Bill Text: CA AB2244 | 2009-2010 | Regular Session | Chaptered
Bill Title: Health care coverage.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2010-09-30 - Chaptered by Secretary of State - Chapter 656, Statutes of 2010. [AB2244 Detail]
Download: California-2009-AB2244-Chaptered.html
BILL NUMBER: AB 2244 CHAPTERED
BILL TEXT
CHAPTER 656
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2010
APPROVED BY GOVERNOR SEPTEMBER 30, 2010
PASSED THE SENATE AUGUST 25, 2010
PASSED THE ASSEMBLY AUGUST 26, 2010
AMENDED IN SENATE AUGUST 20, 2010
AMENDED IN SENATE JULY 1, 2010
AMENDED IN ASSEMBLY APRIL 27, 2010
AMENDED IN ASSEMBLY APRIL 5, 2010
INTRODUCED BY Assembly Member Feuer
FEBRUARY 18, 2010
An act to amend Sections 1357.06 and 1357.51 of, and to add
Article 11.7 (commencing with Section 1399.825) to Chapter 2.2 of
Division 2 of, the Health and Safety Code, and to amend Sections
10198.7 and 10708 of, and to add Chapter 9.7 (commencing with Section
10950) to Part 2 of Division 2 of, the Insurance Code, relating to
health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 2244, Feuer. Health care coverage.
Existing law, the federal Patient Protection and Affordable Care
Act, on and after January 1, 2014, requires a health insurance issuer
offering health insurance coverage in the individual or group market
to accept every employer and individual in the state that applies
for that coverage, as specified, and allows premiums for coverage in
the individual or small group market to vary only by rating area,
age, tobacco use, and whether the coverage is for an individual or
family, as specified. The act also prohibits a health insurance
issuer offering group or individual health insurance coverage from
imposing any preexisting condition for children with respect to plan
years beginning on or after September 23, 2010, and for adults with
respect to plan years beginning on or after 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. Existing law provides
for the regulation of health insurers by the Department of
Insurance. Existing law authorizes a health care service plan or
health insurer to exclude an applicant from coverage for a specified
time for preexisting conditions. A willful violation of provisions
governing health care service plans is a crime.
This bill would prohibit the exclusion or limitation of coverage
for children due to any preexisting condition, except as specified.
The bill would further require plans and insurers offering coverage
in the individual market to offer coverage for a child subject to
specified requirements. The bill would prescribe limits on the rates
that may be imposed for coverage of a child depending on, among other
things, whether the child applies for coverage during an open
enrollment period, as defined, or is a late enrollee, as defined, and
would, effective January 1, 2014, require plans and insurers to
apply standard risk rates to child coverage, except as specified. The
bill would prohibit a plan or carrier that does not or ceases to
write new plan contracts or policies for children from offering new
individual plan contracts or policies in this state for 5 years. The
bill would authorize the Department of Managed Health Care and the
Department of Insurance to issue guidance for purposes of
implementing these provisions.
By imposing new requirements on health care service plans, the
willful violation of which would be a crime, this 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 1357.06 of the Health and Safety Code is
amended to read:
1357.06. (a) (1) Preexisting condition provisions of a plan
contract shall not exclude coverage for a period beyond six months
following the individual's effective date of coverage and may only
relate to conditions for which medical advice, diagnosis, care, or
treatment, including prescription drugs, was recommended or received
from a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(2) Notwithstanding paragraph (1), a plan contract offered to a
small employer shall not impose any preexisting condition provision
upon any child under 19 years of age.
(b) A plan that does not utilize a preexisting condition provision
may impose a waiting or affiliation period, not to exceed 60 days,
before the coverage issued subject to this article shall become
effective. During the waiting or affiliation period no premiums shall
be charged to the enrollee or the subscriber.
(c) In determining whether a preexisting condition provision or a
waiting or affiliation period applies to any person, a plan shall
credit the time the person was covered under creditable coverage,
provided the person becomes eligible for coverage under the
succeeding plan contract within 62 days of termination of prior
coverage, exclusive of any waiting or affiliation period, and applies
for coverage with the succeeding plan contract within the applicable
enrollment period. A plan shall also credit any time an eligible
employee must wait before enrolling in the plan, including any
affiliation or employer-imposed waiting or affiliation period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a plan shall credit the time the person was
covered under creditable coverage if the person becomes eligible for
health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan contract
within the applicable enrollment period.
(d) In addition to the preexisting condition exclusions authorized
by subdivision (a) and the waiting or affiliation period authorized
by subdivision (b), health plans providing coverage to a guaranteed
association may impose on employers or individuals purchasing
coverage who would not be eligible for guaranteed coverage if they
were not purchasing through the association a waiting or affiliation
period, not to exceed 60 days, before the coverage issued subject to
this article shall become effective. During the waiting or
affiliation period, no premiums shall be charged to the enrollee or
the subscriber.
(e) An individual's period of creditable coverage shall be
certified pursuant to subdivision (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act (42 U.S.C. Sec. 300gg(e)).
(f) A health care service plan issuing group coverage may not
impose a preexisting condition exclusion to a condition relating to
benefits for pregnancy or maternity care.
SEC. 2. Section 1357.51 of the Health and Safety Code is amended
to read:
1357.51. (a) No plan contract that covers three or more
enrollees shall exclude coverage for any individual on the basis of a
preexisting condition provision for a period greater than six months
following the individual's effective date of coverage. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(b) No plan contract that covers one or two individuals shall
exclude coverage on the basis of a preexisting condition provision
for a period greater than 12 months following the individual's
effective date of coverage, nor shall the plan limit or exclude
coverage for a specific enrollee by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition clause pursuant to this article. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the 12 months immediately
preceding the effective date of coverage.
(c) (1) Notwithstanding subdivision (a), a plan contract for group
coverage shall not impose any preexisting condition provision upon
any child under 19 years of age.
(2) Notwithstanding subdivision (b), a plan contract for
individual coverage that is not a grandfathered health within the
meaning of Section 1251 of the federal Patient Protection and
Affordable Care Act (Public Law 111-148) shall not impose any
preexisting condition provision upon any child under 19 years of age.
(d) A plan that does not utilize a preexisting condition provision
may impose a waiting or affiliation period not to exceed 60 days,
before the coverage issued subject to this article shall become
effective. During the waiting or affiliation period, the plan is not
required to provide health care services and no premium shall be
charged to the subscriber or enrollee.
(e) A plan that does not utilize a preexisting condition provision
in plan contracts that cover one or two individuals may impose a
contract provision excluding coverage for waivered conditions. No
plan may exclude coverage on the basis of a waivered condition for a
period greater than 12 months following the individual's effective
date of coverage. A waivered condition provision contained in plan
contracts may relate only to conditions for which medical advice,
diagnosis, care, or treatment, including use of prescription drugs,
was recommended or received from a licensed health practitioner
during the 12 months immediately preceding the effective date of
coverage.
(f) In determining whether a preexisting condition provision, a
waivered condition provision, or a waiting or affiliation period
applies to any enrollee, a plan shall credit the time the enrollee
was covered under creditable coverage, provided that the enrollee
becomes eligible for coverage under the succeeding plan contract
within 62 days of termination of prior coverage, exclusive of any
waiting or affiliation period, and applies for coverage under the
succeeding plan within the applicable enrollment period. A plan shall
also credit any time that an eligible employee must wait before
enrolling in the plan, including any postenrollment or
employer-imposed waiting or affiliation period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a plan shall credit the time the person was
covered under creditable coverage if the person becomes eligible for
health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan contract
within the applicable enrollment period.
(g) No plan shall exclude late enrollees from coverage for more
than 12 months from the date of the late enrollee's application for
coverage. No plan shall require any premium or other periodic charge
to be paid by or on behalf of a late enrollee during the period of
exclusion from coverage permitted by this subdivision.
(h) A health care service plan issuing group coverage may not
impose a preexisting condition exclusion upon a condition relating to
benefits for pregnancy or maternity care.
(i) An individual's period of creditable coverage shall be
certified pursuant to subsection (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act (42 U.S.C. Sec. 300gg(e)).
SEC. 3. Article 11.7 (commencing with Section 1399.825) is added
to Chapter 2.2 of Division 2 of the Health and Safety Code, to read:
Article 11.7. Individual Access to Health Care Coverage
1399.825. As used in this article:
(a) "Child" means any individual under 19 years of age.
(b) "Individual grandfathered plan coverage" means health care
coverage in which an individual was enrolled on March 23, 2010,
consistent with Section 1251 of PPACA and any rules or regulations
adopted pursuant to that law.
(c) "Initial open enrollment period" means the open enrollment
period beginning on January 1, 2011, and ending 60 days thereafter.
(d) "Late enrollee" means a child without coverage who did not
enroll in a health care service plan contract during an open
enrollment period because of any of the following:
(1) The child lost dependent coverage due to termination or change
in employment status of the child or the person through whom the
child was covered; cessation of an employer's contribution toward an
employee or dependent's coverage; death of the person through whom
the child was covered as a dependent; legal separation; divorce; loss
of coverage under the Healthy Families Program, the Access for
Infants and Mothers Program, or the Medi-Cal program; or adoption of
the child.
(2) The child became a resident of California during a month that
was not the child's birth month.
(3) The child is born as a resident of California and did not
enroll in the month of birth.
(4) The child is mandated to be covered pursuant to a valid state
or federal court order.
(e) "Open enrollment period" means the annual open enrollment
period, subsequent to the initial open enrollment period, applicable
to each individual child that is the month of the child's birth date.
(f) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), and any
subsequent rules or regulations issued pursuant to that law.
(g) "Preexisting condition exclusion" means, with respect to
coverage, a limitation or exclusion of benefits relating to a
condition based on the fact that the condition was present before the
date of enrollment of the coverage, whether or not any medical
advice, diagnosis, care, or treatment was recommended or received
before that date.
(h) "Responsible party for a child" means an adult having custody
of the child or with responsibility for the financial needs of the
child, including the responsibility to provide health care coverage.
(i) "Standard risk rate" means the lowest rate that can be offered
for a child with the same benefit plan, effective date, age,
geographic region, and family status.
1399.826. (a) (1) During each open enrollment period, every
health care service plan offering plan contracts in the individual
market, other than individual grandfathered plan coverage, shall
offer to the responsible party for a child coverage for the child
that does not exclude or limit coverage due to any preexisting
condition of the child.
(b) A health care service plan offering coverage in the individual
market shall not reject an application for a health care service
plan contract from a child or filed on behalf of a child by the
responsible party during an open enrollment period or from a late
enrollee during a period no longer than 63 days from the qualifying
event listed in subdivision (d) of Section 1399.825.
(c) Except to the extent permitted by federal law, rules,
regulations, or guidance issued by the relevant federal agency, a
health care service plan shall not condition the issuance or offering
of individual coverage on any of the following factors:
(1) Health status.
(2) Medical condition, including physical and mental illnesses.
(3) Claims experience.
(4) Receipt of health care.
(5) Medical history.
(6) Genetic information.
(7) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(8) Disability.
(9) Any other health status-related factor as determined by
department.
This subdivision shall not apply to a contract providing
individual grandfathered plan coverage.
(d) When a responsible party for a child submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage under the plan contract shall become
effective no later than the first day of the following month. When
that payment is neither delivered nor postmarked until after the 15th
day of the month, coverage shall become effective no later than the
first day of the second month following delivery or postmark of the
payment.
(e) A health care service plan offering coverage in the individual
market shall not reject the request of a responsible party for a
child to include that child as a dependent on an existing health care
service plan contract that includes dependent coverage during an
open enrollment period.
(f) Nothing in this article shall be construed to prohibit a
health care service plan offering coverage in the individual market
from establishing rules for eligibility for coverage and offering
coverage pursuant to those rules for children and individuals based
on factors otherwise authorized under federal and state law for
health plan contracts in addition to those offered on a guaranteed
issue basis during an open enrollment period to children or late
enrollees pursuant to this article. However, a health care service
plan, other than a plan providing individual grandfathered plan
coverage, shall not impose a preexisting condition provision on
coverage, including dependent coverage, offered to a child.
(g) Nothing in this article shall be construed to require a plan
to establish a new service area or to offer health coverage on a
statewide basis, outside of the plan's existing service area.
(h) Nothing in this article shall be construed to prevent a health
care service plan from offering coverage to a family member of an
enrollee in grandfathered health plan coverage consistent with
Section 1251 of PPACA.
1399.827. This article shall not apply to health care service
plan contracts for coverage of Medicare services pursuant to
contracts with the United States government, Medicare supplement
contracts, Medi-Cal contracts with the State Department of Health
Care Services, plan contracts offered under the Healthy Families
Program, long-term care coverage, or specialized health care service
plan contracts.
1399.828. (a) Upon the effective date of this article, a health
care service plan shall fairly and affirmatively offer, market, and
sell all of the plan's health care service plan contracts that are
offered and sold to a child or the responsible party for a child in
each service area in which the plan provides or arranges for the
provision of health care services during any open enrollment period,
to late enrollees, and during any other period in which state or
federal law, rules, regulations, or guidance expressly provide that a
health care service plan shall not condition offer or acceptance of
coverage on any preexisting condition.
(b) No health care service plan or solicitor shall, directly or
indirectly, engage in the following activities:
(1) Encourage or direct a child or responsible party for a child
to refrain from filing an application for coverage with a plan
because of the health status, claims experience, industry,
occupation, or geographic location, provided that the location is
within the plan's approved service area, of the child.
(2) Encourage or direct a child or responsible party for a child
to seek coverage from another plan because of the health status,
claims experience, industry, occupation, or geographic location,
provided that the location is within the plan's approved service
area, of the child.
(c) A health care service plan shall not, directly or indirectly,
enter into any contract, agreement, or arrangement with a solicitor
that provides for or results in the compensation paid to a solicitor
for the sale of a health care service plan contract to be varied
because of the health status, claims experience, industry,
occupation, or geographic location of the child. This subdivision
does not apply to a compensation arrangement that provides
compensation to a solicitor on the basis of percentage of premium,
provided that the percentage shall not vary because of the health
status, claims experience, industry, occupation, or geographic area
of the child.
1399.829. (a) A health care service plan may use the following
characteristics of an eligible child for purposes of establishing the
rate of the plan contract for that child, where consistent with
federal regulations under PPACA: age, geographic region, and family
composition, plus the health care service plan contract selected by
the child or the responsible party for the child.
(b) From the effective date of this article to December 31, 2013,
inclusive, rates for a child applying for coverage shall be subject
to the following limitations:
(1) During any open enrollment period or for late enrollees, the
rate for any child due to health status shall not be more than two
times the standard risk rate for a child.
(2) The rate for a child shall be subject to a 20-percent
surcharge above the highest allowable rate on a child applying for
coverage who is not a late enrollee and who failed to maintain
coverage with any health care service plan or health insurer for the
90-day period prior to the date of the child's application. The
surcharge shall apply for the 12-month period following the effective
date of the child's coverage.
(3) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may rate a child based on health status during any period other than
an open enrollment period if the child is not a late enrollee.
(4) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may condition an offer or acceptance of coverage on any preexisting
condition or other health status-related factor for a period other
than an open enrollment period and for a child who is not a late
enrollee.
(c) For any individual health care service plan contract issued,
sold, or renewed prior to December 31, 2013, the health plan shall
provide to a child or responsible party for a child a notice that
states the following:
"Please consider your options carefully before failing to maintain
or renew coverage for a child for whom you are responsible. If you
attempt to obtain new individual coverage for that child, the premium
for the same coverage may be higher than the premium you pay now."
(d) A child who applied for coverage between September 23, 2010,
and the end of the initial open enrollment period shall be deemed to
have maintained coverage during that period.
(e) Effective January 1, 2014, except for individual grandfathered
health plan coverage, the rate for any child shall be identical to
the standard risk rate.
(f) Health care service plans may require documentation from
applicants relating to their coverage history.
1399.832. No health care service plan shall be required to offer
a health care service plan contract or accept applications for the
contract pursuant to this article in the case of any of the
following:
(a) To a child, if the child who is to be covered by the plan
contract does not work or reside within the plan's approved service
areas.
(b) (1) Within a specific service area or portion of a service
area, if the plan reasonably anticipates and demonstrates to the
satisfaction of the director that it will not have sufficient health
care delivery resources to ensure that health care services will be
available and accessible to the child because of its obligations to
existing enrollees.
(2) A health care service plan that cannot offer a health care
service plan contract to individuals or children because it is
lacking in sufficient health care delivery resources within a service
area or a portion of a service area may not offer a contract in the
area in which the plan is not offering coverage to individuals to new
employer groups until the plan notifies the director that it has the
ability to deliver services to individuals, and certifies to the
director that from the date of the notice it will enroll all
individuals requesting coverage in that area from the plan.
(3) Nothing in this article shall be construed to limit the
director's authority to develop and implement a plan of
rehabilitation for a health care service plan whose financial
viability or organizational and administrative capacity has become
impaired.
1399.833. The director may require a health care service plan to
discontinue the offering of contracts or acceptance of applications
from any individual or child or responsible party for a child upon a
determination by the director that the plan does not have sufficient
financial viability or organizational and administrative capacity to
ensure the delivery of health care services to its enrollees. In
determining whether the conditions of this section have been met, the
director shall consider, but not be limited to, the plan's
compliance with the requirements of Section 1367, Article 6
(commencing with Section 1375.1), and the rules adopted under those
provisions.
1399.834. (a) All health care service plan contracts offered to a
child or on behalf of a child to a responsible party for a child
shall conform to the requirements of Sections 1366.3, 1365, and
1373.6 and shall be renewable at the option of the enrollee or
responsible party for a child on behalf of the enrollee except as
permitted to be canceled, rescinded, or not renewed pursuant to
Section 1365.
(b) Any plan that ceases to offer for sale new individual health
care service plan contracts pursuant to Section 1365 shall continue
to be governed by this article with respect to business conducted
under this article.
(c) Except as authorized under Section 1399.833, a plan that, as
of the effective date of this article, does not write new health care
service plan contracts for children in this state or that, after the
effective date of this article, ceases to write new health care
service plan contracts for children in this state shall be prohibited
from offering for sale new individual health care service plan
contracts in this state for a period of five years from the date of
notice to the director.
1399.835. On or before July 1, 2011, the director may issue
guidance to health plans regarding compliance with this article and
that 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. The guidance shall only
be effective until the director and the Insurance Commissioner adopt
joint regulations pursuant to the Administrative Procedure Act.
SEC. 4. Section 10198.7 of the Insurance Code is amended to read:
10198.7. (a) No health benefit plan that covers three or more
persons and that is issued, renewed, or written by any insurer,
nonprofit hospital service plan, self-insured employee welfare
benefit plan, fraternal benefits society, or any other entity shall
exclude coverage for any individual on the basis of a preexisting
condition provision for a period greater than six months following
the individual's effective date of coverage, nor shall limit or
exclude coverage for a specific insured person by type of illness,
treatment, medical condition, or accident except for satisfaction of
a preexisting clause pursuant to this article. Preexisting condition
provisions contained in health benefit plans may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(b) No health benefit plan that covers one or two individuals and
that is issued, renewed, or written by any insurer, self-insured
employee welfare benefit plan, fraternal benefits society, or any
other entity shall exclude coverage on the basis of a preexisting
condition provision for a period greater than 12 months following the
individual's effective date of coverage, nor shall limit or exclude
coverage for a specific insured person by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition clause pursuant to this article. Preexisting
condition provisions contained in health benefit plans may relate
only to conditions for which medical advice, diagnosis, care, or
treatment, including use of prescription drugs, was recommended or
received from a licensed health practitioner during the 12 months
immediately preceding the effective date of coverage.
(c) (1) Notwithstanding subdivision (a), a health benefit plan for
group coverage shall not impose any preexisting condition provision
upon any child under 19 years of age.
(2) Notwithstanding subdivision (b), a health benefit plan for
individual coverage that is a grandfathered plan within the meaning
of Section 1251 of the federal Patient Protection and Affordable Care
Act (Public Law 111-148) shall not impose any preexisting condition
provision upon any child under 19 years of age.
(d) A carrier that does not utilize a preexisting condition
provision may impose a waiting or affiliation period not to exceed 60
days, before the coverage issued subject to this article shall
become effective. During the waiting or affiliation period, the
carrier is not required to provide health care services and no
premium shall be charged to the subscriber or enrollee.
(e) A carrier that does not utilize a preexisting condition
provision in health plans that cover one or two individuals may
impose a contract provision excluding coverage for waivered
conditions. No carrier may exclude coverage on the basis of a
waivered condition for a period greater than 12 months following the
individual's effective date of coverage. A waivered condition
provision contained in health benefit plans may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the 12 months immediately
preceding the effective date
of coverage.
(f) In determining whether a preexisting condition provision, a
waivered condition provision, or a waiting or affiliation period
applies to any person, all health benefit plans shall credit the time
the person was covered under creditable coverage, provided the
person becomes eligible for coverage under the succeeding health
benefit plan within 62 days of termination of prior coverage,
exclusive of any waiting or affiliation period, and applies for
coverage under the succeeding plan within the applicable enrollment
period. A health benefit plan shall also credit any time an eligible
employee must wait before enrolling in the health benefit plan,
including any affiliation or employer-imposed waiting period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated or, an employer's contribution toward health
coverage has terminated, a carrier shall credit the time the person
was covered under creditable coverage if the person becomes eligible
for health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan within the
applicable enrollment period.
(g) No health benefit plan that covers three or more persons and
that is issued, renewed, or written by any insurer, nonprofit
hospital service plan, self-insured employee welfare benefit plan,
fraternal benefits society, or any other entity may exclude late
enrollees from coverage for more than 12 months from the date of the
late enrollee's application for coverage. No insurer, nonprofit
hospital service plan, self-insured employee welfare benefit plan,
fraternal benefits society, or any other entity shall require any
premium or other periodic charge to be paid by or on behalf of a late
enrollee during the period of exclusion from coverage permitted by
this subdivision.
(h) An individual's period of creditable coverage shall be
certified pursuant to subdivision (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act, 42 U.S.C. Sec. 300gg(e).
(i) A group health benefit plan may not impose a preexisting
condition exclusion to a condition relating to benefits for pregnancy
or maternity care.
(j) Any entity providing aggregate or specific stop loss coverage
or any other assumption of risk with reference to a health benefit
plan shall provide that the plan meets all requirements of this
article concerning waiting periods, preexisting condition provisions,
and late enrollees.
SEC. 5. Section 10708 of the Insurance Code is amended to read:
10708. (a) (1) Preexisting condition provisions of health benefit
plans shall not exclude coverage for a period beyond six months
following the individual's effective date of coverage and may only
relate to conditions for which medical advice, diagnosis, care, or
treatment, including the use of prescription medications, was
recommended by or received from a licensed health practitioner during
the six months immediately preceding the effective date of coverage.
(2) Notwithstanding paragraph (1), a health benefit plan offered
to a small employer shall not impose any preexisting condition
provision upon any child under 19 years of age.
(b) A carrier that does not utilize a preexisting condition
provision may impose a waiting or affiliation period, not to exceed
60 days, before the coverage issued subject to this chapter shall
become effective. During the waiting or affiliation period, the
carrier is not required to provide health care benefits and no
premiums shall be charged to the subscriber or enrollee.
(c) In determining whether a preexisting condition provision or a
waiting period applies to any person, a plan shall credit the time
the person was covered under creditable coverage, provided the person
becomes eligible for coverage under the succeeding plan contract
within 62 days of termination of prior coverage, exclusive of any
waiting or affiliation period, and applies for coverage with the
succeeding health benefit plan contract within the applicable
enrollment period. A plan shall also credit any time an eligible
employee must wait before enrolling in the health benefit plan,
including any postenrollment or employer-imposed waiting or
affiliation period. However, if a person's employment has ended, the
availability of health coverage offered through employment or
sponsored by an employer has terminated, or an employer's
contribution toward health coverage has terminated, a plan shall
credit the time the person was covered under creditable coverage if
the person becomes eligible for health coverage offered through
employment or sponsored by an employer within 180 days, exclusive of
any waiting or affiliation period, and applies for coverage under the
succeeding health benefit plan within the applicable enrollment
period.
(d) Group health benefit plans may not impose a preexisting
conditions exclusion to a condition relating to benefits for
pregnancy or maternity care.
(e) A carrier providing aggregate or specific stop loss coverage
or any other assumption of risk with reference to a health benefit
plan shall provide that the plan meets all requirements of this
section concerning preexisting condition provisions and waiting or
affiliation periods.
(f) In addition to the preexisting condition exclusions authorized
by subdivision (a) and the waiting or affiliation period authorized
by subdivision (b), carriers providing coverage to a guaranteed
association may impose on employers or individuals purchasing
coverage who would not be eligible for guaranteed coverage if they
were not purchasing through the association a waiting or affiliation
period, not to exceed 60 days, before the coverage issued subject to
this chapter shall become effective. During the waiting or
affiliation period, the carrier is not required to provide health
care benefits and no premiums shall be charged to the insured.
SEC. 6. Chapter 9.7 (commencing with Section 10950) is added to
Part 2 of Division 2 of the Insurance Code, to read:
CHAPTER 9.7. INDIVIDUAL ACCESS TO HEALTH INSURANCE
10950. As used in this chapter:
(a) "Child" means any individual under 19 years of age.
(b) "Individual grandfathered plan coverage" means health care
coverage in which an individual was enrolled on March 23, 2010,
consistent with Section 1251 of PPACA and any rules or regulations
adopted pursuant to that law.
(c) "Initial open enrollment period" means the open enrollment
period beginning on January 1, 2011, and ending 60 days thereafter.
(d) "Late enrollee" means a child without coverage who did not
enroll in a health benefit plan during an open enrollment period
because of any of the following:
(1) The child lost dependent coverage due to termination or change
in employment status of the child or the person through whom the
child was covered; cessation of an employer's contribution toward an
employee or dependent's coverage; death of the person through whom
the child was covered as a dependent; legal separation; divorce; loss
of coverage under the Healthy Families Program, the Access for
Infants and Mothers Program, or the Medi-Cal program; or adoption of
the child.
(2) The child became a resident of California during a month that
was not the child's birth month.
(3) The child is born as a resident of California and did not
enroll in the month of birth.
(4) The child is mandated to be covered pursuant to a valid state
or federal court order.
(e) "Open enrollment period" means the annual open enrollment
period subsequent to the initial open enrollment period, applicable
to each individual child that is the month of the child's birth date.
(f) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), and any
subsequent rules or regulations issued pursuant to that law.
(g) "Preexisting condition exclusion" means, with respect to
coverage, a limitation or exclusion of benefits relating to a
condition based on the fact that the condition was present before the
date of enrollment of the coverage, whether or not any medical
advice, diagnosis, care, or treatment was recommended or received
before that date.
(h) "Responsible party for a child" means an adult having custody
of the child or with responsibility for the financial needs of the
child, including the responsibility to provide health care coverage.
(i) "Standard risk rate" means the lowest rate that can be offered
for a child with the same benefit plan, effective date, age,
geographic region, and family status.
10951. (a) (1) During each open enrollment period, every carrier
offering health benefit plans in the individual market, other than
individual grandfathered plan coverage, shall offer to the
responsible party for a child coverage for the child that does not
exclude or limit coverage due to any preexisting condition of the
child.
(b) A carrier offering coverage in the individual market shall not
reject an application for a health benefit plan from a child or
filed on behalf of a child by the responsible party during an open
enrollment period or from a late enrollee during a period no longer
than 63 days from the qualifying event listed in subdivision (d) of
Section 10950.
(c) Except to the extent permitted by federal law, rules,
regulations, or guidance issued by the relevant federal agency, a
carrier shall not condition the issuance or offering of individual
coverage on any of the following factors:
(1) Health status.
(2) Medical condition, including physical and mental illnesses.
(3) Claims experience.
(4) Receipt of health care.
(5) Medical history.
(6) Genetic information.
(7) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(8) Disability.
(9) Any other health status-related factor as determined by
department.
This subdivision shall not apply to a health benefit plan
providing individual grandfathered plan coverage.
(d) When a responsible party for a child submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage under the health benefit plan shall
become effective no later than the first day of the following month.
When that payment is neither delivered nor postmarked until after the
15th day of the month, coverage shall become effective no later than
the first day of the second month following delivery or postmark of
the payment.
(e) A carrier offering coverage in the individual market shall not
reject the request of a responsible party for a child to include
that child as a dependent on an existing health benefit plan that
includes dependent coverage during an open enrollment period.
(f) Nothing in this chapter shall be construed to prohibit a
carrier offering coverage in the individual market from establishing
rules for eligibility for coverage and offering coverage pursuant to
those rules for children and individuals based on factors otherwise
authorized under federal and state law for health benefit plans in
addition to those offered on a guaranteed issue basis during an open
enrollment period to children or late enrollees pursuant to this
chapter. However, a carrier, other than a carrier providing
individual grandfathered plan coverage, shall not impose a
preexisting condition provision on coverage, including dependent
coverage, offered to a child.
(g) Nothing in this chapter shall be construed to require a
carrier to establish a new service area or to offer health care
coverage on a statewide basis, outside of the carrier's existing
service area.
(h) Nothing in this chapter shall be construed to prevent a
carrier from offering coverage to a family member of an enrollee in
grandfathered health plan coverage consistent with Section 1251 of
PPACA.
10952. This chapter shall not apply to health benefit plans for
coverage of Medicare services pursuant to contracts with the United
States government, Medicare supplement policies, Medi-Cal contracts
with the State Department of Health Care Services, policies offered
under the Healthy Families Program, long-term care coverage, or
specialized health benefit plans.
10953. (a) Upon the effective date of this chapter, a carrier
shall fairly and affirmatively offer, market, and sell all of the
carrier's health benefit plans that are offered and sold to a child
or the responsible party for a child in each service area in which
the plan provides or arranges for health care coverage during any
open enrollment period, to late enrollees, and during any other
period in which state or federal law, rules, regulations, or guidance
expressly provide that a carrier shall not condition offer or
acceptance of coverage on any preexisting condition.
(b) No carrier or solicitor shall, directly or indirectly, engage
in the following activities:
(1) Encourage or direct a child or responsible party for a child
to refrain from filing an application for coverage with a carrier
because of the health status, claims experience, industry,
occupation, or geographic location, provided that the location is
within the carrier's approved service area, of the child.
(2) Encourage or direct a child or responsible party for a child
to seek coverage from another carrier because of the health status,
claims experience, industry, occupation, or geographic location,
provided that the location is within the carrier's approved service
area, of the child.
(c) A carrier shall not, directly or indirectly, enter into any
contract, agreement, or arrangement with a solicitor that provides
for or results in the compensation paid to a solicitor for the sale
of a health benefit plan to be varied because of the health status,
claims experience, industry, occupation, or geographic location of
the child. This subdivision does not apply to a compensation
arrangement that provides compensation to a solicitor on the basis of
percentage of premium, provided that the percentage shall not vary
because of the health status, claims experience, industry,
occupation, or geographic area of the child.
10954. (a) A carrier may use the following characteristics of an
eligible child for purposes of establishing the rate of the health
benefit plan for that child, where consistent with federal
regulations under PPACA: age, geographic region, and family
composition, plus the health benefit plan selected by the child or
the responsible party for a child.
(b) From the effective date of this chapter to December 31, 2013,
inclusive, rates for a child applying for coverage shall be subject
to the following limitations:
(1) During any open enrollment period or for late enrollees, the
rate for any child due to health status shall not be more than two
times the standard risk rate for a child.
(2) The rate for a child shall be subject to a 20-percent
surcharge above the highest allowable rate on a child applying for
coverage who is not a late enrollee and who failed to maintain
coverage with any carrier or health care service plan for the 90-day
period prior to the date of the child's application. The surcharge
shall apply for the 12-month period following the effective date of
the child's coverage.
(3) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a carrier may rate a child
based on health status during any period other than an open
enrollment period if the child is not a late enrollee.
(4) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a carrier may condition an
offer or acceptance of coverage on any preexisting condition or other
health status-related factor for a period other than an open
enrollment period and for a child who is not a late enrollee.
(c) For any individual health benefit plan issued, sold, or
renewed prior to December 31, 2013, the carrier shall provide to a
child or responsible party for a child a notice that states the
following:
"Please consider your options carefully before failing to maintain
or renew coverage for a child for whom you are responsible. If you
attempt to obtain new individual coverage for that child, the premium
for the same coverage may be higher than the premium you pay now."
(d) A child who applied for coverage between September 23, 2010,
and the end of the initial enrollment period shall be deemed to have
maintained coverage during that period.
(e) Effective January 1, 2014, except for individual grandfathered
health plan coverage, the rate for any child shall be identical to
the standard risk rate.
(f) Carriers may require documentation from applicants relating to
their coverage history.
10957. No carrier shall be required to offer a health benefit
plan or accept applications for the contract pursuant to this chapter
in the case of any of the following:
(a) To a child, if the child who is to be covered by the health
benefit plan does not work or reside within the carrier's approved
service areas.
(b) (1) Within a specific service area or portion of a service
area, if the carrier reasonably anticipates and demonstrates to the
satisfaction of the commissioner that it will not have sufficient
health care delivery resources to ensure that health care services
will be available and accessible to the child because of its
obligations to existing insureds.
(2) A carrier that cannot offer a health benefit plan to
individuals or children because it is lacking in sufficient health
care delivery resources within a service area or a portion of a
service area may not offer a contract in the area in which the
carrier is not offering coverage to individuals to new employer
groups until the carrier notifies the commissioner that it has the
ability to deliver services to individuals, and certifies to the
commissioner that from the date of the notice it will enroll all
individuals requesting coverage in that area from the carrier.
(3) Nothing in this chapter shall be construed to limit the
commissioner's authority to develop and implement a plan of
rehabilitation for a carrier whose financial viability or
organizational and administrative capacity has become impaired.
10958. The commissioner may require a carrier to discontinue the
offering of contracts or acceptance of applications from any
individual or child or responsible party for a child upon a
determination by the commissioner that the carrier does not have
sufficient financial viability or organizational and administrative
capacity to ensure the delivery of health care services to its
insureds. In determining whether the conditions of this section have
been met, the commissioner shall consider, but not be limited to, the
carrier's compliance with the requirements of this part and the
rules adopted under those provisions.
10959. (a) All health benefit plans offered to a child or on
behalf of a child to a responsible party for a child shall conform to
the requirements of Section 10127.18, 12682.1, and 10273.4, and
shall be renewable at the option of the child or responsible party
for a child on behalf of the child except as permitted to be
canceled, rescinded or not renewed pursuant to Section 10273.4.
(b) Any carrier that ceases to offer for sale new individual
health benefit plans pursuant to Section 10273.4 shall continue to be
governed by this chapter with respect to business conducted under
this chapter.
(c) Except as authorized under Section 10958, a carrier that as of
the effective date of this chapter does not write new health benefit
plans for children in this state or that after the effective date of
this chapter ceases to write new health benefit plans for children
in this state shall be prohibited from offering for sale new
individual health benefit plans or in this state for a period of five
years from the date of notice to the commissioner.
10960. On or before July 1, 2011, the commissioner may issue
guidance to health plans regarding compliance with this chapter and
such 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. The guidance shall only
be effective until the commissioner and the Director of the
Department of Managed Health Care adopt joint regulations pursuant to
the Administrative Procedure Act.
SEC. 7. 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.
