Assembly Bill No. 1461 - steveshorr.com

Assembly Bill No. 1461

Passed the Assembly August 31, 2012

Chief Clerk of the Assembly

Passed the Senate August 29, 2012

Secretary of the Senate

This bill was received by the Governor this day

of , 2012, at o’clock m.

Private Secretary of the Governor

[email protected] 310.519.1335 For More info........http://www.steveshorr.com/individual_and_family/

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CHAPTER

An act to amend Sections 1363 and 1399.829 of, to amend theheading of Article 11.7 (commencing with Section 1399.825) ofChapter 2.2 of Division 2 of, to add Section 1399.836 to, to addArticle 11.8 (commencing with Section 1399.845) to Chapter 2.2of Division 2 of, and to repeal Section 1399.816 of, the Health andSafety Code, and to amend Section 10965.3 of the Insurance Code,relating to health care coverage.

legislative counsel’s digest

AB 1461, Monning. Individual health care coverage.(1) Existing federal law, the federal Patient Protection and

Affordable Care Act (PPACA) enacts various health care coveragemarket reforms that take effect January 1, 2014. Among otherthings, PPACA requires each health insurance issuer that offershealth insurance coverage in the individual or group market in astate to accept every employer and individual in the state thatapplies for that coverage and to renew that coverage at the optionof the plan sponsor or the individual. PPACA prohibits a grouphealth plan and a health insurance issuer offering group orindividual health insurance coverage from imposing any preexistingcondition exclusion with respect to that plan or coverage. PPACAallows the premium rate charge by a health insurance issueroffering small group or individual coverage to vary only by familycomposition, rating area, age, and tobacco use, as specified, andprohibits discrimination against individuals based on health status.

Existing law, the Knox-Keene Health Care Service Plan Act of1975, provides for the licensure and regulation of health careservice plans by the Department of Managed Health Care andmakes a willful violation of the act a crime. Existing law requiresplans offering coverage in the individual market to offer coveragefor a child subject to specified requirements.

This bill would require a plan, on and after October 1, 2013, tooffer, market, and sell all of the plan’s health benefit plans that aresold in the individual market to all individuals and dependents ineach service area in which the plan provides or arranges for theprovision of health care services, with coverage effective on or

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after January 1, 2014, as specified, but would require plans to limitenrollment in individual health benefit plans to specified openenrollment and special enrollment periods. The bill would prohibitthese health benefit plans from imposing any preexisting conditionupon any individual. Commencing January 1, 2014, the bill wouldprohibit a plan from conditioning the issuance or offering ofindividual health benefit plans on any health status-related factor,as specified, and would authorize plans to use only age, geographicregion, and whether the plan covers an individual or family forpurposes of establishing rates for individual health benefit plans,as specified. The bill would require a health care service plan toissue a specified notice at least 60 days prior to the renewal dateof an individual grandfathered health plan to all subscribers of theplan. The bill would make certain of these provisions inoperativeif the corresponding provisions of PPACA are repealed and wouldmake other related conforming changes.

Because a willful violation of the bill’s requirements with respectto health care service plans would be a crime, the bill would imposea state-mandated local program.

(2) PPACA requires health insurance issuers to provide asummary of benefits and coverage explanation pursuant to specifiedstandards to applicants and enrollees or policyholders.

Existing law requires health care service plans to use disclosureforms that contain specified information regarding the contractsissued by the plan, including the benefits and coverage of thecontract, and the exceptions, reductions, and limitations that applyto the contract. Existing law requires health care service plans thatoffer individual or small group coverage to also provide a uniformhealth plan benefits and coverage matrix containing the plan’smajor provisions, as specified.

This bill would authorize the Department of Managed HealthCare to waive or modify those requirements for purposes ofcompliance with PPACA through issuance of all-plan letters untilJanuary 1, 2015.

(3) The bill would provide that it shall become operative onlyif SB 961 of the 2011–12 Regular Session is also enacted.

(4) The California Constitution requires the state to reimburselocal agencies and school districts for certain costs mandated bythe state. Statutory provisions establish procedures for making thatreimbursement.

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This bill would provide that no reimbursement is required bythis act for a specified reason.

The people of the State of California do enact as follows:

SECTION 1. Section 1363 of the Health and Safety Code isamended to read:

1363. (a) The director shall require the use by each plan ofdisclosure forms or materials containing information regardingthe benefits, services, and terms of the plan contract as the directormay require, so as to afford the public, subscribers, and enrolleeswith a full and fair disclosure of the provisions of the plan inreadily understood language and in a clearly organized manner.The director may require that the materials be presented in areasonably uniform manner so as to facilitate comparisons betweenplan contracts of the same or other types of plans. Nothingcontained in this chapter shall preclude the director from permittingthe disclosure form to be included with the evidence of coverageor plan contract.

The disclosure form shall provide for at least the followinginformation, in concise and specific terms, relative to the plan,together with additional information as may be required by thedirector, in connection with the plan or plan contract:

(1) The principal benefits and coverage of the plan, includingcoverage for acute care and subacute care.

(2) The exceptions, reductions, and limitations that apply to theplan.

(3) The full premium cost of the plan.(4) Any copayment, coinsurance, or deductible requirements

that may be incurred by the member or the member’s family inobtaining coverage under the plan.

(5) The terms under which the plan may be renewed by the planmember, including any reservation by the plan of any right tochange premiums.

(6) A statement that the disclosure form is a summary only, andthat the plan contract itself should be consulted to determinegoverning contractual provisions. The first page of the disclosureform shall contain a notice that conforms with all of the followingconditions:

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(A) (i) States that the evidence of coverage discloses the termsand conditions of coverage.

(ii) States, with respect to individual plan contracts, small groupplan contracts, and any other group plan contracts for which healthcare services are not negotiated, that the applicant has a right toview the evidence of coverage prior to enrollment, and, if theevidence of coverage is not combined with the disclosure form,the notice shall specify where the evidence of coverage can beobtained prior to enrollment.

(B) Includes a statement that the disclosure and the evidence ofcoverage should be read completely and carefully and thatindividuals with special health care needs should read carefullythose sections that apply to them.

(C) Includes the plan’s telephone number or numbers that maybe used by an applicant to receive additional information aboutthe benefits of the plan or a statement where the telephone numberor numbers are located in the disclosure form.

(D) For individual contracts, and small group plan contracts asdefined in Article 3.1 (commencing with Section 1357), thedisclosure form shall state where the health plan benefits andcoverage matrix is located.

(E) Is printed in type no smaller than that used for the remainderof the disclosure form and is displayed prominently on the page.

(7) A statement as to when benefits shall cease in the event ofnonpayment of the prepaid or periodic charge and the effect ofnonpayment upon an enrollee who is hospitalized or undergoingtreatment for an ongoing condition.

(8) To the extent that the plan permits a free choice of providerto its subscribers and enrollees, the statement shall disclose thenature and extent of choice permitted and the financial liabilitythat is, or may be, incurred by the subscriber, enrollee, or a thirdparty by reason of the exercise of that choice.

(9) A summary of the provisions required by subdivision (g) ofSection 1373, if applicable.

(10) If the plan utilizes arbitration to settle disputes, a statementof that fact.

(11) A summary of, and a notice of the availability of, theprocess the plan uses to authorize, modify, or deny health careservices under the benefits provided by the plan, pursuant toSections 1363.5 and 1367.01.

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(12) A description of any limitations on the patient’s choice ofprimary care physician, specialty care physician, or nonphysicianhealth care practitioner, based on service area and limitations onthe patient’s choice of acute care hospital care, subacute ortransitional inpatient care, or skilled nursing facility.

(13) General authorization requirements for referral by a primarycare physician to a specialty care physician or a nonphysicianhealth care practitioner.

(14) Conditions and procedures for disenrollment.(15) A description as to how an enrollee may request continuity

of care as required by Section 1373.96 and request a second opinionpursuant to Section 1383.15.

(16) Information concerning the right of an enrollee to requestan independent review in accordance with Article 5.55(commencing with Section 1374.30).

(17) A notice as required by Section 1364.5.(b) (1) As of July 1, 1999, the director shall require each plan

offering a contract to an individual or small group to provide withthe disclosure form for individual and small group plan contractsa uniform health plan benefits and coverage matrix containing theplan’s major provisions in order to facilitate comparisons betweenplan contracts. The uniform matrix shall include the followingcategory descriptions together with the corresponding copaymentsand limitations in the following sequence:

(A) Deductibles.(B) Lifetime maximums.(C) Professional services.(D) Outpatient services.(E) Hospitalization services.(F) Emergency health coverage.(G) Ambulance services.(H) Prescription drug coverage.(I) Durable medical equipment.(J) Mental health services.(K) Chemical dependency services.(L) Home health services.(M) Other.(2) The following statement shall be placed at the top of the

matrix in all capital letters in at least 10-point boldface type:

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THIS MATRIX IS INTENDED TO BE USED TO HELP YOUCOMPARE COVERAGE BENEFITS AND IS A SUMMARYONLY. THE EVIDENCE OF COVERAGE AND PLANCONTRACT SHOULD BE CONSULTED FOR A DETAILEDDESCRIPTION OF COVERAGE BENEFITS ANDLIMITATIONS.

(c) Nothing in this section shall prevent a plan from usingappropriate footnotes or disclaimers to reasonably and fairlydescribe coverage arrangements in order to clarify any part of thematrix that may be unclear.

(d) All plans, solicitors, and representatives of a plan shall, whenpresenting any plan contract for examination or sale to anindividual prospective plan member, provide the individual witha properly completed disclosure form, as prescribed by the directorpursuant to this section for each plan so examined or sold.

(e) In the case of group contracts, the completed disclosure formand evidence of coverage shall be presented to the contractholderupon delivery of the completed health care service plan agreement.

(f) Group contractholders shall disseminate copies of thecompleted disclosure form to all persons eligible to be a subscriberunder the group contract at the time those persons are offered theplan. If the individual group members are offered a choice of plans,separate disclosure forms shall be supplied for each plan available.Each group contractholder shall also disseminate or cause to bedisseminated copies of the evidence of coverage to all applicants,upon request, prior to enrollment and to all subscribers enrolledunder the group contract.

(g) In the case of conflicts between the group contract and theevidence of coverage, the provisions of the evidence of coverageshall be binding upon the plan notwithstanding any provisions inthe group contract that may be less favorable to subscribers orenrollees.

(h) In addition to the other disclosures required by this section,every health care service plan and any agent or employee of theplan shall, when presenting a plan for examination or sale to anyindividual purchaser or the representative of a group consisting of25 or fewer individuals, disclose in writing the ratio of premiumcosts to health services paid for plan contracts with individualsand with groups of the same or similar size for the plan’s preceding

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fiscal year. A plan may report that information by geographic area,provided the plan identifies the geographic area and reportsinformation applicable to that geographic area.

(i) Subdivision (b) shall not apply to any coverage provided bya plan for the Medi-Cal program or the Medicare program pursuantto Title XVIII and Title XIX of the Social Security Act.

(j) The department may waive or modify the requirements ofthis section for the purpose of resolving duplication or conflictwith federal requirements for uniform benefit disclosure in effectpursuant to Section 2715 of the federal Public Health Service Actand the regulations adopted thereunder. The department shallimplement this subdivision in a manner that preserves disclosurerequirements of this section that exceed or are not in direct conflictwith federal requirements. Notwithstanding the AdministrativeProcedure Act (Chapter 3.5 (commencing with Section 11340) ofPart 1 of Division 3 of Title 2 of the Government Code), thedepartment shall implement this section through issuance ofall-plan letters until January 1, 2015.

SEC. 2. Section 1399.816 of the Health and Safety Code isrepealed.

SEC. 3. The heading of Article 11.7 (commencing with Section1399.825) of Chapter 2.2 of Division 2 of the Health and SafetyCode is amended to read:

Article 11.7. Child Access to Health Care Coverage

SEC. 4. Section 1399.829 of the Health and Safety Code isamended to read:

1399.829. (a) A health care service plan may use the followingcharacteristics of an eligible child for purposes of establishing therate of the plan contract for that child, where consistent with federalregulations under PPACA: age, geographic region, and familycomposition, plus the health care service plan contract selected bythe child or the responsible party for the child.

(b) From the effective date of this article to December 31, 2013,inclusive, rates for a child applying for coverage shall be subjectto the following limitations:

(1) During any open enrollment period or for late enrollees, therate for any child due to health status shall not be more than twotimes the standard risk rate for a child.

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(2) The rate for a child shall be subject to a 20-percent surchargeabove the highest allowable rate on a child applying for coveragewho is not a late enrollee and who failed to maintain coverage withany health care service plan or health insurer for the 90-day periodprior to the date of the child’s application. The surcharge shallapply for the 12-month period following the effective date of thechild’s coverage.

(3) If expressly permitted under PPACA and any rules,regulations, or guidance issued pursuant to that act, a health careservice plan may rate a child based on health status during anyperiod other than an open enrollment period if the child is not alate enrollee.

(4) If expressly permitted under PPACA and any rules,regulations, or guidance issued pursuant to that act, a health careservice plan may condition an offer or acceptance of coverage onany preexisting condition or other health status-related factor fora period other than an open enrollment period and for a child whois not a late enrollee.

(c) For any individual health care service plan contract issued,sold, or renewed prior to December 31, 2013, the health plan shallprovide to a child or responsible party for a child a notice thatstates the following:

“Please consider your options carefully before failing to maintainor renewing coverage for a child for whom you are responsible.If you attempt to obtain new individual coverage for that child,the premium for the same coverage may be higher than thepremium you pay now.”

(d) A child who applied for coverage between September 23,2010, and the end of the initial open enrollment period shall bedeemed to have maintained coverage during that period.

(e) Effective January 1, 2014, except for individualgrandfathered health plan coverage, the rate for any child shall beidentical to the standard risk rate.

(f) Health care service plans shall not require documentationfrom applicants relating to their coverage history.

(g) (1) On and after January 1, 2013, and until January 1, 2014,a health care service plan shall provide a notice to all applicantsfor coverage under this article and to all enrollees, or the

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responsible party for an enrollee, renewing coverage under thisarticle that contains the following information:

(A) Information about the open enrollment period providedunder Section 1399.849.

(B) An explanation that obtaining coverage during the openenrollment period described in Section 1399.849 will not affectthe effective dates of coverage for coverage purchased pursuantto this article unless the applicant cancels that coverage.

(C) An explanation that coverage purchased pursuant to thissection shall be effective as required under subdivision (d) ofSection 1399.826 and that such coverage shall not prevent anapplicant from obtaining new coverage during the open enrollmentperiod described in Section 1399.849.

(D) Information about the Medi-Cal program and the HealthyFamilies Program and about subsidies available through theCalifornia Health Benefit Exchange.

(2) The notice described in paragraph (1) shall be in plainlanguage and 14-point type.

(3) The department may adopt a model notice to be used byhealth care service plans in order to comply with this subdivision,and shall consult with the Department of Insurance in adoptingthat model notice. Use of the model notice shall not require priorapproval of the department. Any model notice designated by thedepartment for purposes of this section shall not be subject to theAdministrative Procedure Act (Chapter 3.5 (commencing withSection 11340) of Part 1 of Division 3 of Title 2 of the GovernmentCode).

SEC. 5. Section 1399.836 is added to the Health and SafetyCode, to read:

1399.836. Commencing January 1, 2014, in the event of aconflict between the provisions of this chapter and the provisionsof Chapter 11.8 (commencing with Section 1399.845), theprovisions of Chapter 11.8 (commencing with Section 1399.845)shall prevail, except where subdivision (j) of Section 1399.849 orsubdivision (e) of Section 1399.855 makes any of the provisionsof Chapter 11.8 (commencing with Section 1399.845) inoperative,in which case the provisions of this chapter and the operativeprovisions of Chapter 11.8 (commencing with Section 1399.845)shall be harmonized to the extent permitted by federal law.

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SEC. 6. Article 11.8 (commencing with Section 1399.845) isadded to Chapter 2.2 of Division 2 of the Health and Safety Code,to read:

Article 11.8. Individual Access to Health Care Coverage

1399.845. For purposes of this article, the following definitionsshall apply:

(a) “Child” means a child described in Section 22775 of theGovernment Code and subdivisions (n) to (p), inclusive, of Section599.500 of Title 2 of the California Code of Regulations.

(b) “Dependent” means the spouse or registered domesticpartner, or child, of an individual, subject to applicable terms ofthe health benefit plan.

(c) “Exchange” means the California Health Benefit Exchangecreated by Section 100500 of the Government Code.

(d) “Grandfathered health plan” has the same meaning as thatterm is defined in Section 1251 of PPACA.

(e) “Health benefit plan” means any individual or group healthcare service plan contract that provides medical, hospital, andsurgical benefits. The term does not include a specialized healthcare service plan contract, a health care service plan conversioncontract offered pursuant to Section 1373.6, a health care serviceplan contract provided in the Medi-Cal program (Chapter 7(commencing with Section 14000) of Part 3 of Division 9 of theWelfare and Institutions Code), the Healthy Families Program(Part 6.2 (commencing with Section 12693) of Division 2 of theInsurance Code), the Access for Infants and Mothers Program(Part 6.3 (commencing with Section 12695) of Division 2 of theInsurance Code), or the program under Part 6.4 (commencing withSection 12699.50) of Division 2 of the Insurance Code, a healthcare service plan contract offered to a federally eligible definedindividual under Article 4.6 (commencing with Section 1366.35),or Medicare supplement coverage, to the extent consistent withPPACA.

(f) “Policy year” has the meaning set forth in Section 144.103of Title 45 of the Code of Federal Regulations.

(g) “PPACA” means the federal Patient Protection andAffordable Care Act (Public Law 111-148), as amended by thefederal Health Care and Education Reconciliation Act of 2010

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(Public Law 111-152), and any rules, regulations, or guidanceissued pursuant to that law.

(h) “Preexisting condition provision” means a contract provisionthat excludes coverage for charges or expenses incurred during aspecified period following the enrollee’s effective date of coverage,as to a condition for which medical advice, diagnosis, care, ortreatment was recommended or received during a specified periodimmediately preceding the effective date of coverage.

(i) “Qualified health plan” has the same meaning as that termis defined in Section 1301 of PPACA.

(j) “Rating period” means the period for which premium ratesestablished by a plan are in effect.

(k) “Registered domestic partner” means a person who hasestablished a domestic partnership as described in Section 297 ofthe Family Code.

1399.847. Every health care service plan offering individualhealth benefit plans shall, in addition to complying with theprovisions of this chapter and rules adopted thereunder, complywith the provisions of this article.

1399.849. (a) (1) On and after October 1, 2013, a plan shallfairly and affirmatively offer, market, and sell all of the plan’shealth benefit plans that are sold in the individual market for policyyears on or after January 1, 2014, to all individuals and dependentsin each service area in which the plan provides or arranges for theprovision of health care services. A plan shall limit enrollment inindividual health benefit plans to open enrollment periods andspecial enrollment periods as provided in subdivisions (c) and (d).

(2) A plan that offers qualified health plans through theExchange shall be deemed to be in compliance with paragraph (1)with respect to an individual health benefit plan offered throughthe Exchange in those geographic regions in which the plan offershealth benefit plans through the Exchange.

(3) A plan shall allow the subscriber of an individual healthbenefit plan to add a dependent to the subscriber’s plan at theoption of the subscriber, consistent with the open enrollment,annual enrollment, and special enrollment period requirements inthis section.

(4) A health care service plan offering coverage in the individualmarket shall not reject the request of a subscriber during an open

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enrollment period to include a dependent of the subscriber as adependent on an existing individual health benefit plan.

(b) An individual health benefit plan issued, amended, orrenewed on or after January 1, 2014, shall not impose anypreexisting condition provision upon any individual.

(c) A plan shall provide an initial open enrollment period fromOctober 1, 2013, to March 31, 2014, inclusive, and annualenrollment periods for plan years on or after January 1, 2015, fromOctober 15 to December 7, inclusive, of the preceding calendaryear.

(d) (1) Subject to subdivision (e), commencing January 1, 2014,a plan shall allow an individual to enroll in or change individualhealth benefit plans offered outside the Exchange as a result of thefollowing triggering events:

(A) He or she or his or her dependent loses minimum essentialcoverage. For purposes of this paragraph, both of the followingdefinitions shall apply:

(i) “Minimum essential coverage” has the same meaning as thatterm is defined in subsection (f) of Section 5000A of the InternalRevenue Code (26 U.S.C. Sec. 5000A).

(ii) “Loss of minimum essential coverage” includes loss of thatcoverage due to the circumstances described in Section54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code ofFederal Regulations. “Loss of minimum essential coverage” doesnot include loss of that coverage due to the individual’s failure topay premiums on a timely basis or situations allowing for arescission, subject to Section 1389.21.

(B) He or she gains a dependent or becomes a dependent.(C) He or she is mandated to be covered pursuant to a valid

state or federal court order.(D) He or she has been released from incarceration.(E) His or her health benefit plan substantially violated a

material provision of the contract.(F) He or she gains access to new health benefit plans as a result

of a permanent move.(G) He or she was receiving services from a contracting provider

under another health benefit plan, as defined in Section 1399.845or Section 10965 of the Insurance Code, for one of the conditionsdescribed in subdivision (c) of Section 1373.96 and that provideris no longer participating in the health benefit plan.

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(2) Subject to subdivision (e), commencing January 1, 2014, ahealth insurer shall allow an individual to enroll in or changeindividual health benefit plans offered through the Exchange as aresult of the triggering events listed in Section 155.420(d) of Title45 of the Code of Federal Regulations. To the extent permitted byfederal law, any triggering event described in paragraph (1) thatis not listed in Section 155.420(d)(1) to (8), inclusive, of Title 45of the Code of Federal Regulations shall be considered anexceptional circumstance under Section 155.420(d)(9) of Title 45of the Code of Federal Regulations.

(e) With respect to individual health benefit plans offered outsidethe Exchange, an individual shall have 60 days from the date of atriggering event identified in subdivision (d) to apply for coveragefrom a health care service plan subject to this section. With respectto individual health benefit plans offered through the Exchange,an individual shall have 60 days from the date of a triggering eventidentified in subdivision (d) to select a plan offered through theExchange.

(f) With respect to individual health benefit plans offered outsidethe Exchange, after an individual submits a completed applicationform for a plan, the health care service plan shall, within 30 days,notify the individual of the individual’s actual premium chargesfor that plan established in accordance with Section 1399.855. Theindividual shall have 30 days in which to exercise the right to buycoverage at the quoted premium charges.

(g) (1) With respect to an individual health benefit plan offeredoutside the Exchange for which an individual applies during theinitial open enrollment period described in subdivision (c), whenthe subscriber submits a premium payment, based on the quotedpremium charges, and that payment is delivered or postmarked,whichever occurs earlier, by December 15, 2013, coverage underthe individual health benefit plan shall become effective no laterthan January 1, 2014. When that payment is delivered orpostmarked within the first 15 days of any subsequent month,coverage shall become effective no later than the first day of thefollowing month. When that payment is delivered or postmarkedbetween December 16, 2013, and December 31, 2013, inclusive,or after the 15th day of any subsequent month, coverage shallbecome effective no later than the first day of the second monthfollowing delivery or postmark of the payment.

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(2) With respect to an individual health benefit plan offeredoutside the Exchange for which an individual applies during theannual open enrollment period described in subdivision (c), whenthe individual submits a premium payment, based on the quotedpremium charges, and that payment is delivered or postmarked,whichever occurs later, by December 15, coverage shall becomeeffective as of the following January 1. When that payment isdelivered or postmarked within the first 15 days of any subsequentmonth, coverage shall become effective no later than the first dayof the following month. When that payment is delivered orpostmarked between December 16 and December 31, inclusive,or after the 15th day of any subsequent month, coverage shallbecome effective no later than the first day of the second monthfollowing delivery or postmark of the payment.

(3) With respect to an individual health benefit plan offeredoutside the Exchange for which an individual applies during aspecial enrollment period described in subdivision (d), thefollowing provisions shall apply:

(A) When the individual submits a premium payment, basedon the quoted premium charges, and that payment is delivered orpostmarked, whichever occurs earlier, within the first 15 days ofthe month, coverage under the plan shall become effective no laterthan the first day of the following month.

(B) When the premium payment is neither delivered norpostmarked until after the 15th day of the month, coverage shallbecome effective no later than the first day of the second monthfollowing delivery or postmark of the payment.

(C) Notwithstanding subparagraph (A) or (B), in the case of abirth, adoption, or placement for adoption, the coverage shall beeffective on the date of birth, adoption, or placement for adoption.

(D) Notwithstanding subparagraph (A) or (B), in the case ofmarriage or becoming a registered domestic partner or in the casewhere a qualified individual loses minimum essential coverage,the coverage effective date shall be the first day of the followingmonth.

(4) With respect to individual health benefit plans offeredthrough the Exchange, the effective date of coverage selectedpursuant to this section shall be the same as the applicable datespecified in Section 155.410 or 155.420 of Title 45 of the Codeof Federal Regulations.

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(h) (1) On or after January 1, 2014, a health care service planshall not establish rules for eligibility, including continuedeligibility, of any individual to enroll under the terms of anindividual health benefit plan based on any of the following factors:

(A) Health status.(B) Medical condition, including physical and mental illnesses.(C) Claims experience.(D) Receipt of health care.(E) Medical history.(F) Genetic information.(G) Evidence of insurability, including conditions arising out

of acts of domestic violence.(H) Disability.(I) Any other health status-related factor as determined by any

federal regulations, rules, or guidance issued pursuant to Section2705 of the federal Public Health Service Act.

(2) Notwithstanding Section 1389.1, a health care service planshall not require an individual applicant or his or her dependentto fill out a health assessment or medical questionnaire prior toenrollment under an individual health benefit plan. A health careservice plan shall not acquire or request information that relatesto a health status-related factor from the applicant or his or herdependent or any other source prior to enrollment of the individual.

(i) This section shall not apply to an individual health benefitplan that is a grandfathered health plan.

(j) The following provisions of this section shall becomeinoperative if Section 2702 of the federal Public Health ServiceAct (42 U.S.C. Sec. 300gg-1), as added by Section 1201 ofPPACA, is repealed:

(1) Subdivision (a).(2) Subdivisions (c), (d), (e), and (g), except as they relate to

health benefit plans offered through the Exchange.1399.851. (a) Commencing January 1, 2014, no health care

service plan or solicitor shall, directly or indirectly, engage in thefollowing activities:

(1) Encourage or direct an individual to refrain from filing anapplication for individual coverage with a plan because of thehealth status, claims experience, industry, occupation, orgeographic location, provided that the location is within the plan’sapproved service area, of the individual.

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(2) Encourage or direct an individual to seek individual coveragefrom another plan or health insurer or the California Health BenefitExchange because of the health status, claims experience, industry,occupation, or geographic location, provided that the location iswithin the plan’s approved service area, of the individual.

(b) Commencing January 1, 2014, a health care service planshall not, directly or indirectly, enter into any contract, agreement,or arrangement with a solicitor that provides for or results in thecompensation paid to a solicitor for the sale of an individual healthbenefit plan to be varied because of the health status, claimsexperience, industry, occupation, or geographic location of theindividual. This subdivision does not apply to a compensationarrangement that provides compensation to a solicitor on the basisof percentage of premium, provided that the percentage shall notvary because of the health status, claims experience, industry,occupation, or geographic area of the individual.

1399.853. (a) All individual health benefit plans shall conformto the requirements of Sections 1365, 1366.3, 1367.001, and1373.6, and any other requirements imposed by this chapter, andshall be renewable at the option of the enrollee except as permittedto be canceled, rescinded, or not renewed pursuant to Section 1365.

(b) Any plan that ceases to offer for sale new individual healthbenefit plans pursuant to Section 1365 shall continue to begoverned by this article with respect to business conducted underthis article.

1399.855. (a) With respect to individual health benefit plansissued, amended, or renewed on or after January 1, 2014, a healthcare service plan may use only the following characteristics of anindividual, and any dependent thereof, for purposes of establishingthe rate of the individual health benefit plan covering the individualand the eligible dependents thereof, along with the health benefitplan selected by the individual:

(1) Age, pursuant to the age bands established by the UnitedStates Secretary of Health and Human Services pursuant to Section2701(a)(3) of the federal Public Health Service Act (42 U.S.C.Sec. 300gg(a)(3)). Rates based on age shall be determined basedon the individual’s birthday and shall not vary by more than threeto one for adults.

(2) (A) Geographic region. The geographic regions for purposesof rating shall be the following:

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http://www.law.cornell.edu/uscode/text/42/300gg

http://www.cms.gov/CCIIO/Resources/Files/Downloads/market-rules-technical-summary-2-27-2013.pdf

(i) Region 1 shall consist of the Counties of Alpine, Del Norte,Siskiyou, Modoc, Lassen, Shasta, Trinity, Humboldt, Tehama,Plumas, Nevada, Sierra, Mendocino, Lake, Butte, Glenn, Sutter,Yuba, Colusa, Amador, Calaveras, and Tuolumne.

(ii) Region 2 shall consist of the Counties of Napa, Sonoma,Solano, and Marin.

(iii) Region 3 shall consist of the Counties of Sacramento,Placer, El Dorado, and Yolo.

(iv) Region 4 shall consist of the County of San Francisco.(v) Region 5 shall consist of the County of Contra Costa.(vi) Region 6 shall consist of the County of Alameda.(vii) Region 7 shall consist of the County of Santa Clara.(viii) Region 8 shall consist of the County of San Mateo.(ix) Region 9 shall consist of the Counties of Santa Cruz,

Monterey, and San Benito.(x) Region 10 shall consist of the Counties of San Joaquin,

Stanislaus, Merced, Mariposa, and Tulare.(xi) Region 11 shall consist of the Counties of Madera, Fresno,

and Kings.(xii) Region 12 shall consist of the Counties of San Luis Obispo,

Santa Barbara, and Ventura.(xiii) Region 13 shall consist of the Counties of Mono, Inyo,

and Imperial.(xiv) Region 14 shall consist of the County of Kern.(xv) Region 15 shall consist of the ZIP Codes in Los Angeles

County starting with 906 to 912, inclusive, 915, 917, 918, and 935.(xvi) Region 16 shall consist of the ZIP Codes in Los Angeles

County other than those identified in clause (xv).(xvii) Region 17 shall consist of the Counties of San Bernardino

and Riverside.(xviii) Region 18 shall consist of the County of Orange.(xix) Region 19 shall consist of the County of San Diego.(B) No later than June 1, 2017, the department, in collaboration

with the Exchange and the Department of Insurance, shall reviewthe geographic rating regions specified in this paragraph and theimpacts of those regions on the health care coverage market inCalifornia, and make a report to the appropriate policy committeesof the Legislature.

(3) Whether the health benefit plan covers an individual orfamily, as described in PPACA.

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(b) The rate for a health benefit plan subject to this section shallnot vary by any factor not described in this section.

(c) The rating period for rates subject to this section shall befrom January 1 to December 31, inclusive.

(d) This section shall not apply to an individual health benefitplan that is a grandfathered health plan.

(e) This section shall become inoperative if Section 2701 of thefederal Public Health Service Act (42 U.S.C. Sec. 300gg), as addedby Section 1201 of PPACA, is repealed.

1399.857. A health care service plan shall not be required tooffer an individual health benefit plan or accept applications forthe plan pursuant to this article in the case of any of the following:

(a) To an individual who does not work or reside within theplan’s approved service areas.

(b) (1) Within a specific service area or portion of a servicearea, if the plan reasonably anticipates and demonstrates to thesatisfaction of the director that it will not have sufficient healthcare delivery resources to ensure that health care services will beavailable and accessible to the individual because of its obligationsto existing enrollees.

(2) A health care service plan that cannot offer an individualhealth benefit plan to individuals because it is lacking in sufficienthealth care delivery resources within a service area or a portion ofa service area may not offer a health benefit plan in the area inwhich the plan is not offering coverage to individuals to newemployer groups until the plan notifies the director that it has theability to deliver services to individuals, and certifies to the directorthat from the date of the notice it will enroll all individualsrequesting coverage in that area from the plan.

(3) Nothing in this article shall be construed to limit thedirector’s authority to develop and implement a plan ofrehabilitation for a health care service plan whose financial viabilityor organizational and administrative capacity has become impaired.

1399.859. The director may require a health care service planto discontinue the offering of individual health benefit plans oracceptance of applications from any individual upon adetermination by the director that the plan does not have sufficientfinancial viability or organizational and administrative capacityto ensure the delivery of health care services to its enrollees. Indetermining whether the conditions of this section have been met,

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the director shall consider, but not be limited to, the plan’scompliance with the requirements of Section 1367, Article 6(commencing with Section 1375.1), and the rules adopted underthose provisions.

1399.860. (a) On or before October 1, 2013, and annuallythereafter, a health care service plan shall issue the following noticeto all subscribers enrolled in an individual health benefit plan thatis a grandfathered health plan:

New improved health insurance options are available inCalifornia. You currently have health insurance that is exemptfrom many of the new requirements. For instance, your plan maynot include certain consumer protections that apply to other plans,such as the requirement for the provision of preventive healthservices without any cost sharing and the prohibition againstincreasing your rates based on your health status. You have theoption to remain in your current plan or switch to a new plan.Under the new rules, a health plan cannot deny your applicationbased on any health conditions you may have. For moreinformation about your options, please contact the CaliforniaHealth Benefit Exchange, the Office of Patient Advocate, yourplan representative, an insurance broker, or a health care navigator.

(b) A health care service plan shall include the notice describedin subdivision (a) in any renewal material of the individualgrandfathered health plan and in any application for dependentcoverage under the individual grandfathered health plan.

1399.861. Except as otherwise provided in this article, thisarticle shall be implemented to the extent that it meets or exceedsthe requirements set forth in the federal Patient Protection andAffordable Care Act (Public Law 111-148), as amended by thefederal Health Care and Education Reconciliation Act of 2010(Public Law 111-152), and any rules, regulations, or guidanceissued pursuant to that law.

SEC. 7. Section 10965.3 of the Insurance Code, as added bySection 5 of Senate Bill 961 of the 2011–12 Regular Session, isamended to read:

10965.3. (a) (1) On and after October 1, 2013, a health insurershall fairly and affirmatively offer, market, and sell all of theinsurer’s health benefit plans that are sold in the individual market

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Not on States website 2.3.2013


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for policy years on or after January 1, 2014, to all individuals anddependents in each service area in which the insurer provides orarranges for the provision of health care services. An insurer shalllimit enrollment in individual health benefit plans to openenrollment periods and special enrollment periods as provided insubdivisions (c) and (d).

(2) A health insurer that offers qualified health plans throughthe Exchange shall be deemed to be in compliance with paragraph(1) with respect to an individual health benefit plan offered throughthe Exchange in those geographic regions in which the insureroffers health benefit plans through the Exchange.

(3) A health insurer shall allow the policyholder of an individualhealth benefit plan to add a dependent to the policyholder’s healthbenefit plan at the option of the policyholder, consistent with theopen enrollment, annual enrollment, and special enrollment periodrequirements in this section.

(4) A health insurer offering coverage in the individual marketshall not reject the request of a policyholder during an openenrollment period to include a dependent of the policyholder as adependent on an existing individual health benefit plan.

(b) An individual health benefit plan issued, amended, orrenewed shall not impose any preexisting condition provision uponany individual.

(c) A health insurer shall provide an initial open enrollmentperiod from October 1, 2013, to March 31, 2014, inclusive, andannual enrollment periods for plan years on or after January 1,2015, from October 15 to December 7, inclusive, of the precedingcalendar year.

(d) (1) Subject to subdivision (e), commencing January 1, 2014,a health insurer shall allow an individual to enroll in or changeindividual health benefit plans offered outside the Exchange as aresult of the following triggering events:

(A) He or she or his or her dependent loses minimum essentialcoverage. For purposes of this paragraph, both of the followingdefinitions shall apply:

(i) “Minimum essential coverage” has the same meaning as thatterm is defined in subsection (f) of Section 5000A of the InternalRevenue Code (26 U.S.C. Sec. 5000A).

(ii) “Loss of minimum essential coverage” includes loss of thatcoverage due to the circumstances described in Section

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View our Webpage on Special Enrollment and triggering Events

http://www.steveshorr.com/AB_1672_Small_Group_Guaranteed_Issue/PPACA/special.enrollment.periods/special.enrollment.periods.htm

http://www.steveshorr.com/research/PPACA/essential_health_benefits.htm

http://www.law.cornell.edu/uscode/text/26/5000A

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(f) Minimum essential coverage For purposes of this section— (1) In general The term “minimum essential coverage” means any of the following: (A) Government sponsored programs Coverage under— (i) the Medicare program under part A of title XVIII of the Social Security Act, (ii) the Medicaid program under title XIX of the Social Security Act, (iii) the CHIP program under title XXI of the Social Security Act, (iv) medical coverage under chapter 55 of title 10, United States Code, including coverage under the TRICARE program; [2] (v) a health care program under chapter 17 or 18 of title 38, United States Code, as determined by the Secretary of Veterans Affairs, in coordination with the Secretary of Health and Human Services and the Secretary, (vi) a health plan under section 2504 (e) of title 22, United States Code (relating to Peace Corps volunteers); [2] or (vii) the Nonappropriated Fund Health Benefits Program of the Department of Defense, established under section 349 of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103–337; 10 U.S.C. 1587 note). (B) Employer-sponsored plan Coverage under an eligible employer-sponsored plan. (C) Plans in the individual market Coverage under a health plan offered in the individual market within a State. (D) Grandfathered health plan Coverage under a grandfathered health plan. (E) Other coverage Such other health benefits coverage, such as a State health benefits risk pool, as the Secretary of Health and Human Services, in coordination with the Secretary, recognizes for purposes of this subsection. (2) Eligible employer-sponsored plan The term “eligible employer-sponsored plan” means, with respect to any employee, a group health plan or group health insurance coverage offered by an employer to the employee which is— (A) a governmental plan (within the meaning of section 2791(d)(8) of the Public Health Service Act), or (B) any other plan or coverage offered in the small or large group market within a State. Such term shall include a grandfathered health plan described in paragraph (1)(D) offered in a group market. (3) Excepted benefits not treated as minimum essential coverage The term “minimum essential coverage” shall not include health insurance coverage which consists of coverage of excepted benefits— (A) described in paragraph (1) of subsection (c) ofsection 2791 of the Public Health Service Act; or (B) described in paragraph (2), (3), or (4) of such subsection if the benefits are provided under a separate policy, certificate, or contract of insurance. (4) Individuals residing outside United States or residents of territories Any applicable individual shall be treated as having minimum essential coverage for any month— (A) if such month occurs during any period described in subparagraph (A) or (B) of section 911 (d)(1) which is applicable to the individual, or (B) if such individual is a bona fide resident of any possession of the United States (as determined under section 937 (a)) for such month. (5) Insurance-related terms Any term used in this section which is also used in title I of the Patient Protection and Affordable Care Act shall have the same meaning as when used in such title.

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54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code ofFederal Regulations. “Loss of minimum essential coverage” doesnot include loss of that coverage due to the individual’s failure topay premiums on a timely basis or situations allowing for arescission, subject to Section 10384.17.

(B) He or she gains a dependent or becomes a dependent.(C) He or she is mandated to be covered pursuant to a valid

state or federal court order.(D) He or she has been released from incarceration.(E) His or her health benefit plan substantially violated a

material provision of the policy.(F) He or she gains access to new health benefit plans as a result

of a permanent move.(G) He or she was receiving services from a contracting provider

under another health benefit plan, as defined in Section 10965 orSection 1399.845 of the Health and Safety Code, for one of theconditions described in subdivision (a) of Section 10133.56 andthat provider is no longer participating in the health benefit plan.

(2) Subject to subdivision (e), commencing January 1, 2014, ahealth insurer shall allow an individual to enroll in or changeindividual health benefit plans offered through the Exchange as aresult of the triggering events listed in Section 155.420(d) of Title45 of the Code of Federal Regulations. To the extent permitted byfederal law, any triggering event described in paragraph (1) thatis not listed in Section 155.420(d)(1) to (8), inclusive, of Title 45of the Code of Federal Regulations shall be considered anexceptional circumstance under Section 155.420(d)(9) of Title 45of the Code of Federal Regulations.

(e) With respect to individual health benefit plans offered outsidethe Exchange, an individual shall have 60 days from the date of atriggering event identified in subdivision (d) to apply for coveragefrom a health benefit plan subject to this section. With respect toindividual health benefit plans offered through the Exchange, anindividual shall have 60 days from the date of a triggering eventidentified in subdivision (d) to select a plan offered through theExchange.

(f) With respect to individual health benefit plans offered outsidethe Exchange, after an individual submits a completed applicationform for a plan, the insurer shall, within 30 days, notify theindividual of the individual’s actual premium charges for that plan

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http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=d8f1d3ca15115ac009ed8010ae338fb2&rgn=div8&view=text&node=26:17.0.1.1.5.0.1.65&idno=26

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10133.56. (a) A health insurer that enters into a contract with a professional or institutional provider to provide services at alternative rates of payment pursuant to Section 10133 shall, at the request of an insured, arrange for the completion of covered services by a terminated provider, if the insured is undergoing a course of treatment for any of the following conditions: (1) An acute condition. An acute condition is a medical condition that involves a sudden onset of symptoms due to an illness, injury, or other medical problem that requires prompt medical attention and that has a limited duration. Completion of covered services shall be provided for the duration of the acute condition. (2) A serious chronic condition. A serious chronic condition is a medical condition due to a disease, illness, or other medical problem or medical disorder that is serious in nature and that persists without full cure or worsens over an extended period of time or requires ongoing treatment to maintain remission or prevent deterioration. Completion of covered services shall be provided for a period of time necessary to complete a course of treatment and to arrange for a safe transfer to another provider, as determined by the health insurer in consultation with the insured and the terminated provider and consistent with good professional practice. Completion of covered services under this paragraph shall not exceed 12 months from the contract termination date. (3) A pregnancy. A pregnancy is the three trimesters of pregnancy and the immediate postpartum period. Completion of covered services shall be provided for the duration of the pregnancy. (4) A terminal illness. A terminal illness is an incurable or irreversible condition that has a high probability of causing death within one year or less. Completion of covered services shall be provided for the duration of a terminal illness, which may exceed 12 months from the contract termination date. (5) The care of a newborn child between birth and age 36 months. Completion of covered services under this paragraph shall not exceed 12 months from the contract termination date. (6) Performance of a surgery or other procedure that has been recommended and documented by the provider to occur within 180 days of the contract's termination date. (b) The insurer may require the terminated provider whose services are continued beyond the contract termination date pursuant to this section, to agree in writing to be subject to the same contractual terms and conditions that were imposed upon the provider prior to termination, including, but not limited to, credentialing, hospital privileging, utilization review, peer review, and quality assurance requirements. If the terminated provider does not agree to comply or does not comply with these contractual terms and conditions, the insurer is not required to continue the provider's services beyond the contract termination date. (c) Unless otherwise agreed upon between the terminated provider and the insurer or between the terminated provider and the provider group, the agreement shall be construed to require a rate and method of payment to the terminated provider, for the services rendered pursuant to this section, that are the same as the rate and method of payment for the same services while under contract with the insurer and at the time of termination. The provider shall accept the reimbursement as payment in full and shall not bill the insured for any amount in excess of the reimbursement rate, with the exception of copayments and deductibles pursuant to subdivision (e). (d) Notice as to the process by which an insured may request completion of covered services pursuant to this section shall be provided in any insurer evidence of coverage and disclosure form issued after March 31, 2004. An insurer shall provide a written copy of this information to its contracting providers and provider groups. An insurer shall also provide a copy to its insureds upon request. (e) The payment of copayments, deductibles, or other cost-sharing components by the insured during the period of completion of covered services with a terminated provider shall be the same copayments, deductibles, or other cost-sharing components that would be paid by the insured when receiving care from a provider currently contracting with the insurer. (f) If an insurer delegates the responsibility of complying with this section to its contracting entities, the insurer shall ensure that the requirements of this section are met. (g) For the purposes of this section, the following terms have the following meanings: (1) "Provider" means a person who is a licentiate as defined in Section 805 of the Business and Professions Code or a person licensed under Chapter 2 (commencing with Section 1000) of Division 2 of the Business and Professions Code. (2) "Terminated provider" means a provider whose contract to provide services to insureds is ter

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ins&group=10001-11000&file=10129-10133.9

http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=845698eabd928399961d090fc4ab9d77&rgn=div5&view=text&node=45:1.0.1.2.71&idno=45#45:1.0.1.2.71.5.27.4

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§ 155.420 Special enrollment periods. (a) General requirements. The Exchange must provide special enrollment periods consistent with this section, during which qualified individuals may enroll in QHPs and enrollees may change QHPs. (b) Effective dates. (1) Regular effective dates. Except as specified in paragraphs (b)(2) and (3) of this section, for a QHP selection received by the Exchange from a qualified individual— (i) Between the first and the fifteenth day of any month, the Exchange must ensure a coverage effective date of the first day of the following month; and (ii) Between the sixteenth and the last day of any month, the Exchange must ensure a coverage effective date of the first day of the second following month. (2) Special effective dates. (i) In the case of birth, adoption or placement for adoption, the Exchange must ensure that coverage is effective on the date of birth, adoption, or placement for adoption, but advance payments of the premium tax credit and cost-sharing reductions, if applicable, are not effective until the first day of the following month, unless the birth, adoption, or placement for adoption occurs on the first day of the month; and (ii) In the case of marriage, or in the case where a qualified individual loses minimum essential coverage, as described in paragraph (d)(1) of this section, the Exchange must ensure coverage is effective on the first day of the following month. (3) Option for earlier effective dates. Subject to the Exchange demonstrating to HHS that all of its participating QHP issuers agree to effectuate coverage in a timeframe shorter than discussed in paragraph (b)(1) or (b)(2)(ii) of this section, the Exchange may do one or both of the following for all applicable individuals: (i) For a QHP selection received by the Exchange from a qualified individual in accordance with the dates specified in paragraph (b)(1) or (b)(2)(ii) of this section, the Exchange may provide a coverage effective date for a qualified individual earlier than specified in such paragraphs, provided that either— (A) The qualified individual has not been determined eligible for advance payments of the premium tax credit or cost-sharing reductions; or (B) The qualified individual pays the entire premium for the first partial month of coverage as well as all cost sharing, thereby waiving the benefit of advance payments of the premium tax credit and cost-sharing reduction payments until the first of the next month. (ii) For a QHP selection received by the Exchange from a qualified individual on a date set by the Exchange after the fifteenth of the month, the Exchange may provide a coverage effective date of the first of the following month. (c) Length of special enrollment periods. Unless specifically stated otherwise herein, a qualified individual or enrollee has 60 days from the date of a triggering event to select a QHP. (d) Special enrollment periods. The Exchange must allow qualified individuals and enrollees to enroll in or change from one QHP to another as a result of the following triggering events: (1) A qualified individual or dependent loses minimum essential coverage; (2) A qualified individual gains a dependent or becomes a dependent through marriage, birth, adoption or placement for adoption; (3) An individual, who was not previously a citizen, national, or lawfully present individual gains such status; (4) A qualified individual's enrollment or non-enrollment in a QHP is unintentional, inadvertent, or erroneous and is the result of the error, misrepresentation, or inaction of an officer, employee, or agent of the Exchange or HHS, or its instrumentalities as evaluated and determined by the Exchange. In such cases, the Exchange may take such action as may be necessary to correct or eliminate the effects of such error, misrepresentation, or inaction; (5) An enrollee adequately demonstrates to the Exchange that the QHP in which he or she is enrolled substantially violated a material provision of its contract in relation to the enrollee; (6) An individual is determined newly eligible or newly ineligible for advance payments of the premium tax credit or has a change in eligibility for cost-sharing reductions, regardless of whether such individual is already enrolled in a QHP. The Exchange must permit individuals whose existing coverage through an eligible employer-sponsored plan will no longer be affordable or provide minimum value for his or her employer's upcoming plan year to access this special enrollment period prior to the end of his or her coverage through such eligible employer-sponsored plan; (7) A qualified individual or enrollee gains access to new QHPs as a result of a permanent move; (8) An Indian, as defined by section 4 of the Indian Health Care Improvement Act, may enroll in a QHP or change from one QHP to another one time per month; and (9) A qualified individual or enrollee demonstrates to the Exchange, in accordance with guidelines issued by

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established in accordance with Section 10965.9. The individualshall have 30 days in which to exercise the right to buy coverageat the quoted premium charges.

(g) (1) With respect to an individual health benefit plan offeredoutside the Exchange for which an individual applies during theinitial open enrollment period described in subdivision (c), whenthe individual submits a premium payment, based on the quotedpremium charges, and that payment is delivered or postmarked,whichever occurs earlier, by December 15, 2013, coverage underthe individual health benefit plan shall become effective no laterthan January 1, 2014. When that payment is delivered orpostmarked within the first 15 days of any subsequent month,coverage shall become effective no later than the first day of thefollowing month. When that payment is delivered or postmarkedbetween December 16, 2013, and December 31, 2013, inclusive,or after the 15th day of any subsequent month, coverage shallbecome effective no later than the first day of the second monthfollowing delivery or postmark of the payment.

(2) With respect to an individual health benefit plan offeredoutside the Exchange for which an individual applies during theannual open enrollment period described in subdivision (c), whenthe individual submits a premium payment, based on the quotedpremium charges, and that payment is delivered or postmarked,whichever occurs later, by December 15, coverage shall becomeeffective as of the following January 1. When that payment isdelivered or postmarked within the first 15 days of any subsequentmonth, coverage shall become effective no later than the first dayof the following month. When that payment is delivered orpostmarked between December 16 and December 31, inclusive,or after the 15th day of any subsequent month, coverage shallbecome effective no later than the first day of the second monthfollowing delivery or postmark of the payment.

(3) With respect to an individual health benefit plan offeredoutside the Exchange for which an individual applies during aspecial enrollment period described in subdivision (d), thefollowing provisions shall apply:

(A) When the individual submits a premium payment, basedon the quoted premium charges, and that payment is delivered orpostmarked, whichever occurs earlier, within the first 15 days of

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the month, coverage under the plan shall become effective no laterthan the first day of the following month.

(B) When the premium payment is neither delivered norpostmarked until after the 15th day of the month, coverage shallbecome effective no later than the first day of the second monthfollowing delivery or postmark of the payment.

(C) Notwithstanding subparagraph (A) or (B), in the case of abirth, adoption, or placement for adoption, the coverage shall beeffective on the date of birth, adoption, or placement for adoption.

(D) Notwithstanding subparagraph (A) or (B), in the case ofmarriage or becoming a registered domestic partner or in the casewhere a qualified individual loses minimum essential coverage,the coverage effective date shall be the first day of the followingmonth.

(4) With respect to individual health benefit plans offeredthrough the Exchange, the effective date of coverage selectedpursuant to this section shall be the same as the applicable datespecified in Section 155.410 or 155.420 of Title 45 of the Codeof Federal Regulations.

(h) (1) On or after January 1, 2014, a health insurer shall notestablish rules for eligibility, including continued eligibility, ofany individual to enroll under the terms of an individual healthbenefit plan based on any of the following factors:

(A) Health status.(B) Medical condition, including physical and mental illnesses.(C) Claims experience.(D) Receipt of health care.(E) Medical history.(F) Genetic information.(G) Evidence of insurability, including conditions arising out

of acts of domestic violence.(H) Disability.(I) Any other health status-related factor as determined by any

federal regulations, rules, or guidance issued pursuant to Section2705 of the federal Public Health Service Act.

(2) Notwithstanding subdivision (c) of Section 10291.5, a healthinsurer shall not require an individual applicant or his or herdependent to fill out a health assessment or medical questionnaireprior to enrollment under an individual health benefit plan. A healthinsurer shall not acquire or request information that relates to a

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health status-related factor from the applicant or his or herdependent or any other source prior to enrollment of the individual.

(i) This section shall not apply to an individual health benefitplan that is a grandfathered health plan.

(j) The following provisions of this section shall becomeinoperative if Section 2702 of the federal Public Health ServiceAct (42 U.S.C. Sec. 300gg-1), as added by Section 1201 ofPPACA, is repealed:

(1) Subdivision (a).(2) Subdivisions (c), (d), (e), and (g), except as they relate to

health benefit plans offered through the Exchange.SEC. 8. No reimbursement is required by this act pursuant to

Section 6 of Article XIIIB of the California Constitution becausethe only costs that may be incurred by a local agency or schooldistrict will be incurred because this act creates a new crime orinfraction, eliminates a crime or infraction, or changes the penaltyfor a crime or infraction, within the meaning of Section 17556 ofthe Government Code, or changes the definition of a crime withinthe meaning of Section 6 of Article XIII B of the CaliforniaConstitution.

SEC. 9. This act shall become operative only if Senate Bill961 of the 2011–12 Regular Session is enacted and takes effect.

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Approved , 2012

Governor




Documents

Assembly Bill No. 1461 - steveshorr.com