Bill Text: CA AB718 | 2009-2010 | Regular Session | Amended
Bill Title: Health care coverage: federally eligible defined
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2010-08-04 - In committee: Set, second hearing. Hearing canceled at the request of author. [AB718 Detail]
Download: California-2009-AB718-Amended.html
BILL NUMBER: AB 718 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 20, 2010
AMENDED IN SENATE SEPTEMBER 1, 2009
AMENDED IN SENATE JULY 8, 2009
AMENDED IN SENATE JUNE 30, 2009
AMENDED IN SENATE JUNE 16, 2009
AMENDED IN SENATE MAY 27, 2009
AMENDED IN ASSEMBLY APRIL 22, 2009
AMENDED IN ASSEMBLY APRIL 13, 2009
INTRODUCED BY Assembly Member Emmerson
(Coauthor: Senator Negrete McLeod)
FEBRUARY 26, 2009
An act to amend Sections 1399.805, 1399.811, 1399.813, and
1399.815 of the Health and Safety Code, and to amend Sections
10901.3, 10901.9, 10902.1, and 10902.3 of the Insurance Code,
relating to health care coverage , and declaring the urgency
thereof, to take effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
AB 718, as amended, Emmerson. Health care coverage: federally
eligible defined individuals: preferred provider products: premium
rates.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires a health care service plan or a health insurer
offering individual plan contracts or individual health insurance
policies to fairly and affirmatively offer, market, and sell certain
individual contracts and policies to all federally eligible defined
individuals, as defined, in each service area in which the plan or
insurer provides or arranges for the provision of health care
services. For those contracts and policies that offer services
through a preferred provider arrangement, existing law requires that
the premium not exceed the average premium paid by a similar
subscriber of the Major Risk Medical Insurance Program (MRMIP), as
specified.
This bill would define the "average premium paid" for purposes of
this provision as an amount calculated on an annual basis by the
Managed Risk Medical Insurance Board using a weighted average based
on each plan's or insurer's enrollment in MRMIP, as specified. The
bill would require plans and insurers to include a statement
regarding those maximum premium rates in certain solicitation and
sales materials.
Existing law requires plans and insurers to file a specified
notice with the Department of Managed Health Care or the Department
of Insurance prior to renewing or amending a contract or policy
issued to a federally eligible defined individual and prior to
changing the premium rates applicable to that contract or policy.
Existing law requires the notice or amendment to include a
certification of compliance with specified premium requirements.
This bill would specify that this certification binds the plan or
insurer to the representation of compliance and subjects the plan or
insurer to all remedies available to the Director of the Department
of Managed Health Care or the Insurance Commissioner, as specified.
Because a willful violation of the bill's requirements 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.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature, to the extent
funding and resources are available, that the Managed Risk Medical
Insurance Board shall develop and deliver the average premiums paid
to the Department of Managed Health Care and the Department of
Insurance for the 2010 calendar year and that the health care service
plans and health insurers subject to the provisions of this act
shall comply with all of the provisions of this act for all health
care service plan contracts and all health insurance polices issued
and sold during the 2010 calendar year.
SEC. 2. Section 1399.805 of the Health and Safety Code is amended
to read:
1399.805. (a) (1) After the federally eligible defined
individual submits a completed application form for a plan contract,
the plan shall, within 30 days, notify the individual of the
individual's actual premium charges for that plan contract, unless
the plan has provided notice of the premium charge prior to the
application being filed. In no case shall the premium charged for any
health care service plan contract identified in subdivision (d) of
Section 1366.35 exceed the following amounts:
(A) For health care service plan contracts that offer services
through a preferred provider arrangement, the average premium paid by
a subscriber of the Major Risk Medical Insurance Program (MRMIP) who
is of the same age and resides in the same geographic area as the
federally eligible defined individual. However, for federally
qualified individuals who are between the ages of 60 and 64,
inclusive, the premium shall not exceed the average premium paid by a
subscriber of MRMIP who is 59 years of age and resides in the same
geographic area as the federally eligible defined individual.
(B) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The individual shall have 30
days in which to exercise the right to buy coverage at the quoted
premium rates.
(2) A plan may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health care service plans that offer services through a
preferred provider arrangement, the average of the MRMIP rate for
families of the same size that reside in the same geographic area as
the federally eligible defined individual.
(B) For health care service plans identified in subdivision (d)
of Section 1366.35 that do not offer services through a preferred
provider arrangement, 170 percent of the standard premium charged to
a family that is of the same size and resides in the same geographic
area as the federally eligible defined individual.
(b) When a federally eligible defined individual 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 shall begin no later than
the first day of the following month. When that payment is neither
delivered or postmarked until after the 15th day of a month, coverage
shall become effective no later than the first day of the second
month following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the plan
contract, the individual shall have the option of changing coverage
to a different plan contract offered by the same health care service
plan. If the individual notified the plan of the change within the
first 15 days of a month, coverage under the new plan contract shall
become effective no later than the first day of the following month.
If an enrolled individual notified the plan of the change after the
15th day of a month, coverage under the new plan contract shall
become effective no later than the first day of the second month
following notification.
(d) (1) For purposes of subparagraph (A) of paragraph (1) of
subdivision (a), the "average premium paid" shall be determined by
calculating a weighted average that is based upon each health care
service plan's and each health insurer's aggregate enrollment in
MRMIP within each designated geographic region, as follows:
(A) Each health care service plan and each health insurer shall
have a single weight factor for each geographic region. This weight
factor shall be a ratio of each health care service plan's or each
health insurer's total MRMIP subscribers in the designated geographic
region, divided by the total MRMIP subscribers in that geographic
region for all health care service plans and health insurers, for a
period of six months.
(B) The weight factor for each health care service plan and each
health insurer, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that health care service plan or
health insurer for each age and dependent category. The result of
that multiplication shall be added to the corresponding results for
all other health care service plans and health insurers. The total
sum shall be the average premium paid for the corresponding age and
dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in
MRMIP, for the six-month period of January 1 to June 30 immediately
preceding the calendar year for which the premiums will be effective.
The Managed Risk Medical Insurance Board shall, under its
letterhead, provide the average premiums paid to the department and
the Department of Insurance no later than October 15 of each year
prior to the calendar year for which the premiums will be effective,
or 20 working days after the MRMIP premiums are finalized for the
upcoming calendar year, whichever is later. At the time it provides
the average premiums paid, the Managed Risk Medical Insurance Board
shall also provide the department and the Department of Insurance the
MRMIP premiums and geographical enrollment data that served as the
basis for the calculation of the average premiums paid.
SEC. 3. Section 1399.811 of the Health and Safety Code is amended
to read:
1399.811. Premiums for contracts offered, delivered, amended, or
renewed by plans on or after January 1, 2010, shall be subject to the
following requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program (MRMIP) who is
of the same age and resides in the same geographic area as the
federally eligible defined individual. However, for federally
qualified individuals who are between the ages of 60 to 64 years,
inclusive, the premium shall not exceed the average premium paid by a
subscriber of MRMIP who is 59 years of age and resides in the same
geographic area as the federally eligible defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 to 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of MRMIP who is of the same age and resides in the same
geographic area as the federally eligible defined individual.
However, for federally qualified individuals who are between the ages
of 60 and 64 years, inclusive, the premium shall not exceed the
average premium paid by a subscriber of MRMIP who is 59 years of age
and resides in the same geographic area as the federally eligible
defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The premium effective on
January 1, 2001, shall apply to in force business at the earlier of
either the time of renewal or July 1, 2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average increase in the premiums
charged to a subscriber of MRMIP who is of the same age and resides
in the same geographic area as the federally eligible defined
individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, the increase in premiums charged
to a nonfederally qualified individual who is of the same age and
resides in the same geographic area as the federally defined eligible
individual. The premium for an eligible individual may not be
modified more frequently than every 12 months.
(3) For a contract that a plan has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(d) (1) For purposes of paragraph (1) of subdivision (a) and
paragraph (1) of subdivision (b), the "average premium paid" shall be
determined by calculating a weighted average that is based upon each
health care service plan's and each health insurer's aggregate
enrollment in MRMIP within each designated geographic region, as
follows:
(A) Each health care service plan and each health insurer shall
have a single weight factor for each geographic region. This weight
factor shall be a ratio of each health care service plan's or each
health insurer's total MRMIP subscribers in the designated geographic
region, divided by the total MRMIP subscribers in that geographic
region for all health care service plans and health insurers, for a
period of six months.
(B) The weight factor for each health care service plan and each
health insurer, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that health care service plan or
health insurer for each age and dependent category. The result of
that multiplication shall be added to the corresponding results for
all other health care service plans and health insurers. The total
sum shall be the average premium paid for the corresponding age and
dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in
MRMIP, for the six-month period of January 1 to June 30 immediately
preceding the calendar year for which the premiums will be effective.
The Managed Risk Medical Insurance Board shall, under its
letterhead, provide the average premiums paid to the department and
the Department of Insurance no later than October 15 of each year
prior to the calendar year for which the premiums will be effective,
or 20 working days after the MRMIP premiums are finalized for the
upcoming calendar year, whichever is later. At the time it provides
the average premiums paid, the Managed Risk Medical Insurance Board
shall also provide the department and the Department of Insurance the
MRMIP premiums and geographical enrollment data that served as the
basis for the calculation of the average premiums paid.
SEC. 4. Section 1399.813 of the Health and Safety Code is amended
to read:
1399.813. (a) In connection with the offering for sale of a plan
contract to an individual, each plan shall make a reasonable
disclosure, as part of its solicitation and sales materials, of all
individual contracts.
(b) For plan contracts that offer services through a preferred
provider arrangement and that are offered or sold to federally
eligible defined individuals, the disclosure described in subdivision
(a) shall also include the following statement, which, if the
disclosure is made in writing, shall be in at least 12-point boldface
type:
"The maximum premium rate for this preferred provider product is
available on the Internet Web sites of the Department of Managed
Health Care, at www.dmhc.ca.gov, and the Department of Insurance, at
www.insurance.ca.gov. By visiting either of these Internet Web sites,
you can compare the rates that were disclosed to you for this
product and ensure that they are less than, or equal to, the maximum
rate allowed by law."
SEC. 5. Section 1399.815 of the Health and Safety Code is amended
to read:
1399.815. (a) At least 20 business days prior to renewing or
amending a plan contract subject to this article, or at least 20
business days prior to the initial offering of a plan contract
subject to this article, a plan shall file a notice of an amendment
with the director in accordance with the provisions of Section 1352.
The notice of an amendment shall include a statement certifying that
the plan is in compliance with subdivision (a) of Section 1399.805
and with Section 1399.811. Any action by the director, as permitted
under Section 1352, to disapprove, suspend, or postpone the plan's
use of a plan contract shall be in writing, specifying the reasons
the plan contract does not comply with the requirements of this
chapter.
(b) Prior to making any changes in the premium, the plan shall
file an amendment in accordance with the provisions of Section 1352,
and shall include a statement certifying the plan is in compliance
with subdivision (a) of Section 1399.805 and with Section 1399.811.
All other changes to a plan contract previously filed with the
director pursuant to subdivision (a) shall be filed as an amendment
in accordance with the provisions of Section 1352, unless the change
otherwise would require the filing of a material modification.
(c) An amendment or notice of an amendment filed pursuant to this
section shall not be deemed accepted or approved unless the required
statement of certification is concurrently filed with the amendment
or notice. The certification required by this section, whether
provided by the health care service plan or an independent agent or
consultant, binds the plan to the representation of compliance and
subjects the plan to all remedies available to the director to the
extent the filing or certification is determined to be a
misrepresentation, whether or not willful, or a falsification of the
information contained therein, or otherwise violates the requirements
of this chapter or any of the rules promulgated under this chapter.
SEC. 6. Section 10901.3 of the Insurance Code is amended to read:
10901.3. (a) (1) After the federally eligible defined individual
submits a completed application form for a health benefit plan, the
carrier shall, within 30 days, notify the individual of the
individual's actual premium charges for that health benefit plan
design. In no case shall the premium charged for any health benefit
plan identified in subdivision (d) of Section 10785 exceed the
following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program (MRMIP) who is
of the same age and resides in the same geographic area as the
federally eligible defined individual. However, for federally
qualified individuals who are between the ages of 60 and 64,
inclusive, the premium shall not exceed the average premium paid by a
subscriber of the MRMIP who is 59 years of age
and resides in the same geographic area as the federally eligible
defined individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive, the premium shall not exceed 170 percent of the
standard premium charged to an individual who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual. The individual shall have 30 days in which to exercise
the right to buy coverage at the quoted premium rates.
(2) A carrier may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average of the MRMIP
rate for families of the same size that reside in the same geographic
area as the federally eligible defined individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to a family
that is of the same size and resides in the same geographic area as
the federally eligible defined individual.
(b) When a federally eligible defined individual 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 shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the
health benefit plan, the individual shall have the option of changing
coverage to a different health benefit plan design offered by the
same carrier. If the individual notified the plan of the change
within the first 15 days of a month, coverage under the new health
benefit plan shall become effective no later than the first day of
the following month. If an enrolled individual notified the carrier
of the change after the 15th day of a month, coverage under the
health benefit plan shall become effective no later than the first
day of the second month following notification.
(d) (1) For purposes of subparagraph (A) of paragraph (1) of
subdivision (a), the "average premium paid" shall be determined by
calculating a weighted average that is based upon each carrier's and
each health care service plan's aggregate enrollment in MRMIP within
each designated geographic region, as follows:
(A) Each carrier and each health care service plan shall have a
single weight factor for each geographic region. This weight factor
shall be a ratio of each carrier's or each health care service plan's
total MRMIP subscribers in the designated geographic region, divided
by the total MRMIP subscribers in that geographic region for all
carriers and health care service plans, for a period of six months.
(B) The weight factor for each carrier and each health care
service plan, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that carrier or plan for each age
and dependent category. The result of that multiplication shall be
added to the corresponding results for all other carriers and health
care service plans. The total sum shall be the average premium paid
for the corresponding age and dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in
MRMIP, for the six-month period of January 1 to June 30 immediately
preceding the calendar year for which the premiums will be effective.
The Managed Risk Medical Insurance Board shall, under its
letterhead, provide the average premiums paid to the department and
the Department of Managed Health Care no later than October 15 of
each year prior to the calendar year for which the premiums will be
effective, or 20 working days after the MRMIP premiums are finalized
for the upcoming calendar year, whichever is later. At the time it
provides the average premiums paid, the Managed Risk Medical
Insurance Board shall also provide the department and the Department
of Managed Health Care the MRMIP premiums and geographical enrollment
data that served as the basis for the calculation of the average
premiums paid.
SEC. 7. Section 10901.9 of the Insurance Code is amended to read:
10901.9. Commencing January 1, 2010, premiums for health benefit
plans offered, delivered, amended, or renewed by carriers shall be
subject to the following requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of the Major
Risk Medical Insurance Program (MRMIP) who is of the same age and
resides in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 to 64, inclusive, the premium shall not exceed
the average premium paid by a subscriber of MRMIP who is 59 years of
age and resides in the same geographic area as the federally
eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 to 64,
inclusive, the premium shall not exceed 170 percent of the standard
premium charged to an individual who is 59 years of age and resides
in the same geographic area as the federally eligible defined
individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of MRMIP who is
of the same age and resides in the same geographic area as the
federally eligible defined individual. However, for federally
qualified individuals who are between the ages of 60 and 64,
inclusive, the premium shall not exceed the average premium paid by a
subscriber of MRMIP who is 59 years of age and resides in the same
geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive, the premium shall not exceed 170 percent of the
standard premium charged to an individual who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual. The premium effective on January 1, 2001, shall apply to
in force business at the earlier of either the time of renewal or
July 1, 2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average increase in the premiums charged to a
subscriber of MRMIP who is of the same age and resides in the same
geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, the increase in premiums charged to a nonfederally
qualified individual who is of the same age and resides in the same
geographic area as the federally defined eligible individual. The
premium for an eligible individual may not be modified more
frequently than every 12 months.
(3) For a contract that a carrier has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(d) (1) For purposes of paragraph (1) of subdivision (a) and
paragraph (1) of subdivision (b), the "average premium paid" shall be
determined by calculating a weighted average that is based upon each
carrier's and each health care service plan's aggregate enrollment
in MRMIP within each designated geographic region, as follows:
(A) Each carrier and each health care service plan shall have a
single weight factor for each geographic region. This weight factor
shall be a ratio of each carrier's or each health care service plan's
total MRMIP subscribers in the designated geographic region, divided
by the total MRMIP subscribers in
that geographic region for all carriers and health care
service plans, for a period of six months.
(B) The weight factor for each carrier and each health care
service plan, as calculated under subparagraph (A), shall be
multiplied by the premium rate for that carrier or plan for each age
and dependent category. The result of that multiplication shall be
added to the corresponding results for all other carriers and health
care service plans. The total sum shall be the average premium paid
for the corresponding age and dependent category.
(2) The "average premium paid," as defined in paragraph (1), shall
be calculated on an annual basis by the Managed Risk Medical
Insurance Board, which shall consider six months of enrollment in the
MRMIP, for the six-month period of January 1st
1 to June 30th 30
immediately preceding the calendar year for which the premiums will
be effective. The Managed Risk Medical Insurance Board shall, under
its letterhead, provide the average premiums paid to the department
and the Department of Managed Health Care no later than October 15 of
each year prior to the calendar year for which the premiums will be
effective, or 20 working days after the MRMIP premiums are finalized
for the upcoming calendar year, whichever is later. At the time it
provides the average premiums paid, the Managed Risk Medical
Insurance Board shall provide the department and the Department of
Managed Health Care the MRMIP premiums and geographical enrollment
data that served as the basis for the calculation of the average
premiums paid.
SEC. 8. Section 10902.1 of the Insurance Code is amended to read:
10902.1. (a) In connection with the offering for sale of any
health benefit plan designed to an individual, each carrier shall
make a reasonable disclosure, as part of its solicitation and sales
materials, of all individual contracts.
(b) For health benefit plans that offer services through a
preferred provider arrangement and that are offered or sold to
federally eligible defined individuals, the disclosure described in
subdivision (a) shall also include the following statement, which, if
the disclosure is made in writing, shall be in at least 12-point
boldface type:
"The maximum premium rate for this preferred provider product is
available on the Internet Web sites of the Department of Insurance,
at www.dmhc.ca.gov, and the Department of Managed Health Care, at
www.mrmib.ca.gov. By visiting either of these Internet Web sites, you
can compare the rates that were disclosed to you for this product
and ensure that they are less than, or equal to, the maximum rate
allowed by law."
SEC. 9. Section 10902.3 of the Insurance Code is amended to read:
10902.3. (a) At least 20 business days prior to renewing or
amending a health benefit plan contract subject to this chapter, or
at least 20 business days prior to the initial offering of a health
benefit plan subject to this chapter, a carrier shall file a
statement with the commissioner in the same manner as required for
small employers as outlined in Section 10717. The statement shall
include a statement certifying that the carrier is in compliance with
subdivision (a) of Section 10901.3 and with Section 10901.9. Any
action by the commissioner, as permitted under Section 10717, to
disapprove, suspend, or postpone the plan's use of a carrier's health
benefit plan design shall be in writing, specifying the reasons the
health benefit plan does not comply with the requirements of this
chapter.
(b) Prior to making any changes in the premium, the carrier shall
file an amendment in the same manner as required for small employers
as outlined in Section 10717, and shall include a statement
certifying the carrier is in compliance with subdivision (a) of
Section 10901.3 and with Section 10901.9. All other changes to a
health benefit plan previously filed with the commissioner pursuant
to subdivision (a) shall be filed as an amendment in the same manner
as required for small employers as outlined in Section 10717.
(c) A statement or amendment filed pursuant to this section shall
not be deemed accepted or approved unless the required statement of
certification is concurrently filed with the statement or amendment.
The certification required by this section, whether provided by the
carrier or an independent agent or consultant, binds the carrier to
the representation of compliance and subjects the carrier to all
remedies available to the commissioner to the extent the filing or
certification is determined to be a misrepresentation, whether or not
willful, or a falsification of the information contained therein, or
otherwise violates the requirements of this code or any of the rules
promulgated under this code.
SEC. 10. 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. 11. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
In order to ensure that individual health care service plan
contracts and individual health insurance policies offered to
federally eligible defined individuals do not charge more for premium
rates during the 2011 calendar year than is permissible due to lack
of clarity in existing law, in order to help the Managed Risk Medical
Insurance Board receive timely information to calculate the "average
premium paid" in time for this act to apply to the 2011 calendar
year, and in order to help the Department of Insurance and the
Department of Managed Health Care to protect the interests of the
public in carrying out the intent of the Legislature to ensure that
all Californians are treated equally with respect to premium rates
for these products, it is necessary that this act take effect
immediately.
