Bill Text: CA SB900 | 2009-2010 | Regular Session | Amended

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

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Bill Title: California Health Benefit Exchange.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Passed) 2010-09-30 - Chaptered by Secretary of State. Chapter 659, Statutes of 2010. [SB900 Detail]

Download: California-2009-SB900-Amended.html

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BILL NUMBER: SB 900	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 8, 2010

INTRODUCED BY   Senator Alquist

                        JANUARY 26, 2010

   An act to add Division 114 (commencing with Section 135000) to the
Health and Safety Code, relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 900, as amended, Alquist. California Health  Insurance
  Benefits  Exchange. 
   Existing law, the federal Patient Protection and Affordable Care
Act, requires each state to, by January 1, 2014, establish an
American Health Benefit Exchange that makes available qualified
health plans to qualified individuals and qualified employers, as
specified, and meets certain other requirements. Existing law
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and the regulation of
health insurers by the Department of Insurance. Existing law creates
the California Health and Human Services Agency, which consists of
various departments.  
   This bill would establish the California Health Benefits Exchange
(the Exchange) within the California Health and Human Services Agency
and would require the Exchange to, among other things, implement
specified functions imposed by the federal Patient Protection and
Affordable Care Act in a consumer-friendly manner, enter into
contracts with health care service plans and health insurers seeking
to offer coverage in the Exchange, and provide a choice in each
region of the state between 5 levels of coverage, as specified. The
bill would authorize the Exchange to take other various actions and
would require the Exchange to be governed by a board composed of an
unspecified number of members appointed by the Governor and the
Legislature in an unspecified manner. The bill would create the
California Health Benefits Exchange Fund in the State Treasury and
would authorize the board to use moneys in the fund, upon
appropriation by the Legislature, for purposes of these provisions.
 
   Existing law does not provide a system of health care coverage for
all California residents. Existing law provides for the creation of
various programs to provide health care coverage to persons who have
limited incomes and meet various eligibility requirements. These
programs include the Healthy Families Program, administered by the
Managed Risk Medical Insurance Board, and the Medi-Cal program,
administered by the State Department of Health Care Services and
county welfare departments. Existing law provides for the licensure
and regulation of health care service plans by the Department of
Managed Health Care and for the regulation of health insurers by the
Department of Insurance. Existing law creates the California Health
and Human Services Agency, which consists of various departments.
 
   This bill would establish the California Health Insurance Exchange
within the California Health and Human Services Agency. The bill
would require the exchange to, among other things, provide, or make
available, health care coverage through participating health plans,
determine eligibility, enrollment, and disenrollment criteria and
processes, authorize expenditures from the California Health
Insurance Exchange Fund, which the bill would create in the State
Treasury, and be governed by an unspecified board whose members would
be appointed by the Legislature. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Division 114 (commencing with Section 135000) is added
to the Health and Safety Code, to read:

      DIVISION 114.  CALIFORNIA HEALTH  INSURANCE 
 BENEFITS  EXCHANGE


   135000.   (a)    There is hereby
established in the California Health and Human Services Agency, the
California Health  Insurance   Benefits 
Exchange. 
   (b) For purposes of this division, "exchange" means the California
Health Insurance Exchange established by this section. 

   (c) The exchange shall do all of the following:  

   (1) Determine eligibility, enrollment, and disenrollment criteria
and processes for the exchange, consistent with federal law.
 
   (2) Determine the participation requirements and the standards and
selection criteria for participating health plans, including
reasonable limits on a plan's administrative costs. 

   (3) Enter into contracts, including selective provider contracts
with health plans.  
   (4) Negotiate rates paid to participating health plans. 

   (5) Provide, or make available, health care coverage through
participating health plans.  
   (6) Provide for the offering of one or more community benefit
plans, including, but not limited to, local initiative plans, county
organized health systems, joint ventures of local initiative plans
and county organized health systems, self-funded plans, and other
plans authorized by federal law.  
   (7) Provide for the processing of applications and the enrollment
and disenrollment of exchange enrollees, and the administration of
federal subsidies for exchange enrollees.  
   (8) Employ necessary staff.  
   (9) Authorize expenditures, as necessary, from the fund
established under Section 135005 to pay exchange expenses that exceed
enrollee contributions and to administer the exchange. 

   (10) Receive federal funds for administration of the exchange.
 
   (11) Be governed by a board whose members are appointed by the
Legislature. This board shall hold public meetings on a bimonthly
basis.  
   135001.  For purposes of this division, the following definitions
shall apply:
   (a) "Board" means the board described in subdivision (g) of
Section 135004.
   (b) "Carrier" means either a private health insurer holding a
valid outstanding certificate of authority from the Insurance
Commissioner or a health care service plan, as defined under
subdivision (f) of Section 1345, licensed by the Department of
Managed Health Care, including, but not limited to, a local
initiative plan, a county organized health system, or a joint venture
of local initiative plans and county organized health systems.
   (c) "Exchange" means the California Health Benefits Exchange
established by Section 135000.
   (d) "Fund" means the California Health Benefits Fund established
pursuant to Section 135009.
   (e) "Health plan" and "qualified health plan" have the same
meanings as those terms are defined in Section 1301 of the Act.
   (f) "The Act" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148).  
   135002.  The purpose of this division is to implement the
provisions of the Act requiring the establishment of an American
Health Benefit Exchange in this state by creating an exchange in
state government.  
   135003.  It is the intent of the Legislature that the Exchange
provide a consumer friendly process that facilitates the seamless
enrollment of individuals in health care coverage.  
   135004.  The Exchange shall do all of the following:
   (a) Meet the requirements imposed by Section 1311 of the Act. The
Exchange shall perform all of the following functions in a
consumer-friendly manner:
   (1) Provide for the operation of a toll-free telephone hotline to
respond to requests for assistance.
   (2) Maintain an Internet Web site through which enrollees and
prospective enrollees of qualified health plans may obtain
standardized comparative information on those plans.
   (3) Assign a rating to each qualified health plan offered through
the Exchange in accordance with the criteria developed under
paragraph (3) of subdivision (c) of Section 1311 of the Act.
   (4) Utilize a standardized format for presenting health benefits
plan options in the Exchange, including the use of the uniform
outline of coverage established under Section 2715 of the federal
Public Health Service Act.
   (5) Consistent with the system established under Section 1413 of
the Act, inform individuals of eligibility requirements for the
Medi-Cal program, the Healthy Families Program, or any applicable
state or local public health care coverage program and, if, through
screening of an application by the Exchange, the Exchange determines
that an individual is eligible for any of those programs, enroll the
individual in that program.
   (6) Establish and make available by electronic means a calculator
to determine the actual cost of coverage after the application of any
premium tax credit under Section 36B of the Internal Revenue Code of
1986 and any cost-sharing reduction under Section 1402 of the Act.
   (7) Grant a certification, subject to Section 1411 of the Act and
any implementing regulations, attesting that, for purposes of the
individual responsibility penalty under Section 5000A of the Internal
Revenue Code of 1986, an individual is exempt from the individual
responsibility requirement or from the penalty imposed by that
section because of either of the following:
   (A) There is no affordable qualified health plan available through
the Exchange, or the individual's employer, covering the individual.

   (B) The individual meets the requirements for any other exemption
from the individual responsibility requirement or penalty.
   (b) Negotiate and enter into contracts, including selective
provider contracts, with carriers seeking to offer coverage in the
Exchange.
   (c) Establish quality incentives and rewards consistent with
subdivisions (g) and (h) of Section 1311 of the Act, including, but
not limited to, incentives that encourage the use of delivery systems
that deliver cost-effective, high-quality care.
   (d) Provide a choice of health plans in each region of the state,
including a choice in each region of the state between the five
levels of coverage contained in subdivisions (d) and (e) of Section
1302 of the Act.
   (e) Employ necessary staff, including actuarial staff.
   (f) Be governed by a board with four-year terms whose members are
appointed by the Governor and the Legislature. This board shall hold
public meetings on a bimonthly basis, or more frequently as
necessary.
   (g) Receive federal funds for purposes of establishing and
administering the Exchange, including funds made available pursuant
to Section 1311 of the Act.  
   135005.  The Exchange may do any of the following:
   (a) Issue rules and regulations, as necessary. Until January 1,
2014, any rules and regulations issued pursuant to this subdivision
may be adopted as emergency regulations in accordance with the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
The adoption of these regulations shall be deemed an emergency and
necessary for the immediate preservation of the public peace, health
and safety, or general welfare.
   (b) Apply for and receive funds from private foundations.
   (c) Exercise the federal option set forth in paragraph (2) of
subdivision (b) of Section 1311 of the Act to provide a single
exchange for providing services to both qualified individuals and
qualified small employers, if the Exchange makes all of the following
determinations:
   (1) Providing coverage through a single exchange will provide a
significant benefit for the health coverage marketplace in the state.

   (2) Providing coverage through a single exchange will be cost
effective for both qualified individuals and qualified small
employers.
   (3) The Exchange can make coverage available through a single
exchange on a guarantee issue basis without undue risk of adverse
selection.
   (d) Enter into other contracts as are necessary or proper to carry
out the duties of the Exchange, including, but not limited to,
contracts for enrollment processing.
   (e) Determine the health benefits coverage for small employers
that the Exchange will contract to purchase from participating
carriers.
   (f) Appoint committees, as necessary, to provide technical
assistance in the operation of the Exchange.
   (g) Undertake activities necessary to administer the Exchange,
including marketing and publicizing the Exchange and establishing
rules, conditions, and procedures for ensuring carrier, employer, and
enrollee compliance with Exchange requirements, consistent with
federal law and regulations.
   (h) Consistent with federal procedures established under
subdivision (e) of Section 1312 of the Act, establish procedures to
allow agents or brokers to do both of the following:
   (1) Enroll individuals in any qualified health plan in the
individual or small group market as soon as the plan is offered
through the Exchange.
   (2) Assist individuals in applying for premium tax credits and
cost-sharing reductions for health plans sold through the Exchange.
 
   135006.  (a) Notwithstanding any other provision of law, the
Exchange shall not be subject to licensure or regulation by the
Department of Insurance or the Department of Managed Health Care.
   (b) Carriers that contract with the Exchange shall be in good
standing with their respective regulatory agencies.  
   135007.  If an individual or an employer is dissatisfied with any
action or failure to act that has occurred in connection with
eligibility for, or enrollment in, the Exchange, the individual or
employer shall have the right to appeal to the board and shall be
accorded an opportunity for a fair hearing. Hearings shall be
conducted pursuant to the provisions of Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.  
   135008.  Nothing in this division shall be construed to compel an
individual to enroll in a qualified health plan or to participate in
the Exchange. 
    135005.   135009.   (a) The California
Health  Insurance   Benefits  Exchange Fund
is hereby created in the State Treasury as a special fund consisting
of revenue necessary for the purposes of this division. Any moneys
in the fund that are unexpended or unencumbered at the end of a
fiscal year may be carried forward to the next succeeding fiscal
year.
   (b) The  governing board of the exchange  
board  shall establish a prudent reserve in the fund.
   (c) Moneys in the fund shall, upon appropriation by the
Legislature, be used by the  governing board of the exchange
  board  for the purposes of this division.
   (d) Notwithstanding Section 16305.7 of the Government Code, all
interest earned on the moneys that have been deposited into the fund
shall be retained in the fund.