BILL NUMBER: SB 951	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 24, 2012
	AMENDED IN ASSEMBLY  AUGUST 20, 2012
	AMENDED IN SENATE  APRIL 16, 2012
	AMENDED IN SENATE  MARCH 26, 2012

INTRODUCED BY   Senator Hernandez
    (   Principal coauthor:   Assembly Member
  Monning   )

                        JANUARY 5, 2012

   An act  to add Section 1367.005 to the Health and Safety
Code, and  to add Section 10112.27 to the Insurance Code,
relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 951, as amended, Hernandez. Health care coverage: essential
health benefits.
   Commencing January 1, 2014, existing law, the federal Patient
Protection and Affordable Care Act (PPACA), requires a health
insurance issuer that offers coverage in the small group or
individual market to ensure that such coverage includes the essential
health benefits package, as defined. PPACA requires each state to,
by January 1, 2014, establish an American Health Benefit Exchange
that facilitates the purchase of qualified health plans by qualified
individuals and qualified small employers. PPACA defines a qualified
health plan as a plan that, among other requirements, provides an
essential health benefits package. Existing state law creates the
California Health Benefit Exchange (the Exchange) to facilitate the
purchase of qualified health plans by qualified individuals and
qualified small employers by January 1, 2014.
    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 health care
service plan contracts and   and requires  health
insurance policies to cover various benefits.
   This bill would require an individual or small group 
health care service plan contract or  health insurance
policy issued, amended, or renewed on or after January 1, 2014, to
cover essential health benefits, which would be defined to include
the health benefits covered by particular benchmark plans. The bill
would  authorize a plan or insurer to place scope and
duration limits on those benefits, except as specified, provided that
the limits are not greater than   prohibit treatment
limits imposed on these benefits from exceeding  the 
corresponding  limits imposed by the benchmark plans and would
generally prohibit  a plan or   an  insurer
from making substitutions of the benefits required to be covered.
The bill would specify that these provisions apply regardless of
whether the  contract or  policy is offered inside
or outside the Exchange but would provide that they do not apply to
grandfathered plans or plans that cover  only 
excepted benefits, as specified. The bill would prohibit a 
health care service plan or  health insurer, when 
issuing, delivering, renewing,  offering, selling, or marketing
a  plan contract or  policy, from indicating or
implying that the  contract or  policy covers
essential health benefits unless the  contract or 
policy covers essential health benefits as provided in the bill. The
bill would  authorize the Department of Insurance to adopt
emergency regulations implementing these provisions until March 1,
2016, and  enact other related provisions.
   These provisions would only be implemented to the extent essential
health benefits are required pursuant to PPACA.  The bill would
provide that it shall become operative only if AB 1453 is also
enacted.  
   Because a willful violation of the bill's provisions with respect
to health care service plans 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. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  yes   no  .


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

  SECTION 1.  The Legislature hereby finds and declares the
following:
   (a) Commencing January 1, 2014, the federal Patient Protection and
Affordable Care Act (PPACA) requires a health insurance issuer that
offers coverage to small employers or individuals, both inside and
outside of the California Health Benefit Exchange, with the exception
of grandfathered plans as defined under Section 1251 of PPACA, to
provide minimum coverage that includes essential health benefits, as
defined.
   (b) It is the intent of the Legislature to comply with federal law
and consistently implement the essential health benefits provisions
of PPACA and related federal guidance and regulations, by adopting
the uniform minimum essential benefits requirement in state-regulated
health care coverage regardless of whether the policy or contract is
regulated by the Department of Managed Health Care or the Department
of Insurance and regardless of whether the policy or contract is
offered to individuals or small employers inside or outside of the
California Health Benefit Exchange. 
  SEC. 2.    Section 1367.005 is added to the Health
and Safety Code, to read:
   1367.005.  (a) An individual or small group health care service
plan contract issued, amended, or renewed on or after January 1,
2014, shall, at a minimum, include coverage for essential health
benefits. For purposes of this section, "essential health benefits"
means all of the following:
   (1) (A) The health benefits covered by the Kaiser Foundation
Health Plan Small Group HMO 30 plan (federal health product
identification number 40513CA035) as this plan was offered during the
first quarter of 2012, including, but not limited to, all of the
following:
   (i) The health benefits covered by the plan within the categories
identified in subsection (b) of Section 1302 of PPACA, including, but
not limited to, ambulatory patient services, emergency services,
hospitalization, maternity and newborn care, mental health and
substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and wellness
services and chronic disease management, and pediatric services,
including oral and vision care.
   (ii) The health benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, including, but
not limited to, basic health care services required to be covered
pursuant to Section 1367, as defined in Section 1345 and in Section
1300.67 of Title 28 of the California Code of Regulations. These
benefits are required to be covered to the extent described in the
following sections: Sections 1367.002, 1367.06, and 1367.35
(preventive services for children); Section 1367.25 (prescription
drug coverage for contraceptives); Section 1367.45 (AIDS vaccine);
Section 1367.46 (HIV testing); Section 1367.51 (diabetes); Section
1367.54 (alpha feto protein testing); Section 1367.6 (breast cancer
screening); Section 1367.61 (prosthetics for laryngectomy); Section
1367.62 (maternity hospital stay); Section 1367.63 (reconstructive
surgery); Section 1367.635 (mastectomies); Section 1367.64 (prostate
cancer); Section 1367.65 (mammography); Section 1367.66 (cervical
cancer); Section 1367.665 (cancer screening tests); Section 1367.67
(osteoporosis); Section 1367.68 (surgical procedures for jaw bones);
Section 1367.71 (anesthesia for dental); Section 1367.9 (conditions
attributable to diethylstilbestrol); Section 1368.2 (hospice care);
Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency
response ambulance or ambulance transport services); subdivision (b)
of Section 1373 (sterilization operations or procedures); Section
1373.4 (inpatient hospital and ambulatory maternity); Section 1374.56
(phenylketonuria); Section 1374.17 (organ transplants for HIV);
Section 1374.72 (mental health parity); and Section 1374.73
(autism/behavioral health treatment).
   (iii) The health benefits covered by the plan that are not
otherwise required to be covered under this chapter, to the extent
required pursuant to Sections 1367.18, 1367.21, 1367.215, 1367.22,
1367.24, and 1367.25, and Section 1300.67.24 of Title 28 of the
California Code of Regulations, whether or not the health benefits
are specifically referenced in the plan contract.
   (B) Coverage of mental health and substance use disorder services
pursuant to this paragraph, along with any scope and duration limits
imposed on the benefits, shall be in compliance with the Paul
Wellstone and Pete Domenici Mental Health Parity and Addiction Equity
Act of 2008 (Public Law 110-343), and all binding rules,
regulations, or guidance issued pursuant to Section 2726 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).
   (2) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (1), coverage shall
also be provided as required by binding federal rules, regulations,
and guidance issued pursuant to Section 1302(b) of PPACA.
Habilitative services shall be covered under the same terms and
conditions applied to rehabilitative services under the plan
contract.
   (3) With respect to pediatric vision care, the same health
benefits for pediatric vision care covered under the Federal
Employees Dental and Vision Insurance Program vision plan with the
largest national enrollment as of the first quarter of 2012. The
pediatric vision care benefits covered pursuant to this paragraph
shall be in addition to, and shall not replace, any vision services
covered under the plan identified in paragraph (1).
   (4) With respect to pediatric oral care, the same health benefits
for pediatric oral care covered under the dental plan available to
subscribers of the Healthy Families Program in 2011-12, including the
provision of medically necessary orthodontic care provided pursuant
to the federal Children's Health Insurance Program Reauthorization
Act of 2009. The pediatric oral care benefits covered pursuant to
this paragraph shall be in addition to, and shall not replace, any
dental or orthodontic services covered under the plan identified in
paragraph (1).
   (5) Except as otherwise provided in subdivision (p), any other
benefits required to be covered under this chapter.
   (b) (1) Medically necessary health benefits described in this
section shall be covered subject to cost sharing approved by the
director and any limitations consistent with this section.
Limitations imposed on health benefits shall be no greater than the
limitations imposed by the corresponding plans identified in
subdivision (a).
   (2) A plan may place scope and duration limits on health benefits
described in this section, other than basic health care services
described in clause (ii) of subparagraph (A) of paragraph (1) of
subdivision (a), provided that the scope and duration limits are no
greater than the scope and duration limits imposed on those benefits
by the corresponding plans identified in subdivision (a).
   (c) Except as otherwise provided in subdivision (d), if it is
determined that a plan identified in subdivision (a), with respect to
benefits and services covered by a plan contract and any scope and
duration limits applied to those benefits and services pursuant to
the contract, is not fully in compliance with this chapter, the
identification of that plan pursuant to this section shall not be
construed to exempt the plan from full compliance with this chapter.
   (d) Notwithstanding subdivision (c) or any other provision of this
section, the home health services benefits covered under the plan
identified in paragraph (1) of subdivision (a) shall be deemed to not
be in conflict with this chapter.
   (e) Except as provided in subdivision (f), nothing in this section
shall be construed to permit a health care service plan to make
substitutions for the benefits required to be covered under this
section, regardless of whether those substitutions are actuarially
equivalent.
   (f) To the extent permitted under Section 1302 of PPACA and any
binding rules, regulations, or guidance issued pursuant to that
section, and to the extent that substitution would not create an
obligation for the state to defray costs for any individual, a plan
may substitute its prescription drug formulary for the formulary
provided under the plan identified in subdivision (a) as long as the
formulary complies with the sections referenced in clauses (ii) and
(iii) of subparagraph (A) of paragraph (1) of subdivision (a) that
apply to prescription drugs.
   (g) No health care service plan, or its agent, solicitor, or
representative, shall offer, market, represent, or sell any product,
contract, or discount arrangement as minimum coverage, or as
compliant with the essential health benefits requirement in federal
law, unless it meets all of the requirements of this section.
   (h) This section shall apply regardless of whether the plan
contract is offered inside or outside the California Health Benefit
Exchange created by Section 100500 of the Government Code.
   (i) A plan contract subject to this section shall comply with
Section 1367.001.
   (j) A plan contract subject to this section shall comply with
state and federal statutory and regulatory requirements regarding
nondiscrimination, including, but not limited to, Section 1365.5.
   (k) This section shall not be construed to prohibit a plan
contract from covering additional benefits, including, but not
limited to, spiritual care services that are tax deductible under
Section 213 of the Internal Revenue Code.
   (l) Subdivision (a) shall not apply to any of the following:
   (1) A specialized health care service plan contract.
   (2) A Medicare supplement plan.
   (3) A plan contract that qualifies as a grandfathered health plan
under Section 1251 of PPACA or any binding rules, regulations, or
guidance issued pursuant to that section.
   (m) Nothing in this section shall be implemented in a manner that
is inconsistent with, or conflicts with, a requirement of PPACA.
   (n) This section shall be implemented only to the extent essential
health benefits are required pursuant to PPACA.
   (o) An essential health benefit is required to be provided under
this section only to the extent that federal law or policy does not
require the state to defray the costs of the benefit.
   (p) A plan is not required to cover, under this section, changes
to health benefits that are the result of statutes enacted on or
after December 31, 2011.
   (q) No later than February 1, 2013, the director shall, in
consultation with the Insurance Commissioner, develop and publish a
list of covered health benefits and limitations contained in the
plans subject to this section, to ensure consistency and uniformity
between health care service plan contracts and health insurance
policies. In developing the list, the director and commissioner shall
take into account federal statutes, rules, regulations, and guidance
applicable to essential health benefits as of that date. Development
and publication of the list is not 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).
   (r) (1) Notwithstanding the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code), the department, until March 1, 2016, may
implement and administer this section through all-plan letters or
similar instruction from the department until regulations are
adopted.
   (2) The department may adopt emergency regulations implementing
this section. The department may, on a one-time basis, readopt any
emergency regulation authorized by this section that is the same as,
or substantially equivalent to, an emergency regulation previously
adopted under this section.
   (3) The initial adoption of emergency regulations implementing
this section and the readoption of emergency regulations authorized
by this subdivision shall be deemed an emergency and necessary for
the immediate preservation of the public peace, health, safety, or
general welfare. Initial emergency regulations and the readoption of
emergency regulations authorized by this section shall be exempt from
review by the Office of Administrative Law. The initial emergency
regulations and the readoption of emergency regulations authorized by
this section shall be submitted to the Office of Administrative Law
for filing with the Secretary of State and each shall remain in
effect for no more than 180 days, by which time final regulations may
be adopted.
   (4) The director shall consult with the Insurance Commissioner to
ensure consistency and uniformity in the development of all-plan
letters and regulations.
   (s) For purposes of this section, the following definitions shall
apply:
   (1) "Habilitative services" means health care services and health
care devices that assist an individual in partially or fully
acquiring or improving skills and functioning and that are necessary
to address a health deficit or health condition, to the maximum
extent practical. These services address the skills and abilities
needed for functioning in interaction with an individual's
environment. Habilitation services do not include respite, day care,
recreational care, residential treatment, social services, custodial
care, or education services of any kind, including, but not limited
to, vocational training. Habilitative services shall be covered under
the same terms and conditions applied to rehabilitative services
under the plan contract.
   (2) (A) "Health benefits," unless otherwise required to be defined
pursuant to binding federal rules, regulations, or guidance issued
pursuant to Section 1302(b) of PPACA, means health care items or
services for the diagnosis, cure, mitigation, treatment, or
prevention of illness, injury, disease, or a health condition,
including a mental health condition.
   (B) "Health benefits" does not mean any cost-sharing requirements
or limitations such as copayments, coinsurance, or deductibles.
   (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 thereunder.
   (4) "Small group health care service plan contract" means a group
health care service plan contract issued to a small employer, as
defined in Section 1357. 
   SEC. 3.   SEC. 2.   Section 10112.27 is
added to the Insurance Code, to read:
   10112.27.  (a) An individual or small group health insurance
policy  marketed, offered, sold, issued, delivered, 
 issued, amended,  or renewed on or after January 1, 2014,
shall, at a minimum, include coverage for essential health benefits
 pursuant to PPACA and as outlined in this section. This section
shall exclusively govern what benefits a health insurer must cover as
essential health benefits  . For purposes of this section,
"essential health benefits" means all of the following: 
   (1) Health benefits within the categories identified in Section
1302(b) of PPACA: ambulatory patient services, emergency services,
hospitalization, maternity and newborn care, mental health and
substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and wellness
services and chronic disease management, and pediatric services,
including oral and vision care.  
   (1) 
    (2)  (A) The health benefits covered by the Kaiser
Foundation Health Plan Small Group HMO 30 plan (federal health
product identification number 40513CA035) as this plan was offered
during the first quarter of 2012,  including, but not limited
to, all of the following:   as follows, regardless of
whether the benefits are specifically referenced in the plan contract
or evidence of coverage for that plan:  
   (i) The health benefits covered by the plan within the categories
identified in subsection (b) of Section 1302 of PPACA, including, but
not limited to, ambulatory patient services, emergency services,
hospitalization, maternity and newborn care, mental health and
substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and wellness
services and chronic disease management, and pediatric services,
including oral and vision care.  
   (i) Medically necessary basic health care services, as defined in
subdivision (b) of Section 1345 of the Health and Safety Code and in
Section 1300.67 of Title 28 of the California Code of Regulations.

   (ii) The health benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, 
including, but not limited to, basic health care services required to
be covered pursuant to Section 1367, as defined in Section 1345 of
the Health and Safety Code, and in Section 1300.67 of Title 28 of the
California Code of Regulations. These benefits are required to be
covered to the extent   as  described in the
following sections of the Health and Safety Code: Sections 1367.002,
1367.06, and 1367.35 (preventive services for children); Section
1367.25 (prescription drug coverage for contraceptives); Section
1367.45 (AIDS vaccine); Section 1367.46 (HIV testing); Section
1367.51 (diabetes); Section 1367.54 (alpha feto protein testing);
Section 1367.6 (breast cancer screening); Section 1367.61
(prosthetics for laryngectomy); Section 1367.62 (maternity hospital
stay); Section 1367.63 (reconstructive surgery); Section 1367.635
(mastectomies); Section 1367.64 (prostate cancer); Section 1367.65
(mammography); Section 1367.66 (cervical cancer); Section 1367.665
(cancer screening tests); Section 1367.67 (osteoporosis); Section
1367.68 (surgical procedures for jaw bones); Section 1367.71
(anesthesia for dental); Section 1367.9 (conditions attributable to
diethylstilbestrol); Section 1368.2 (hospice care); Section 1370.6
(cancer clinical trials); Section 1371.5 (emergency response
ambulance or ambulance transport services); Subdivision (b) of
Section 1373 (sterilization operations or procedures); Section 1373.4
(inpatient hospital and ambulatory maternity); Section 1374.56
(phenylketonuria); Section 1374.17 (organ transplants for HIV);
Section 1374.72 (mental health parity); and Section 1374.73
(autism/behavioral health treatment). 
   (iii) Any other benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, as described
in those statutes.  
   (iii) 
    (iv)  The health benefits covered by the plan that are
not otherwise required to be covered under Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code, to
the extent otherwise required pursuant to Sections 1367.18, 1367.21,
1367.215, 1367.22, 1367.24, and 1367.25 of the Health and Safety
Code, and Section 1300.67.24 of Title 28 of the California Code of
Regulations  , whether or not the health benefits are
specifically referenced in the health insurance policy  .

   (v) Any other health benefits covered by the plan that are not
otherwise required to be covered under Chapter 2.2 (commencing with
Section 1340) of Division 2 of the Health and Safety Code.  

   (B) Where there are any conflicts or omissions in the plan
identified in subparagraph (A) as compared with the requirements for
health benefits under Chapter 2.2 (commencing with Section 1340) of
Division 2 of the Health and Safety Code that were enacted prior to
December 31, 2011, the requirements of Chapter 2.2 (commencing with
Section 1340) of Division 2 of the Health and Safety Code shall be
controlling, except as otherwise specified in this section. 

   (C) Notwithstanding subparagraph (B) or any other provision of
this section, the home health services benefits covered under the
plan identified in subparagraph (A) shall be deemed to not be in
conflict with Chapter 2.2 (commencing with Section 1340) of Division
2 of the Health and Safety Code.  
   (B) 
    (D)   For purposes of this section, the  
Paul Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008 (Public Law 110-343) shall apply to a policy
subject to this section.  Coverage of mental health and
substance use disorder services pursuant to this paragraph, along
with any scope and duration limits imposed on the benefits, shall be
in compliance with the Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008 (Public Law 110-343), and
all  binding  rules, regulations, and guidance
issued pursuant to Section 2726 of the federal Public Health Service
Act (42 U.S.C. Sec. 300gg-26). 
   (2) 
    (3)  With respect to habilitative services, in addition
to any habilitative services identified in paragraph  (1)
  (2)  , coverage shall also be provided as
required by  binding  federal rules, regulations, or
guidance issued pursuant to Section 1302(b) of PPACA. Habilitative
services shall be covered under the same terms and conditions applied
to rehabilitative services under the policy. 
   (3) 
    (4)  With respect to pediatric vision care, the same
health benefits for pediatric vision care covered under the Federal
Employees Dental and Vision Insurance Program vision plan with the
largest national enrollment as of the first quarter of 2012. The
pediatric vision care services covered pursuant to this paragraph
shall be in addition to, and shall not replace, any vision services
covered under the plan identified in paragraph  (1) 
 (2)  . 
   (4) 
    (5)  With respect to pediatric oral care, the same
health benefits for pediatric oral care covered under the dental plan
available to subscribers of the Healthy Families Program in 2011-12,
including the provision of medically necessary orthodontic care
provided pursuant to the federal Children's Health Insurance Program
Reauthorization Act of 2009. The pediatric oral care benefits covered
pursuant to this paragraph shall be in addition to, and shall not
replace, any dental or orthodontic services covered under the plan
identified in paragraph  (1)   (2)  .

   (5) Except as otherwise provided in subdivision (p), any other
benefits required to be covered under this part. 
   (b)  (1)     Medically
necessary health benefits described in this section shall be covered
subject to cost sharing approved by the commissioner and any
limitations consistent with this section. Limitations  
Treatment limitations  imposed on health benefits  described
in this section  shall be no greater than the  treatment
 limitations imposed by the corresponding plans identified in
subdivision (a)  , subject to the requirements set forth in
paragraph (2)   of subdivision (a)  . 
   (2) A plan may place scope and duration limits on health benefits
described in this section, other than basic health care services
described in clause (ii) of subparagraph (A) of paragraph (1) of
subdivision (a), provided that the scope and duration limits are no
greater than the scope and duration limits imposed on those benefits
by the corresponding plans identified in subdivision (a). 

   (c) Except as otherwise provided in subdivision (d), if it is
determined that a plan identified in subdivision (a), with respect to
benefits and services covered by a policy and any scope and duration
limits applied to those benefits and services pursuant to the
policy, is not fully in compliance with this part, the identification
of that plan pursuant to this section shall not be construed to
exempt the plan from full compliance with this part.

   (d) Notwithstanding subdivision (c) or any other provision of this
section, the home health services benefits covered under the plan
identified in paragraph (1) of subdivision (a) shall be deemed to not
be in conflict with this part.  
   (e) 
    (c)  Except as provided in subdivision  (f)
  (d)  , nothing in this section shall be construed
to permit a health insurer to make
                    substitutions for the benefits required to be
covered under this section, regardless of whether those substitutions
are actuarially equivalent. 
    (f) 
    (d)  To the extent permitted under Section 1302 of PPACA
and any  binding  rules, regulations, or guidance
issued pursuant to that section, and to the extent that substitution
would not create an obligation for the state to defray costs for any
individual, an insurer may substitute its prescription drug formulary
for the formulary provided under the plan identified in subdivision
(a) as long as the  formulary   coverage for
prescription drugs  complies with the sections referenced in
clauses (ii) and  (iii)   (iv)  of
subparagraph (A) of paragraph  (1)   (2) 
of subdivision (a) that apply to prescription drugs. 
   (g) 
    (e)  No health insurer, or its agent, producer, or
representative, shall  issue, deliver, renew,  offer,
market, represent, or sell any product, policy, or discount
arrangement  as minimum coverage, or  as compliant
with the essential health benefits requirement in federal law, unless
it meets all of the requirements of this section.  This
subdivision shall be enforced in the same manner as Section 790.03,
including through the means specified in Sections 790.035 and 790.05.
 
   (h) 
    (f)  This section shall apply regardless of whether the
policy is offered inside or outside the California Health Benefit
Exchange created by Section 100500 of the Government Code. 
   (i) A health insurance policy subject to this section shall comply
with Section 10112.1.  
   (j) A health insurance policy subject to this section shall comply
with state and federal statutory and regulatory requirements
regarding nondiscrimination, including, but not limited to, Section
10140.  
   (g) Nothing in this section shall be construed to exempt a health
insurer or a health insurance policy from meeting other applicable
requirements of law.  
   (k) 
    (h)  This section shall not be construed to prohibit a
policy from covering additional benefits, including, but not limited
to, spiritual care services that are tax deductible under Section 213
of the Internal Revenue Code. 
   (l) 
    (i)  Subdivision (a) shall not apply to any of the
following:
   (1) A policy  consisting solely of coverage of 
 that provides  excepted benefits as described in Sections
2722 and 2791 of the federal Public Health Service Act (42 U.S.C.
Sec. 300gg-21; 42 U.S.C. Sec. 300gg-91).
   (2) A policy that qualifies as a grandfathered health plan under
Section 1251 of PPACA or any binding rules, regulation, or guidance
issued pursuant to that section. 
   (m) 
    (j)  Nothing in this section shall be implemented in a
manner that  is inconsistent with, or  conflicts
with  ,  a requirement of PPACA. 
   (n) 
    (k)  This section shall be implemented only to the
extent essential health benefits are required pursuant to PPACA.

   (o) 
    (l)  An essential health benefit is required to be
provided under this section only to the extent that federal law
 or policy  does not require the state to defray the
costs of the benefit. 
   (m) Nothing in this section shall obligate the state to incur
costs for the coverage of benefits that are not essential health
benefits as defined in this section.  
   (p) 
    (n)  An insurer is not required to cover, under this
section, changes to health benefits that are the result of statutes
enacted on or after December 31, 2011. 
   (q) No later than February 1, 2013, the commissioner shall, in
consultation with the Director of the Department of Managed Health
Care, develop and publish a list of covered health benefits and
limitations contained in the health insurance policies subject to
this section, to ensure consistency and uniformity between health
insurance policies and health care service plan contracts. In
developing the list, the commissioner and director shall take into
account federal statutes, rules, regulations, and guidance applicable
to essential health benefits as of that date. Development and
publication of the list is not 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).  
   (r) (1) Notwithstanding the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code), the commissioner, until March 1, 2016, may
implement and administer this section through insurer letters or
similar instruction from the commissioner until regulations are
adopted.  
   (2) 
    (o)   (1)    The commissioner may
adopt emergency regulations implementing this section. The
commissioner may, on a one-time basis, readopt any emergency
regulation authorized by this section that is the same as, or
substantially equivalent to, an emergency regulation previously
adopted under this section. 
   (3) 
    (2)  The initial adoption of emergency regulations
implementing this section and the readoption of emergency regulations
authorized by this subdivision shall be deemed an emergency and
necessary for the immediate preservation of the public peace, health,
safety, or general welfare.  Initial emergency regulations
and the readoption of emergency regulations authorized by this
section shall be exempt from review by the Office of Administrative
Law.  The initial emergency regulations and the readoption
of emergency regulations authorized by this section shall be
submitted to the Office of Administrative Law for filing with the
Secretary of State and each shall remain in effect for no more than
180 days, by which time final regulations may be adopted. 
   (4) 
    (3)  The commissioner shall consult with the Director of
the Department of Managed Health Care to ensure consistency and
uniformity in the development of  insurer letters and
 regulations  under this subdivision  . 
   (4) This subdivision shall become inoperative on March 1, 2016.
 
   (s) 
    (p)  Nothing in this section shall impose on health
insurance policies the cost sharing or network limitations of the
plans identified in subdivision (a) except to the extent otherwise
required to comply with provisions of this code, including this
section, and as otherwise applicable to all health insurance policies
offered to individuals and small groups. 
   (t) 
    (q)  For purposes of this section, the following
definitions shall apply:
   (1) "Habilitative services" means  medically necessary 
health care services and health care devices that assist an
individual in partially or fully acquiring or improving skills and
functioning and that are necessary to address a  health
deficit or  health condition, to the maximum extent
practical. These services address the skills and abilities needed for
functioning in interaction with an individual's environment.
 Habilitation services do not include   Examples
of health care services that are not habilitative services include,
but are not limited to,  respite  care  , day care,
recreational care, residential treatment, social services, custodial
care, or education services of any kind, including, but not limited
to, vocational training. Habilitative services shall be covered under
the same terms and conditions applied to rehabilitative services
under the policy.
   (2) (A) "Health benefits," unless otherwise required to be defined
pursuant to  binding  federal rules, regulations,
or guidance issued pursuant to Section 1302(b) of PPACA, means health
care items or services for the diagnosis, cure, mitigation,
treatment, or prevention of illness, injury, disease, or a health
condition, including a mental   behavioral 
health condition.
   (B) "Health benefits" does not mean any cost-sharing requirements
 or limitations  such as copayments, coinsurance, or
deductibles.
   (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 thereunder.
   (4) "Small group health insurance policy" means a group health
care service insurance policy issued to a small employer, as defined
in Section 10700. 
  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. 
   SEC. 3.    This act shall become operative only if
Assembly Bill 1453 of the 2011-12 Regular Session is also enacted and
becomes operative.