Bill Text: CA SB639 | 2013-2014 | Regular Session | Amended

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

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Bill Title: Health care coverage.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2013-09-20 - Chaptered by Secretary of State. Chapter 316, Statutes of 2013. [SB639 Detail]

Download: California-2013-SB639-Amended.html

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BILL NUMBER: SB 639	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 6, 2013
	AMENDED IN SENATE  MAY 28, 2013
	AMENDED IN SENATE  APRIL 9, 2013
	AMENDED IN SENATE  APRIL 1, 2013

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 22, 2013

   An act to amend Section 1367 of, and to add Sections 1367.006,
1367.007, 1367.008, and 1367.009 to, the Health and Safety Code, and
to add Sections 10112.28, 10112.29, 10112.295, 10112.297, and 10112.7
to the Insurance Code, relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 639, as amended, Hernandez. Health care coverage.
   Existing federal law, the federal Patient Protection and
Affordable Care Act (PPACA), enacts various health care coverage
market reforms that take effect January 1, 2014. Among other things,
PPACA establishes annual limits on deductibles for employer-sponsored
plans and defines bronze, silver, gold, and platinum levels of
coverage for the nongrandfathered individual and small group markets.

   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.
   This bill would prohibit the deductible under a small employer
health care service plan contract or health insurance policy offered,
sold, or renewed on or after January 1, 2014, from exceeding $2,000
in the case of a plan contract or policy covering a single
individual, or $4,000 in all other cases.
   The bill would require, for nongrandfathered products in the
individual or small group markets, a health care service plan
contract or health insurance policy, except a specialized health
insurance policy, that is issued, amended, or renewed on or after
January 1, 2014, to provide for a limit on annual out-of-pocket
expenses for all covered benefits that meet the definition of
essential health benefits, as defined, and would require the contract
or policy, for nongrandfathered products in the large group market,
to provide that limit for covered benefits, including out-of-network
emergency  care.   care, to the extent that the
limit does not conflict with federal law or guidance, as specified.
The bill would, effective January 1, 2015, apply the above-described
provisions to a specialized plan or specialized health insurance
policy that offers an essential health benefit, as specified. 
   The bill would define bronze, silver, gold, and platinum levels of
coverage for the nongrandfathered individual and small group markets
consistent with the definitions in PPACA. The bill would prohibit a
carrier that is not participating in the Exchange from offering a
catastrophic plan, as defined, in the individual market.
   PPACA requires a health insurance issuer offering group or
individual coverage that provides or covers benefits with respect to
services in the emergency department of a hospital to cover emergency
services without the need for prior authorization, regardless of
whether the provider is a participating provider, and subject to the
same cost sharing required if the services were provided by a
participating provider, as specified.
   This bill would impose that requirement with respect to health
insurance policies issued, amended, or renewed on or after January 1,
2014, as specified.
    Because a willful violation of these 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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 1367 of the Health and Safety Code is amended
to read:
   1367.  A health care service plan and, if applicable, a
specialized health care service plan shall meet the following
requirements:
   (a) Facilities located in this state including, but not limited
to, clinics, hospitals, and skilled nursing facilities to be utilized
by the plan shall be licensed by the State Department of Public
Health, where licensure is required by law. Facilities not located in
this state shall conform to all licensing and other requirements of
the jurisdiction in which they are located.
   (b) Personnel employed by or under contract to the plan shall be
licensed or certified by their respective board or agency, where
licensure or certification is required by law.
   (c) Equipment required to be licensed or registered by law shall
be so licensed or registered, and the operating personnel for that
equipment shall be licensed or certified as required by law.
   (d) The plan shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at times as may be appropriate consistent with good professional
practice.
   (e) (1) All services shall be readily available at reasonable
times to each enrollee consistent with good professional practice. To
the extent feasible, the plan shall make all services readily
accessible to all enrollees consistent with Section 1367.03.
   (2) To the extent that telehealth services are appropriately
provided through telehealth, as defined in subdivision (a) of Section
2290.5 of the Business and Professions Code, these services shall be
considered in determining compliance with Section 1300.67.2 of Title
28 of the California Code of Regulations.
   (3) The plan shall make all services accessible and appropriate
consistent with Section 1367.04.
   (f) The plan shall employ and utilize allied health manpower for
the furnishing of services to the extent permitted by law and
consistent with good medical practice.
   (g) The plan shall have the organizational and administrative
capacity to provide services to subscribers and enrollees. The plan
shall be able to demonstrate to the department that medical decisions
are rendered by qualified medical providers, unhindered by fiscal
and administrative management.
   (h) (1) Contracts with subscribers and enrollees, including group
contracts, and contracts with providers, and other persons furnishing
services, equipment, or facilities to or in connection with the
plan, shall be fair, reasonable, and consistent with the objectives
of this chapter. All contracts with providers shall contain
provisions requiring a fast, fair, and cost-effective dispute
resolution mechanism under which providers may submit disputes to the
plan, and requiring the plan to inform its providers upon
contracting with the plan, or upon change to these provisions, of the
procedures for processing and resolving disputes, including the
location and telephone number where information regarding disputes
may be submitted.
   (2) A health care service plan shall ensure that a dispute
resolution mechanism is accessible to noncontracting providers for
the purpose of resolving billing and claims disputes.
   (3) On and after January 1, 2002, a health care service plan shall
annually submit a report to the department regarding its dispute
resolution mechanism. The report shall include information on the
number of providers who utilized the dispute resolution mechanism and
a summary of the disposition of those disputes.
   (i) A health care service plan contract shall provide to
subscribers and enrollees all of the basic health care services
included in subdivision (b) of Section 1345, except that the director
may, for good cause, by rule or order exempt a plan contract or any
class of plan contracts from that requirement. The director shall by
rule define the scope of each basic health care service that health
care service plans are required to provide as a minimum for licensure
under this chapter. Nothing in this chapter shall prohibit a health
care service plan from charging subscribers or enrollees a copayment
or a deductible for a basic health care service consistent with
Section 1367.006 or 1367.007, provided that the copayments,
deductibles, or other cost sharing are reported to the director and
set forth to the subscriber or enrollee pursuant to the disclosure
provisions of Section 1363. Nothing in this chapter shall prohibit a
health care service plan from setting forth, by contract, limitations
on maximum coverage of basic health care services, provided that the
limitations are reported to, and held unobjectionable by, the
director and set forth to the subscriber or enrollee pursuant to the
disclosure provisions of Section 1363.
   (j) A health care service plan shall not require registration
under the federal Controlled Substances Act (21 U.S.C. Sec. 801 et
seq.) as a condition for participation by an optometrist certified to
use therapeutic pharmaceutical agents pursuant to Section 3041.3 of
the Business and Professions Code.
   Nothing in this section shall be construed to permit the director
to establish the rates charged subscribers and enrollees for
contractual health care services.
   The director's enforcement of Article 3.1 (commencing with Section
1357) shall not be deemed to establish the rates charged subscribers
and enrollees for contractual health care services.
   The obligation of the plan to comply with this chapter shall not
be waived when the plan delegates any services that it is required to
perform to its medical groups, independent practice associations, or
other contracting entities.
  SEC. 2.  Section 1367.006 is added to the Health and Safety Code,
to read:
   1367.006.  (a) (1) For nongrandfathered products in the individual
or small group markets, a health care service plan contract, except
a specialized health care service plan contract, that is issued,
amended, or renewed on or after January 1, 2014, shall provide for a
limit on annual out-of-pocket expenses for all covered benefits that
meet the definition of essential health benefits in paragraph (1) of
subdivision (a) of Section 1367.005.
   (2) For nongrandfathered products in the large group market, a
health care service plan contract, except a specialized health care
service plan contract, that is issued, amended, or renewed on or
after January 1, 2014, shall provide for a limit on annual
out-of-pocket expenses for covered benefits, including out-of-network
emergency care consistent with Section 1371.4.  This limit shall
apply to essential health benefits covered under the plan to the
extent that this provision does not conflict with federal law or
guidance on out-of-pocket maximums for nongrandfathered products in
the large group market.  For large group products for the first
plan year commencing on or after January 1, 2014, the requirement
that a product provide for a limit on annual out-of-pocket expenses
shall be satisfied if both of the following apply:
   (A) The product complies with the requirements of this paragraph
with respect to basic health care services.
   (B) To the extent the product includes an out-of-pocket maximum on
coverage other than basic health care services, that out-of-pocket
maximum also does not exceed the limit established pursuant to this
paragraph.
   (b) The limit described in subdivision (a) shall apply to any
copayment, coinsurance, deductible, incentive payment, and any other
form of cost sharing for all covered benefits, including prescription
drugs covered pursuant to Section 1367.24.
   (c) The limit described in subdivision (a) shall not exceed the
limit described in Section 1302(c) of PPACA, and any subsequent
rules, regulations, or guidance issued under that section.
   (d) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible enrollees described in Section
1402 of PPACA, and any subsequent rules, regulations, or guidance
issued under that section. 
   (e) Effective January 1, 2015, if an essential health benefit is
offered by a specialized plan, this section shall apply so that the
total annual out-of-pocket maximum for all essential benefits does
not exceed the limit in this section. This section shall not apply to
a specialized plan that does not offer an essential health benefit
as defined in Section 1367.005.  
   (e) 
    (f)  "PPACA" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any rules, regulations, or guidance issued thereunder.
  SEC. 3.  Section 1367.007 is added to the Health and Safety Code,
to read:
   1367.007.  (a) (1) For a small employer health care service plan
contract offered, sold, or renewed on or after January 1, 2014, the
deductible under the plan shall not exceed:
   (A) Two thousand dollars ($2,000) in the case of a plan contract
covering a single individual.
   (B) Four thousand dollars ($4,000) in the case of any other plan
contract.
   (2) The dollar amounts in this section shall be indexed consistent
with Section 1302(c)(2) of PPACA and any federal rules or guidance
pursuant to that section.
   (3) The limitation in this subdivision shall be applied in a
manner that does not affect the actuarial value of any small employer
health care service plan contract.
   (4) For small group products at the bronze level of coverage, as
defined in Section 1367.008, the department may permit plans to offer
a higher deductible in order to meet the actuarial value requirement
of the bronze level. In making this determination, the department
shall consider affordability of cost sharing for enrollees and shall
also consider whether enrollees may be deterred from seeking
appropriate care because of higher cost sharing.
   (b) Nothing in this section shall be construed to allow a plan
contract to have a deductible that applies to preventive services as
defined in Section 1367.002.
   (c) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
  SEC. 4.  Section 1367.008 is added to the Health and Safety Code,
to read:
   1367.008.  (a) Levels of coverage for the nongrandfathered
individual market are defined as follows:
   (1) Bronze level: A health care service plan contract in the
bronze level shall provide a level of coverage that is actuarially
equivalent to 60 percent of the full actuarial value of the benefits
provided under the plan contract.  No product shall be
offered at this level of coverage unless it is a standardized product
consistent with Section 1366.6. 
   (2) Silver level: A health care service plan contract in the
silver level shall provide a level of coverage that is actuarially
equivalent to 70 percent of the full actuarial value of the benefits
provided under the plan contract.  No product shall be
offered at this level of coverage unless it is a standardized product
consistent with Section 1366.6. 
   (3) Gold level: A health care service plan contract in the gold
level shall provide a level of coverage that is actuarially
equivalent to 80 percent of the full actuarial value of the benefits
provided under the plan contract.  No product shall be
offered at this level of coverage unless it is a standardized product
consistent with Section 1366.6. 
   (4) Platinum level: A health care service plan contract in the
platinum level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the plan contract.  No product shall be
offered at this level of coverage unless it is a standardized product
consistent with Section 1366.6. 
   (b) Actuarial value for nongrandfathered individual health care
service plan contracts shall be determined in accordance with the
following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in Section 1367.005 and as provided to a
standard, nonelderly population. For this purpose, a standard
population shall not include those receiving coverage through the
Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA. 
   (4) The actuarial value for pediatric dental benefits, whether
offered by a full service plan or a specialized plan, shall be
consistent with federal law and guidance.  
   (4) 
    (5)  The department, in consultation with the Department
of Insurance and the Exchange, shall consider whether to exercise
state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health care service plans, total cost of care paid for
by the plan, price of care, patterns of service utilization, and
relevant demographic factors.
   (c) For all products in the nongrandfathered individual market
commencing January 1, 2015, any deductible shall apply to the same
services for any product in the same level of coverage whether
regulated by the department or the Department of Insurance.
   (d) (1) A catastrophic plan is a health care service plan contract
that provides no benefits for any plan year until the enrollee has
incurred cost-sharing expenses in an amount equal to the annual limit
on out-of-pocket costs as specified in Section 1367.006 except that
it shall provide coverage for at least three primary care visits. A
carrier that is not participating in the Exchange shall not offer,
market, or sell a catastrophic plan in the individual market.
 No product shall be offered at this level of coverage unless
it is a standardized product consistent with Section 1366.6.

   (2) A catastrophic plan may be offered only in the individual
market and only if consistent with subdivision (c) and this
paragraph. Catastrophic plans may be offered only if either of the
following apply:
   (A) The individual purchasing the plan has not yet attained 30
years of age.
   (B) The individual has a certificate of exemption from Section
5000(A) of the Internal Revenue Code because the individual is not
offered affordable coverage or because the individual faces hardship.

   (e) (1) Nongrandfathered products in the individual market that
are not standardized products as provided under Section 1366.1 shall
be subject to review by the department consistent with this
subdivision prior to product approval. This section shall also apply
to carriers offering specialized plans that provide coverage of an
essential health benefit as defined in Section 1367.005.  
   (2) The department shall publicly post information on
nonstandardized products no less than 60 days prior to the date on
which the product is approved by the department. For purposes of
products offered by the Exchange, the department shall post
nonstandardized products for review 60 days prior to the finalization
of any contract between the Exchange and the health care service
plan.  
   (3) For each proposed product, the plan shall provide to the
department all of the following:  
   (A) Information as to whether the product was proposed to the
Exchange and any written information from the Exchange as to whether
the product was approved, denied, or modified.  
   (B) The estimated actuarial value of the proposed product and the
actuarial value tier of the proposed product.  
   (C) The anticipated impact on risk mix of plan enrollees
purchasing the proposed product, including information on the risk
mix of enrollees purchasing the same or similar products in prior
years.  
   (D) Any benefit to consumers, including the anticipated impacts on
premiums.  
   (4) The department shall review and take public comment on the
nonstandardized products with regard to all of the following: 

   (A) Whether the proposed product is likely to affect the risk
adjustment scores or reinsurance amounts for the product or health
care service plan.  
   (B) Whether the consumer will be provided additional or more
comprehensive benefits.  
   (C) Whether the proposed product has a disproportional impact on
individuals with high health care needs.  
   (D) The anticipated impact on premiums.  
   (E) Whether the proposed product is otherwise consistent with this
chapter.  
   (5) If this product is approved or modified, the approved product
shall be posted.  
   (e) 
    (f)  Nothing in this section shall prohibit a plan from
offering supplemental benefits for services that are not included in
essential health benefits as defined in Section 1367.005, including
adult dental, adult vision, acupuncture, or chiropractic, if the plan
demonstrates to the satisfaction of the director that those benefits
will not affect the risk adjustment scores or the reinsurance
amounts for the product or the plan. For a plan to continue to offer
a supplemental benefit, the plan shall annually provide to the
department information necessary to determine whether the benefit has
affected the risk mix in the prior plan year. 
   (f) 
    (g)  "PPACA" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any rules, regulations, or guidance issued thereunder.
  SEC. 5.  Section 1367.009 is added to the Health and Safety Code,
to read:
   1367.009.  (a) Levels of coverage for the nongrandfathered small
group market are defined as follows:
   (1) Bronze level: A health care service plan contract in the
bronze level shall provide a level of coverage that is actuarially
equivalent to 60 percent of the full actuarial value of the benefits
provided under the plan contract.
   (2) Silver level: A health care service plan contract in the
silver level shall provide a level of coverage that is actuarially
equivalent to 70 percent of the full actuarial value of the benefits
provided under the plan contract.
   (3) Gold level: A health care service plan contract in the gold
level shall provide a level of coverage that is actuarially
equivalent to 80 percent of the full actuarial value of the benefits
provided under the plan contract.
   (4) Platinum level: A health care service plan contract in the
platinum level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the plan contract.
   (b) Actuarial value for nongrandfathered small employer health
care service plan contracts shall be determined in accordance with
the following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in Section 1367.005 and as provided to a
standard, nonelderly population. For this purpose, a standard
population shall not include those receiving coverage through the
Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA. 
   (4) The actuarial value for pediatric dental benefits, whether
offered by a full service plan or a specialized plan, shall be
consistent with federal law and guidance.  
   (4) 
    (5)  The department, in consultation with the Department
of Insurance and the Exchange, shall consider whether to exercise
state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health care service plans, total cost of care paid for
by the plan, price of care, patterns of service utilization, and
relevant demographic factors. 
   (5) 
    (6)  Employer contributions toward health reimbursement
accounts and health savings accounts shall count toward the actuarial
value of the product in the manner specified in federal rules and
guidance.
   (c) For all products in the nongrandfathered small group market
commencing January 1, 2015, any deductible shall apply to the same
services for any product in the same level of coverage whether
regulated by the department or the Department of Insurance.
   (d) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
  SEC. 6.  Section 10112.28 is added to the Insurance Code, to read:
   10112.28.  (a) (1) For nongrandfathered products in the individual
or small group markets, a health insurance policy, except a
specialized health insurance policy, that is issued, amended, or
renewed on or after January 1, 2014, shall provide for a limit on
annual out-of-pocket expenses for all covered benefits that meet the
definition of essential health benefits in paragraph (1) of
subdivision (a) of Section 10112.27.
   (2) For nongrandfathered products in the large group market, a
health insurance policy, except a specialized health insurance
policy, that is issued, amended, or renewed on or after January 1,
2014, shall provide for a limit on annual out-of-pocket expenses for
covered benefits, including out-of-network emergency care.  This
limit shall apply to essential health benefits covered under the
policy to the extent that this provision does not conflict with
federal law or guidance on out-of-pocket maximums for
nongrandfathered products in the large group market.  For large
group products for the first plan year commencing on or after January
1, 2014, the requirement that a product provide for a limit on
annual out-of-pocket expenses shall be satisfied if both of the
following apply:
   (A) The product complies with the requirements of this paragraph
with respect to basic health care services.
   (B) To the extent the product includes an out-of-pocket maximum on
coverage other than basic health care services, that out-of-pocket
maximum also does not exceed the limit established pursuant to this
paragraph.
   (b) The limit described in subdivision (a) shall apply to any
copayment, coinsurance, deductible, incentive payment and any other
form of cost sharing for all covered benefits, including nonformulary
prescription drugs that are authorized as medically necessary.
   (c) The limit described in subdivision (a) shall not exceed the
limit described in Section 1302(c) of PPACA and any subsequent rules,
regulations, or guidance issued under that section.
   (d) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible enrollees described in Section
1402 of PPACA and any subsequent rules, regulations, or guidance
issued under that section. 
   (e) Effective January 1, 2015, if an essential health benefit is
offered by a specialized health insurance policy, this section shall
apply so that the total annual out-of-pocket maximum for all
essential benefits does not exceed the limit in this section. This
section shall not apply to a specialized policy that does not offer
an essential health benefit as defined in Section 1367.005. 

   (e) 
    (f)  "PPACA" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any rules, regulations, or guidance issued thereunder.
  SEC. 7.  Section 10112.29 is added to the Insurance Code, to read:
   10112.29.  (a) (1) For a small employer health insurance policy
offered, sold, or renewed on or after January 1, 2014, the deductible
under the policy shall not exceed:
   (A) Two thousand dollars ($2,000) in the case of a policy covering
a single individual.
   (B) Four thousand dollars ($4,000) in the case of any other
policy.
   (2) The dollar amounts in this section shall be indexed consistent
with Section 1302(c)(2) of PPACA and any federal rules or guidance
pursuant to that section.
   (3) The limitation in this subdivision shall be applied in a
manner that does not affect the actuarial value of any small employer
health insurance policy.
   (4) For small group products at the bronze level of coverage, as
defined in Section 10112.295, the department may permit insurers to
offer a higher deductible in order to meet the actuarial value
requirement of the bronze level. In making this determination, the
department shall consider affordability of cost sharing for insureds
and shall also consider whether insureds may be deterred from seeking
appropriate care because of higher cost sharing.
   (b) Nothing in this section shall be construed to allow a policy
to have a deductible that applies to preventive services as defined
in PPACA.
   (c) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
  SEC. 8.  Section 10112.295 is added to the Insurance Code, to read:

   10112.295.  (a) Levels of coverage for the nongrandfathered
individual market are defined as follows:
   (1) Bronze level: A health insurance policy in the bronze level
shall provide a level of coverage that is actuarially equivalent to
60 percent of the full actuarial value of the benefits provided under
the policy.  No product shall be offered at this level of
coverage unless it is a standardized product consistent with Section
10112.3. 
   (2) Silver level: A health insurance policy in the silver level
shall provide a level of coverage that is actuarially equivalent to
70 percent of the full actuarial value of the benefits provided under
the policy.  No product shall be offered at this level of
coverage unless it                                             is a
standardized product consistent with Section 10112.3. 
   (3) Gold level: A health insurance policy in the gold level shall
provide a level of coverage that is actuarially equivalent to 80
percent of the full actuarial value of the benefits provided under
the policy.  No product shall be offered at this level of
coverage unless it is a standardized product consistent with Section
10112.3. 
   (4) Platinum level: A health insurance policy in the platinum
level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the policy.  No product shall be offered at
this level of coverage unless it is a standardized product consistent
with Section 10112.3. 
   (b) Actuarial value for nongrandfathered individual health
insurance policies shall be determined in accordance with the
following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in Section 10112.27 and as provided to a
standard, nonelderly population. For this purpose, a standard
population shall not include those receiving coverage through the
Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA. 
   (4) The actuarial value for pediatric dental benefits, whether
offered by a major medical policy or a specialized health insurance
policy, shall be consistent with federal law and guidance. 

   (4) 
    (5)  The department, in consultation with the Department
of Managed Health Care and the Exchange, shall consider whether to
exercise state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health insurance policies, total cost of care paid for
by the health insurer, price of care, patterns of service
utilization, and relevant demographic factors.
   (c) For all products in the nongrandfathered individual market
commencing January 1, 2015, any deductible shall apply to the same
services for any product in the same level of coverage whether
regulated by the department or the Department of Managed Health Care.

   (d) (1) A catastrophic policy is a health insurance policy that
provides no benefits for any plan year until the insured has incurred
cost-sharing expenses in an amount equal to the annual limit on
out-of-pocket costs as specified in Section 10112.28 except that it
shall provide coverage for at least three primary care visits.
 No product shall be offered at this level of coverage unless
it is a standardized product consistent with Section 10112.3.
 A carrier that is not participating in the Exchange shall
not offer, market, or sell a catastrophic plan in the individual
market.
   (2) A catastrophic policy may be offered only in the individual
market and only if consistent with subdivision (c) and this
paragraph. Catastrophic policies may be offered only if either of the
following apply:
   (A) The individual purchasing the policy has not yet attained 30
years of age.
   (B) The individual has a certificate of exemption from Section
5000(A) of the Internal Revenue Code because the individual is not
offered affordable coverage or because the individual faces hardship.

   (e) (1) Nongrandfathered products in the individual market that
are not standardized products as provided under Section 10112.3 shall
be subject to review by the department consistent with this
subdivision prior to product approval. This section shall also apply
to carriers offering specialized health insurance policies that
provide coverage of an essential health benefit as defined in Section
10112.27.  
   (2) The department shall publicly post information on
nonstandardized products no less than 60 days prior to the date on
which the product is approved by the department. For purposes of
products offered by the Exchange, the department shall post
nonstandardized products for review 60 days prior to the finalization
of any contract between the Exchange and the health insurer or
carrier offering a specialized health insurance policy.  
   (3) For each proposed product, the insurer shall provide to the
department all of the following:  
   (A) Information as to whether the product was proposed to the
Exchange and any written information from the Exchange as to whether
the product was approved, denied, or modified.  
   (B) The estimated actuarial value of the proposed product and the
actuarial value tier of the proposed product.  
   (C) The anticipated impact on risk mix of insureds purchasing the
proposed product, including information on the risk mix of insureds
purchasing the same or similar products in prior years.  
   (D) Any benefit to consumers, including the anticipated impacts on
premiums.  
   (4) The department shall review and take public comment on the
nonstandardized products with regard to all of the following: 

   (A) Whether the proposed product is likely to affect the risk
adjustment scores or reinsurance amounts for the product or the
health insurance policy.  
   (B) Whether the consumer will be provided additional or more
comprehensive benefits.  
   (C) Whether the proposed product has a disproportional impact on
individuals with high health care needs.  
   (D) The anticipated impact on premiums.  
   (E) Whether the proposed product is otherwise consistent with this
chapter.  
   (5) If this product is approved or modified, the approved product
shall be posted.  
   (e) 
    (f)  Nothing in this section shall prohibit an insurer
 under a health insurance policy  from offering supplemental
benefits for services that are not included in essential health
benefits as defined in paragraph (1) of subdivision (a) of Section
10112.27, including adult dental, adult vision, acupuncture, or
chiropractic, if the insurer demonstrates to the satisfaction of the
commissioner that those benefits will not affect the risk adjustment
scores or the reinsurance amounts for the product or the policy. For
an insurer to continue to offer a supplemental benefit, the insurer
shall annually provide to the department information necessary to
determine whether the benefit has affected the risk mix in the prior
policy year. 
   (f) 
    (g)  "PPACA" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any rules, regulations, or guidance issued thereunder.
  SEC. 9.  Section 10112.297 is added to the Insurance Code, to read:

   10112.297.  (a) Levels of coverage for the nongrandfathered small
group market are defined as follows:
   (1) Bronze level: A health insurance policy in the bronze level
shall provide a level of coverage that is actuarially equivalent to
60 percent of the full actuarial value of the benefits provided under
the policy.
   (2) Silver level: A health insurance policy in the silver level
shall provide a level of coverage that is actuarially equivalent to
70 percent of the full actuarial value of the benefits provided under
the policy.
   (3) Gold level: A health insurance policy in the gold level shall
provide a level of coverage that is actuarially equivalent to 80
percent of the full actuarial value of the benefits provided under
the policy.
   (4) Platinum level: A health insurance policy in the platinum
level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the policy.
   (b) Actuarial value for nongrandfathered small employer health
insurance policies shall be determined in accordance with the
following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in paragraph (1) of subdivision (a) of
Section 10112.27 and as provided to a standard, nonelderly
population. For this purpose, a standard population shall not include
those receiving coverage through the Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA. 
   (4) The actuarial value for pediatric dental benefits, whether
offered by a major medical policy or a specialized health insurance
policy, shall be consistent with federal law and guidance. 

   (4) 
    (5)  The department, in consultation with the Department
of Managed Health Care and the Exchange, shall consider whether to
exercise state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health insurance policies, total cost of care paid for
by the health insurer, price of care, patterns of service
utilization, and relevant demographic factors. 
   (5) 
    (6)  Employer contributions toward health reimbursement
accounts and health savings accounts shall count toward the actuarial
value of the product in the manner specified in federal rules and
guidance.
   (c) For all products in the nongrandfathered small group market
commencing January 1, 2015, any deductible shall apply to the same
services for any product in the same level of coverage whether
regulated by the department or the Department of Managed Health Care.

   (d) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
  SEC. 10.  Section 10112.7 is added to the Insurance Code, to read:
   10112.7.  (a) A group or individual health insurance policy
issued, amended, or renewed on or after January 1, 2014, that
provides or covers any benefits with respect to services in an
emergency department of a hospital shall cover emergency services as
follows:
   (1) Without the need for any prior authorization determination.
   (2) Whether the health care provider furnishing the services is a
participating provider with respect to those services.
   (3) In a manner so that, if the services are provided to an
insured:
   (A) By a nonparticipating health care provider with or without
prior authorization; or
   (B) (i) The services will be provided without imposing any
requirement under the policy for prior authorization of services or
any limitation on coverage where the provider of services does not
have a contractual relationship with the insurer for the providing of
services that is more restrictive than the requirements or
limitations that apply to emergency department services received from
providers who do have such a contractual relationship with the
insurer; and
   (ii) If the services are provided to an insured out-of-network,
the cost-sharing requirement, expressed as a copayment amount or
coinsurance rate, is the same requirement that would apply if the
services were provided in-network.
   (b) For the purposes of this section, the term "emergency services"
means, with respect to an emergency medical condition:
   (1) A medical screening examination that is within the capability
of the emergency department of a hospital, including ancillary
services routinely available to the emergency department to evaluate
that emergency medical condition.
   (2) Within the capabilities of the staff and facilities available
at the hospital, further medical examination and treatment as are
required under Section 1867(e)(3) of the federal Social Security Act
(42 U.S.C. 1395dd(e)(3)) to stabilize the patient.
  SEC. 11.   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.