in the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-18) and Part 158
(commencing with 158.101) of Title 45 of the Code of Federal
Regulations.
(c) If the commissioner decides to conduct an examination, as
described in Section 730, because the commissioner finds it necessary
to verify the health insurer's representations in the MLR annual
report, the department shall provide the health insurer with a
notification 30 days before the commencement of the examination.
(d) The health insurer shall have 30 days from the date of
notification to electronically submit to the department all requested
records, books, and papers specified in subdivision (a) of Section
733. The commissioner may extend the time for a health insurer to
comply with this subdivision upon a finding of good cause.
(e) The department shall make available to the public all of the
data provided to the department pursuant to this section.
(f) This section does not apply to an insurance policy issued,
sold, renewed, or offered for health care services or coverage
provided in the Medi-Cal program (Chapter 7 (commencing with Section
14000) of Part 3 of Division 9 of the Welfare and Institutions Code),
the Healthy Families Program (Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code), the Access for Infants
and Mothers Program (Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code), the California Major Risk Medical
Insurance Program (Part 6.5 (commencing with Section 12700) of
Division 2 of the Insurance Code), or the Federal Temporary High Risk
Insurance Pool (Part 6.6 (commencing with Section 12739.5) of
Division 2 of the Insurance Code), to the extent consistent with the
federal Patient Protection and Affordable Care Act (Public Law
111-148).
(g) This section shall not apply to disability insurance for
covered benefits in the single specialized area of dental-only health
care that pays benefits on a fixed benefit, cash payment only basis.
(h) It is the intent of the Legislature that the data reported
pursuant to this section be considered by the Legislature in adopting
a medical loss ratio standard for specialized health insurance
policies that cover dental services that would take effect no later
than January 1, 2018.
(i) Until January 1, 2018, the department may issue guidance to
health insurers of specialized health insurance policies subject to
this section regarding compliance with this section. This guidance
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). Any guidance issued pursuant to this
subdivision shall be effective only until the department adopts
regulations pursuant to the Administrative Procedure Act. The
department shall consult with the Department of Managed Health Care
in issuing guidance pursuant to this subdivision.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
