Bill Text: CA AB786 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Insurance: retained-asset accounts.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2010-08-19 - Read second time. To third reading. Re-referred to Com. on RLS. pursuant to Senate Rule 29.10 (c) . [AB786 Detail]

Download: California-2009-AB786-Amended.html

---

BILL NUMBER: AB 786	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 2, 2009
	AMENDED IN ASSEMBLY  APRIL 22, 2009

INTRODUCED BY   Assembly Member Jones

                        FEBRUARY 26, 2009

   An act to add Sections 1399.819 and 127664.5 to the Health and
Safety Code, and to add Section 10903 to the Insurance Code, relating
to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 786, as amended, Jones.  Individual health care coverage:
coverage choice categories.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), 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 health care service plans and health
insurers that offer contracts or policies to individuals to comply
with specified requirements.
   This bill would require, by September 1, 2010, the Department of
Managed Health Care and the Department of Insurance to jointly, by
regulation, develop a system to categorize all health care service
plan contracts and health insurance policies offered and sold to
individuals into  5   6  coverage choice
categories that meet specified requirements. The bill would require 4
of those categories to consist of contracts and policies that meet
the requirements imposed under the Knox-Keene Act, and would require
the fifth  category   and sixth categories 
to consist solely of health insurance policies that do  not
 meet the Knox-Keene Act requirements  , as specified 
. The bill would require a health insurer offering a policy in that
fifth  or sixth  category to include a specified notice in
materials used to market the policy and in the offer of coverage
under the policy. The bill would require individual health care
service plan contracts and individual health insurance policies
offered or sold on or after January 1, 2011, to contain a maximum
dollar limit on out-of-pocket costs for covered  benefits
  services by   in-   network
providers  , as specified. The bill would authorize health care
service plans and health insurers to offer products in any coverage
choice category subject to specified restrictions. The bill would
also require health care service plans and health insurers to
establish prices for the products offered to individuals that reflect
a reasonable continuum between the products offered in the coverage
choice category with the lowest level of benefits and the products
offered in the coverage choice category with the highest level of
benefits. The bill would require the Department of Managed Health
Care and the Department of Insurance to develop a notice providing
information on the coverage choice categories and would require this
notice to be provided with the marketing, purchase, and renewal of
individual contracts and policies, as specified. The bill would
require the Director of the Department of Managed Health Care and the
Insurance Commissioner to annually report on the contracts and
policies offered in each coverage choice category and on the
enrollment in those contracts and policies. The bill would also
require, commencing January 1, 2013, and every 3 years thereafter,
the director and the commissioner to jointly determine whether the
coverage choice categories should be revised to meet the needs of
consumers. The bill would enact other related provisions.
   Because a willful violation of the bill's requirements relative to
health care service plans would be a crime, the bill would impose a
state-mandated local program.
   Existing law requests the University of California to establish
the California Health Benefit Review Program to assess legislation
proposing to mandate or repeal a benefit or service, as defined, and
to prepare a written analysis in accordance with specified criteria.
   This bill would request the University of California, as part of
that program, to prepare a written analysis with relevant data on,
among other things, the health insurance and health care service plan
products sold in the individual market. The bill would request the
University of California to provide this report 3 months prior to the
implementation of the bill's other provisions and would authorize
the Director of the Department of Managed Health Care  ,  in
consultation with the Insurance Commissioner  ,  to request
that analysis prior to specified annual reports and triennial
reviews. The bill would also require those departments to require
data from health care service plans and health insurers in order to
assist the University of California in fulfilling these
responsibilities.
   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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1399.819 is added to the Health and Safety
Code, to read:
   1399.819.  (a) On or before September 1, 2010, the department and
the Department of Insurance shall jointly, by regulation,  and in
consultation with stakeholders,  develop a system to categorize
all health care service plan contracts and health insurance policies
offered and sold to individuals pursuant to this chapter and Part 2
(commencing with Section 10110) of Division 2 of the Insurance Code
into  five   the following six  coverage
 choice categories. In developing these categories, the
departments shall develop four categories applicable to both
individual health care service plan contracts and individual health
insurance policies. These four categories shall consist of contracts
and policies that meet the requirements of this chapter and that, at
a minimum, include basic health care services as defined in Section
1345. The departments shall also develop a fifth category 
 choice categories:  
   (1) Four categories applicable to both individual health care
service plan contracts and individual health insurance policies that
meet the requirement of this chapter, including, but not limited to,
providing coverage for basic health care services as defined in
Section 1345. 
    (2)     A fifth and sixth category 
applicable only to individual health insurance policies subject to
the jurisdiction of the Department of Insurance.  This fifth
category shall   These fifth and sixth categories shall
either  be established based on the highest cost sharing and the
lowest benefit levels among the  five   six
 categories and shall apply to individual health insurance
policies where the benefit levels and cost sharing requirements do
not otherwise meet the requirements  of this chapter. These
coverage choice categories shall do all of   of this
chapter, or shall be established based on benefit limits that are not
permi   ssible under this chapter regardless of cost
sharing or comprehensiveness of coverage. 
    (b)     The coverage choice categories
established pursuant to this section shall do all of  the
following:
   (1) Reflect a reasonable continuum between the coverage choice
category with the lowest level of health care benefits and the
coverage choice category with the highest level of health care
benefits based on the actuarial value of each product.
   (2) Permit reasonable benefit variation within each coverage
choice category.
   (3) For the four categories applicable to both health care service
plan contracts and health insurance policies, the director shall
coordinate with the Insurance Commissioner to ensure consistent
interpretation across products and markets and ease of comparison for
consumers.
   (4) Within each coverage choice category, include one standard
health maintenance organization (HMO) product and one standard
preferred provider organization (PPO) product, as defined by
regulation, except for  the fifth category with the highest
cost sharing and the lowest benefit levels   the fifth
and sixth categories  applicable only to health insurance
policies, which shall include a standard preferred provider
organization health insurance product and no standard health care
service plan product.
   (5) Within each coverage choice category, have a maximum dollar
limit on out-of-pocket costs, including, but not limited to,
copayments, coinsurance, and deductibles, for covered 
benefits   services by in-network providers. Maximum
permissible out-of-pocket cost limits shall be indexed to and
automatically increase annually with the medical consumer price index
 .
   (6) Use standard definitions and terminology for covered benefits
and cost sharing between health care service plans and health
insurers in the same marketplace regardless of licensure.
   (7) Be developed by taking into account any written analysis
provided by the University of California pursuant to Section
127664.5. 
   (b) 
    (c)  (1) In establishing the  five 
 six  coverage choice categories, the department and the
Department of Insurance shall establish the third category as the
midpoint of the individual market for contracts and policies that
cover medical, surgical, and hospital expenses and that meet the
coverage requirements of existing applicable law.
   (2) The first category shall provide the most comprehensive
benefits and the lowest cost sharing, shall be comparable to coverage
provided by large employers to their employees, and shall be
described as such.
   (3) The second category shall provide benefits and cost sharing
that fall between the first and the third categories.
   (4) The fourth category, which shall apply to both health care
service plan contracts and health insurance policies, shall have the
highest cost sharing permitted for health care service plan contracts
under this chapter.
   (5) The fifth  category   and sixth
categories  , which shall apply only to health insurance
policies, shall  either  have the highest cost sharing and
least comprehensive benefits among the  five categories
  six categories or have benefit limits that are not
permitted under this chapter  , shall include coverage for
medical, surgical, and hospital expenses, and shall meet the minimum
benefit standards applicable to health insurance policies under the
Insurance Code. 
   (c) 
    (d)  The regulations developed by the department and the
Department of Insurance pursuant to this section shall identify and
require the submission of any information needed to categorize each
health care service plan contract and health insurance policy subject
to this section. 
   (d) 
    (e)  All health care service plan contracts offered or
sold to individuals on or after January 1, 2011, shall contain a
maximum dollar limit on out-of-pocket costs, including, but not
limited to, copayments, coinsurance, and deductibles, for covered
 benefits   services by in-network providers.
Maximum permissible out-of-pocket cost limits shall be indexed to and
automatically increase annually with the medical consumer price
index  . 
   (e) 
    (f)  All health care service plans shall submit filings
no later than April 1, 2011, for all individual health care service
plan contracts to be offered or sold on or after that date, and
thereafter any additional individual health care plan contracts shall
be filed with the department.  At the time of submission of a
contract pursuant to this subdivision, a health care service plan may
suggest to the director the category for which the plan designed the
contract.  The director shall categorize each individual health
care service plan contract offered by a plan into the appropriate
coverage choice category within 90 days of the date the contract is
filed pursuant to this section. A health care service plan shall not
offer or sell an individual health care service plan contract until
the director has categorized the contract pursuant to this
subdivision. 
   (f) 
    (g)  To facilitate accurate information about consumer
choices, a health care service plan may offer products in any
coverage choice category. However, if a plan offers a product in
 the fifth   either the fifth or sixth 
category, it shall also offer the standard product in  the
fifth  either the fifth or sixth  category, the
standard product in either the first or second category, and the
standard product in the third category. Every plan shall offer at
least the standard product in the third category, except that a plan
that offers the standard product in either the first or second
category shall not be required to offer products in the third,
fourth,  or fifth   fifth, or sixth 
category. For purposes of this subdivision, "standard product" means
the product developed pursuant to paragraph (4) of subdivision (a). A
plan may meet its obligations under this subdivision with products
filed with and approved by the department as well as products filed
with and approved by the Department of Insurance  for a
subsidiary or an affiliate of the plan  . 
   (g) 
    (h)  To facilitate consumer comparison shopping, the
department and the Department of Insurance shall develop a notice
that provides information about the coverage choice categories
developed pursuant to this section, including the range of cost
sharing and the benefits and services provided in each category,
including any variation in those benefits and services. For each
product, the notice shall include the percentage of expense paid by
the coverage, the estimated annual out-of-pocket cost and the
estimated total annual cost, including both premium and out-of-pocket
costs for persons with average health care costs and persons with
high health care needs. A health care service plan, solicitor, or
solicitor firm shall provide this notice when marketing any
individual health care service plan contract. The notice shall also
accompany the purchase and renewal of an individual health care
service plan contract. With the agreement of the consumer, the notice
may be provided electronically. 
   (h) 
    (i)   (1)   A health care service plan
shall establish prices for its products that reflect a reasonable
continuum between the products offered in the coverage choice
category with the lowest level of benefits and the products offered
in the coverage choice category with the highest level of benefits.
 A 
    (2)     A  health care service plan
shall not establish a standard risk rate for a product in a coverage
choice category at a lower rate than a product offered in a lower
coverage choice category for a consumer of the same age and the same
risk rate living in the same geographic region. For purposes of this
 subdivision   paragraph  , "geographic
region" shall mean the geographic regions established pursuant to
paragraph (3) of subdivision (k) of Section 1357.  This paragraph
shall not apply to a conversion contract offered pursuant to Section
1373.6 or to a contract offered to a   federally eligible
defined individual.  
   (i) 
    (j)  The director shall annually report on the health
care service plan contracts offered by plans in each coverage choice
category pursuant to this section and on the enrollment in those
contracts within each coverage choice category. Commencing January 1,
2013, and every three years thereafter, the director and the
Insurance Commissioner shall jointly determine whether the coverage
choice categories should be revised to meet the needs of consumers.

   (j) 
    (k)  The department shall require data from health care
service plans in order to assist the University of California in
fulfilling the responsibilities of Section 127664.5 and shall
promptly provide that data to the University of California. 
   (k) 
    (l)  This section shall not apply to Medicare supplement
plans or to coverage offered by specialized health care service
plans or government-sponsored programs. 
   (m) This section shall not apply to an individual health care
service plan contract renewal issued prior to April 1, 2011. 
  SEC. 2.  Section 127664.5 is added to the Health and Safety Code,
to read:
   127664.5.  (a) In order to assist the Department of Managed Health
Care and the Department of Insurance with the implementation of
Section 1399.819 of this code and Section 10903 of the Insurance
Code, the Legislature requests the University of California, as part
of the California Health Benefit Review Program established pursuant
to Section 127660, to prepare a written analysis with relevant data
on all of the following:
   (1) The health care service plan and health insurance products
that are sold in the individual market.
   (2) The benefits and services covered by the products described in
paragraph (1), including any limitations or exclusions.
   (3) The cost sharing applicable to the products described in
paragraph (1), including deductibles, copayments, coinsurance,
maximum out-of-pocket limits, and other limits or exclusions that
require individual consumers to pay for basic health care services in
whole or in part.
   (4) The distribution of health care service plan and health
insurance products purchased by individuals in terms of the benefits
and services included and the cost sharing involved.
   (5) The share of the individual health care coverage market that
is short-term coverage, conversion coverage, renewal of existing
coverage, or coverage sold to a person not previously covered by
individual health care coverage.
   (b) In providing the data described in subdivision (a), the
University of California is requested to distinguish between products
provided by entities regulated by the Department of Managed Health
Care and those provided by entities regulated by the Department of
Insurance.
   (c) The Legislature requests that the written analysis described
in subdivision (a) be provided three months prior to the
implementation of Section 1399.819 of this code and Section 10903 of
the Insurance Code.
   (d) The Director of the Department of Managed Health Care  ,
 in consultation with the Insurance Commissioner  , 
shall request the University of California to provide the written
analysis described in subdivision (a) prior to the annual reports and
triennial reviews required by Section 1399.819 of this code and
Section 10903 of the Insurance Code.
   (e) The Department of Managed Health Care and the Department of
Insurance shall assist the University of California by requiring and
collecting data from health care service plans and health insurers in
order to fulfill the responsibilities of this section and of Section
1399.819 of this code and Section 10903 of the Insurance Code.
   (f) The work of the University of California in providing the
written analyses specified in this section shall be supported by
moneys in the fund established pursuant to Section 127662.
  SEC. 3.  Section 10903 is added to the Insurance Code, to read:
   10903.  (a) On or before September 1, 2010, the department and the
Department of Managed Health Care shall jointly, by regulation,
and in consultation with stakeholders,  develop a system to
categorize all health insurance policies and health care service plan
contracts offered and sold to individuals pursuant to this part and
Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code  into five coverage choice categories.
In developing these categories, the departments shall develop four
categories applicable to both individual health care service plan
contracts and individual health insurance policies. These four
categories shall consist of contracts and policies that meet the
requirements of the Knox-Keene Health Care Service Plan Act of 1975
(Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code) and that, at a minimum, include basic health
care services as defined in Section 1345 of the Health and Safety
Code. The departments shall also develop a fifth category 
 into the following six coverage choice categories:  
   (1) Four categories applicable to both individual health care
service plan contracts and individual health insurance policies that
meet the requirement of the Knox-Keene Health Care Service Plan Act
of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of
the Health and Safety Code), including, but not limited to, providing
coverage for basic health care services as defined in Section 1345
of the Health and Safety Code. 
    (2)     A fifth and sixth category 
applicable only to individual health insurance policies subject to
the jurisdiction of the  Department of Insurance. This fifth
category shall   department. These fifth and sixth
categories shall either  be established based on the highest
cost sharing and the lowest benefit levels among the  five
  six  categories and shall apply to individual
health insurance policies where the benefit levels and cost sharing
requirements would not otherwise meet the requirements of the
Knox-Keene Health Care Service Plan Act of  1975. These
coverage choice categories shall do all of the   1975,
or shall be established based on benefit limits that are not
permissible under the Knox-Keene Health Care Service Plan Act of 1975
regardless of cost sharing or comprehensiveness of coverage. 
    (b)    The coverage choice categories
established pursuant to this section shall do all of the 
following:
   (1) Reflect a reasonable continuum between the coverage choice
category with the lowest level of health care benefits and the
coverage choice category with the highest level of health care
benefits based upon the actuarial value of each product.
   (2) Permit reasonable benefit variation within each coverage
choice category.
   (3) For the four categories applicable to both health care service
plan contracts and health insurance policies, the commissioner shall
coordinate with the Director of  the Department of  Managed
Health Care to ensure consistent interpretation across products and
markets and ease of comparison for consumers.
   (4) Within each coverage choice category, include one standard
health maintenance organization (HMO) product, and one standard
preferred provider organization (PPO) product, as defined by 
regulation, except for the fifth category with the highest cost
sharing and the lowest benefit levels applicable only to health
insurance policies, which   regulation, except for the
fifth and sixth categories applicable only to health insurance
policies, which shall  include a standard preferred provider
organization health insurance product and no standard health care
service  plan  product.
   (5) Within each coverage choice category, have a maximum dollar
limit on out-of-pocket costs, including, but not limited to,
copayments, coinsurance, and deductibles, for covered 
benefits   services by in-network providers. Maximum
permissible out-of-pocket cost limits shall be indexed to and
automatically increase annually with the medical consumer price index
 .
   (6) Use standard definitions and terminology for covered benefits
and cost sharing between health insurers and health care service
plans in the same marketplace regardless of licensure.
   (7) Be developed by taking into account any written analysis
provided by the University of California pursuant to Section 127664.5
of the Health and Safety Code. 
   (b) 
    (c)  (1) In establishing the  five 
 six  coverage choice categories, the department and the
Department of Managed Health Care shall establish the third category
as the midpoint of the individual market for contracts and policies
that cover medical, surgical, and hospital expenses and that meet the
coverage requirements of existing applicable law.
   (2) The first category shall provide the most comprehensive
benefits and the lowest cost sharing, shall be comparable to coverage
provided by large employers to their employees, and shall be
described as such.
   (3) The second category shall provide benefits and cost sharing
that fall between the first and the third categories.
   (4) The fourth category, which shall apply to both health care
service plan contracts and health insurance policies, shall have the
highest cost sharing permitted for health care service plan contracts
under the Knox-Keene Health Care Service Plan Act of 1975 
(chapter   (Chapter  2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code).
   (5) The fifth  category   and sixth
categories  , which shall apply only to health insurance
policies, shall  either  have the highest cost sharing and
least comprehensive benefits among the  five categories
 six categories or have benefit limits that are not
permitted under the Knox-Keene Health Care Service Plan Act of 1975
(Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code)  , shall include coverage for medical,
surgical, and hospital expenses, and shall meet the minimum benefit
standards applicable to health insurance policies under this code.

   (c) 
    (d)  The regulations developed by the department and the
Department of Managed Health Care pursuant to this section shall
identify and require the submission of any information needed to
categorize each health insurance policy and health care service plan
contract subject to this section. 
   (d) 
    (e)  All health insurance policies offered or sold to
individuals on or after January 1, 2011, shall contain a maximum
dollar limit on out-of-pocket costs, including, but not limited to,
copayments, coinsurance, and deductibles, for covered 
benefits   services by in-network providers  and,
shall, at a minimum, cover hospital, medical, and surgical expenses,
and meet existing coverage requirements applicable to health
insurance policies under this code. Effective January 1, 2011, for
the  fifth coverage   sixth coverage choice
 category that applies only to health insurance policies, the
maximum out-of-pocket expenditure, including copayments, coinsurance,
and deductibles,  may be up to but  shall not exceed ten
thousand dollars  ($10,000) per year. The commissioner shall
adjust this amount annually according to changes in the California
Consumer Price Index.   ($10,000) per year for covered
services by in-network providers. Maximum permissible out-of-pocket
cost limits shall be indexed to and automatically increase with the
medical consumer price index.  
   (e) 
    (f)  All health insurers shall submit the filings no
later than April 1, 2011, for all individual health insurance
policies to be offered or sold on or after that date, and thereafter
any additional individual health insurance policies shall be filed
with the commissioner.  At the time of submission of a policy
pursuant to this subdivision, a health insurer may suggest to the
commissioner the category for which the insurer designed the policy.
 The commissioner shall categorize each individual health
insurance policy offered by a health insurer into the appropriate
coverage choice category within 90 days of the date the policy is
filed pursuant to this section. A health insurer shall not offer or
sell an individual health insurance policy until the commissioner has
categorized the policy pursuant to this subdivision. 
   (f) 
    (g)  To facilitate accurate information about consumer
choices, a health insurer may offer health insurance products in any
coverage choice category. However, if a health insurer offers a
health insurance product in  the fifth   either
the fifth or sixth  category, it shall also offer the standard
product in  the fifth   either the fifth or
sixth  category, the standard product in either the first or
second category, and the standard product in the third category.
Every insurer shall offer at least the standard product in the third
category, except that an insurer that offers the standard product in
either the first or second category shall not be required to offer
products in the third, fourth,  or fifth  
fifth, or sixth  category. For purposes of this subdivision,
"standard product" means the product developed pursuant to paragraph
(4) of subdivision (a). An insurer may meet its obligations under
this subdivision with products filed with and approved by the
department as well as products filed with and approved by the
Department of Managed Health Care  for a subsidiary or an
affiliate of the insurer  . 
   (g) 
    (h)  To facilitate consumer comparison shopping, the
department and the Department of Managed Health Care shall develop a
notice that provides information about the coverage choice categories
developed pursuant to this section, including the range of cost
sharing and the benefits and services provided in each category,
including any variation in those benefits and services. For each
product, the notice shall include the percentage of expense paid by
the coverage, the estimated annual out-of-pocket cost and the
estimated total annual cost, including both premium and out-of-pocket
costs for persons with average health care costs and persons with
high health care needs. A health insurer, broker, or agent shall
provide this notice when marketing any individual health insurance
policy. The notice shall also accompany the purchase and renewal of
an individual health insurance policy. With the agreement of the
consumer, the notice may be provided electronically. 
   (h) 
    (i)  An insurer selling a policy under the fifth  or
sixth  category shall include the following disclosure in
14-point type in all materials used to market the policy and in the
offer of coverage under the policy:
   "Insurance products in this category include significant limits on
benefits and the health care services that are covered. If you have
a serious injury, a serious illness such as a heart attack or cancer,
or ongoing health care costs associated with a chronic condition
such as diabetes or heart disease, coverage under this policy may not
pay for a substantial share of the costs of doctors, hospitals, or
other treatments. You may face additional out-of-pocket costs for
doctors, hospitals, and other services even if you have met your
deductible or out-of-pocket maximum. This product does not provide
maternity coverage. Please examine this policy carefully before
purchasing." 
   (i) 
    (j)   (1)    A health insurer shall
establish prices for its products that reflect a reasonable continuum
between the products offered in the coverage choice category with
the lowest level of benefits and the products offered in the coverage
choice category with the highest level of benefits.  A

    (2)     A  health insurer shall not
establish a standard risk rate for a product in a coverage choice
category at a lower rate than a product offered in a lower coverage
choice category for a consumer of the same age and the same risk rate
living in the same geographic region. For purposes of this 
subdivision   paragraph  , "geographic region"
shall mean the geographic regions established pursuant to paragraph
(3) of subdivision (v) of Section
            10700.  This paragraph shall not apply to a
conversion policy offered pursuant to Section 12682.1 or to a policy
offered to a federally eligible defined individual.  
   (j) 
    (k)  The commissioner shall annually report on the
health insurance policies offered by health insurers in each coverage
choice category pursuant to this section and on the enrollment in
those policies within each coverage choice category. Commencing
January 1, 2013, and every three years thereafter, the commissioner
and the Director of the Department of Managed Health Care shall
jointly determine whether the coverage choice categories should be
revised to meet the needs of consumers. 
   (k) 
    (l)  The department shall require data from health
insurers in order to assist the University of California in
fulfilling the responsibilities of Section 127664.5 of the Health and
Safety Code and shall promptly provide that data to the University
of California. 
   (l) 
    (m)  Nothing in this section shall be construed to limit
disability insurance, including, but not limited to, hospital
indemnity, accident only, and specified disease insurance that pays
benefits on a fixed benefit, cash payment only basis, from being sold
as supplemental insurance. 
   (m) 
    (n)  This section shall not apply to Medicare
supplement, Tricare supplement, or CHAMPUS supplement insurance, to
specialized health insurance policies, as defined in subdivision (c)
of Section 106, or to coverage offered by government-sponsored
programs. 
   (o) This section shall not apply to an individual health insurance
policy renewal issued prior to April 1, 2011. 
  SEC. 4.  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.