Bill Text: CA SB1446 | 2013-2014 | Regular Session | Chaptered
Bill Title: Health care coverage: small employer market.
Spectrum: Bipartisan Bill
Status: (Passed) 2014-07-07 - Chaptered by Secretary of State. Chapter 84, Statutes of 2014. [SB1446 Detail]
Download: California-2013-SB1446-Chaptered.html
BILL NUMBER: SB 1446 CHAPTERED
BILL TEXT
CHAPTER 84
FILED WITH SECRETARY OF STATE JULY 7, 2014
APPROVED BY GOVERNOR JULY 7, 2014
PASSED THE SENATE MAY 29, 2014
PASSED THE ASSEMBLY JUNE 26, 2014
AMENDED IN SENATE MAY 27, 2014
AMENDED IN SENATE MAY 12, 2014
AMENDED IN SENATE APRIL 28, 2014
AMENDED IN SENATE MARCH 25, 2014
INTRODUCED BY Senator DeSaulnier
(Coauthor: Senator Anderson)
FEBRUARY 21, 2014
An act to add Section 1367.012 to the Health and Safety Code, and
to add Section 10112.300 to the Insurance Code, relating to health
care coverage, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 1446, DeSaulnier. Health care coverage: small employer market.
Existing federal law, the federal Patient Protection and
Affordable Care Act (PPACA), enacts various health care coverage
market reforms that take effect with respect to plan years on or
after January 1, 2014. Among other things, PPACA requires each health
insurance issuer that offers health insurance coverage in the
individual or group market in a state to accept every employer and
individual in the state that applies for that coverage and to renew
that coverage at the option of the plan sponsor or the individual.
PPACA prohibits a group health plan and a health insurance issuer
offering group or individual health insurance coverage from imposing
any preexisting condition exclusion with respect to that plan or
coverage. PPACA allows the premium rate charged by a health insurance
issuer offering small group or individual coverage to vary only by
rating area, age, tobacco use, and whether the coverage is for an
individual or family and prohibits discrimination against individuals
based on health status. PPACA requires a health insurance issuer
that offers coverage in the small group or individual market to
ensure that the coverage includes the essential health benefits
package, as defined. However, guidance issued under PPACA grants
transitional relief to health insurance coverage in the individual or
small group market for policies in effect on October 1, 2013, that
are renewed for a policy year starting between January 1, 2014, and
October 1, 2016, and exempts that coverage from certain PPACA
reforms, as specified.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care.
Existing law also provides for the regulation of health insurers by
the Department of Insurance. Existing law implements the PPACA
reforms described above under the Knox-Keene Act and the laws
governing health insurance.
This bill would allow a small employer health care service plan
contract or a small employer health insurance policy that was in
effect on December 31, 2013, that is still in effect as of the
effective date of this act, and that does not qualify as a
grandfathered health plan under PPACA, to be renewed until January 1,
2015, and to continue to be in force until December 31, 2015. The
bill would exempt those health care service plan contracts and health
insurance policies from various provisions of state law that
implement the PPACA reforms described above and would require that
the contracts and policies be amended to comply with those provisions
by January 1, 2016, in order to remain in force on and after that
date. The bill would require that these provisions be implemented
only to the extent permitted by PPACA.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1367.012 is added to the Health and Safety
Code, to read:
1367.012. (a) (1) A small employer health care service plan
contract in effect on December 31, 2013, and still in effect as of
the effective date of this section, that does not qualify as a
grandfathered health plan under Section 1251 of PPACA may be renewed
until January 1, 2015, and may continue to be in force until December
31, 2015, subject to applicable federal law, and any other
requirements imposed by this chapter.
(2) A small employer health care service plan contract described
in paragraph (1) may continue to be in force after December 31, 2015,
if the contract is amended to comply with all of the provisions
listed in subdivision (e) by January 1, 2016, and complies with all
other applicable provisions of law.
(b) (1) If a health care service plan offers for renewal a small
employer health care service plan contract pursuant to paragraph (1)
of subdivision (a), the health care service plan shall provide notice
to the group contractholder regarding the option to renew coverage
pursuant to subdivision (a) using the relevant notice attached to the
guidance entitled "Insurance Standards Bulletin Series - Extension
of Transition Policy through October 1, 2016," issued by the United
States Department of Health and Human Services, Centers for Medicare
and Medicaid Services on March 5, 2014.
(2) A health care service plan shall include the following notice
with the notice issued pursuant to paragraph (1):
"New health care coverage options are available in California. You
currently have health care coverage that is not required to comply
with many new laws. A new health care service plan contract may be
more affordable and/or offer more comprehensive benefits. New plans
may also have limits on deductibles and out-of-pocket costs, while
your existing plan may have no such limits.
You have the option to remain with your current coverage for one
more year or switch to new coverage that complies with the new laws.
Covered California, the state's new health insurance marketplace,
offers small employers health insurance from a number of companies
through its Small Business Health Options Program (SHOP). Federal tax
credits are available through the SHOP to those small employers that
qualify. Talk to Covered California (1-877-453-9198), your plan
representative, or your insurance agent to discuss your options."
(3) A health care service plan shall include with the notices
issued pursuant to paragraphs (1) and (2), the premium, cost sharing,
and benefits associated with the plan's standard benefit designs
approved consistent with subdivision (c) of Section 100504 of the
Government Code for the geographic region of the small employer.
(4) A health care service plan that offers for renewal a small
employer health care service plan contract pursuant to paragraph (1)
of subdivision (a) shall offer renewal to all employers whose health
care service plan contract with that health care service plan was in
effect on December 31, 2013.
(c) (1) A small employer health care service plan contract in
effect on December 31, 2013, and still in effect as of the effective
date of this section, that does not qualify as a grandfathered health
plan under Section 1251 of PPACA that is renewed on or before
January 1, 2015, and that continues to be in force until no later
than December 31, 2015, is exempt from the following provisions:
(A) Paragraphs (1) and (2) of subdivision (a) of, and subdivisions
(e) and (i) of, Section 1357.503.
(B) Section 1357.512.
(C) Sections 1367.005 and 1357.508.
(D) Section 1367.0065.
(E) Section 1367.006.
(F) Section 1367.007.
(G) Section 1367.009.
(2) Notwithstanding paragraphs (1) and (2) of subdivision (a) of,
and subdivision (e) of, Section 1357.503, a small employer health
care service plan contract subject to this section shall only be
offered, marketed, and sold to an employer whose health care service
plan contract with that health care service plan was in effect on
December 31, 2013.
(d) A small employer health care service plan contract described
in paragraph (1) of subdivision (a) shall be subject to Sections
1357.12 and 1357.13, and shall continue to be subject to Article 3.16
(commencing with Section 1357.500), except as provided in
subdivision (c), and to all otherwise applicable provisions of this
chapter.
(e) No later than January 1, 2016, a small employer health care
service plan contract described in paragraph (1) of subdivision (a)
may be amended to comply with all of the following:
(1) Paragraphs (1) and (2) of subdivision (a) of, and subdivisions
(e) and (i) of, Section 1357.503.
(2) Section 1357.512.
(3) Sections 1357.508 and 1367.005.
(4) Section 1367.006.
(5) Section 1367.007.
(6) Section 1367.009.
(f) This section shall be implemented only to the extent permitted
by PPACA.
(g) For purposes of this section, the following definitions shall
apply:
(1) "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 pursuant to that law.
(2) "Small employer health care service plan contract" means a
group health care service plan contract, other than a specialized
health care service plan contract, issued to a small employer, as
defined in subdivision (s) of Section 1357.500.
SEC. 2. Section 10112.300 is added to the Insurance Code, to read:
10112.300. (a) (1) A small employer health benefit plan in effect
on December 31, 2013, and still in effect as of the effective date
of this section, that does not qualify as a grandfathered health plan
under Section 1251 of PPACA may be renewed until January 1, 2015,
and may continue to be in force until December 31, 2015, subject to
applicable federal law, and any other requirements imposed by this
part.
(2) A small employer health benefit plan described in paragraph
(1) may continue to be in force after December 31, 2015, if the plan
is amended to comply with all of the provisions listed in subdivision
(e) by January 1, 2016, and complies with all other applicable
provisions of law.
(b) (1) If an insurer offers for renewal a small employer health
benefit plan pursuant to paragraph (1) of subdivision (a), the
insurer shall provide notice to the group contractholder regarding
the option to renew coverage pursuant to subdivision (a) using the
relevant notice attached to the guidance entitled "Insurance
Standards Bulletin Series - Extension of Transition Policy through
October 1, 2016," issued by the United States Department of Health
and Human Services, Centers for Medicare and Medicaid Services on
March 5, 2014.
(2) An insurer shall include the following notice with the notice
issued pursuant to paragraph (1):
"New health care coverage options are available in California. You
currently have health care coverage that is not required to comply
with many new laws. A new health benefit plan may be more affordable
and/or offer more comprehensive benefits. New plans may also have
limits on deductibles and out-of-pocket costs, while your existing
plan may have no such limits.
You have the option to remain with your current coverage for one
more year or switch to new coverage that complies with the new laws.
Covered California, the state's new health insurance marketplace,
offers small employers health insurance from a number of companies
through its Small Business Health Options Program (SHOP). Federal tax
credits are available through the SHOP to those small employers that
qualify. Talk to Covered California (1-877-453-9198), your plan
representative, or your insurance agent to discuss your options."
(3) An insurer shall include with the notices issued pursuant to
paragraphs (1) and (2), the premium, cost sharing, and benefits
associated with the plan's standard benefit designs approved
consistent with subdivision (c) of Section 100504 of the Government
Code for the geographic region of the small employer.
(4) An insurer that offers for renewal a small employer health
benefit plan pursuant to paragraph (1) of subdivision (a) shall offer
renewal to all employers whose health benefit plan with that insurer
was in effect on December 31, 2013.
(c) (1) A small employer health benefit plan in effect on December
31, 2013, and still in effect as of the effective date of this
section, that does not qualify as a grandfathered health plan under
Section 1251 of PPACA that is renewed on or before January 1, 2015,
and that continues to be in force until no later than December 31,
2015, is exempt from the following provisions:
(A) Paragraph (1) of subdivision (b) of, and subdivisions (c),
(g), and (k) of, Section 10753.05.
(B) Section 10753.14.
(C) Section 10112.27.
(D) Section 10112.285.
(E) Section 10112.28.
(F) Section 10112.29.
(G) Section 10112.297.
(2) Notwithstanding paragraph (1) of subdivision (b) of, and
subdivision (g) of, Section 10753.05, a small employer health benefit
plan subject to this section shall only be offered, marketed, and
sold to an employer whose health benefit plan with that insurer was
in effect on December 31, 2013.
(d) A small employer health benefit plan described in paragraph
(1) of subdivision (a) shall be subject to Sections 10714 and 10715,
and shall continue to be subject to Chapter 8.01 (commencing with
Section 10753), except as provided in subdivision (c), and to all
otherwise applicable provisions of this part.
(e) No later than January 1, 2016, a small employer health benefit
plan described in paragraph (1) of subdivision (a) may be amended to
comply with all of the following:
(1) Paragraph (1) of subdivision (b) of, and subdivisions (c),
(g), and (k) of, Section 10753.05.
(2) Section 10753.14.
(3) Section 10112.27.
(4) Section 10112.28.
(5) Section 10112.29.
(6) Section 10112.297.
(f) This section shall be implemented only to the extent permitted
by PPACA.
(g) For purposes of this section, the following definitions shall
apply:
(1) "Health benefit plan" has the same meaning as defined in
subdivision (j) of Section 10753.
(2) "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 pursuant to that law.
(3) "Small employer health benefit plan" means a group health
benefit plan issued to a small employer, as defined in Section 10753.
SEC. 3. 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 carry out the extended transitional policy under the
federal Patient Protection and Affordable Care Act (Public Law
111-148) announced by the United States Department of Health and
Human Services, Centers for Medicare and Medicaid Services on March
5, 2014, and to allow small businesses to reenroll in their current
health care coverage until 2016, it is necessary that this act take
effect immediately.
