Health and Safety Code — Part 34 | HSC — United States — California law | Esheria

Health and Safety Code

Part 34 of 87 · provisions 6,601–6,800

This section says the act is to be known as the Health and Safety Code.

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About this statute

The Legislature states findings supporting a unified, single-payer-style health care financing system for all Californians. The State Department of Health Services is renamed the State Department of Health Care Services, and its retained functions continue with the renamed department. The Director of Health Care Services is appointed by the Governor with Senate confirmation, the director receives a salary set by law, and the Governor may appoint up to two chief deputies on the director’s recommendation. The director has the powers of a department head under the cited Government Code chapter. The Department of Health Services has a Division of Rural Health, and that division must administer specified chapters and sections.

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Provisions of Health and Safety Code

Showing 200 of 17,333

  1. 1342.74.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    Health care service plans must not require prior authorization or step therapy for medically necessary antiretroviral drugs for AIDS/HIV prevention, must not block pharmacies from dispensing PrEP or PEP, and must cover and reimburse pharmacist-furnished PrEP/PEP in specified cases.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1342.74. (a) (1) Notwithstanding Section 1342.71, a health care service plan shall not subject antiretroviral drugs that are medically necessary for the prevention of AIDS/HIV, including preexposure prophylaxis or postexposure prophylaxis, to prior authorization or step therapy, except as provided in paragraph (2). (2) If the United States Food and Drug Administration has approved one or more therapeutic equivalents of a drug, device, or product for the prevention of AIDS/HIV, this section does not require a health care service plan to cover all of the therapeutically equivalent versions without prior authorization or step therapy, if at least one therapeutically equivalent version is covered without prior authorization or step therapy. (b) Notwithstanding any other law, a health care service plan shall not prohibit, or permit a delegated pharmacy benefit manager to prohibit, a pharmacy provider from dispensing preexposure prophylaxis or postexposure prophylaxis. (c) A health care service plan shall cover preexposure prophylaxis and postexposure prophylaxis that has been furnished by a pharmacist, as authorized in Sections 4052.02 and 4052.03 of the Business and Professions Code, including the pharmacist’s services and related testing ordered by the pharmacist. A health care service plan shall pay or reimburse, consistent with the requirements of this chapter, for the service performed by a pharmacist at an in-network pharmacy or a pharmacist at an out-of-network pharmacy if the health care service plan has an out-of-network pharmacy benefit. (d) This section does not require a health care service plan to cover preexposure prophylaxis or postexposure prophylaxis by a pharmacist at an out-of-network pharmacy, unless the health care service plan has an out-of-network pharmacy benefit. (e) This section shall not apply to Medi-Cal managed care plans contracting with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14590) of Part 3 of Division 9 of the Welfare and Institutions Code, to the extent that the services described in this section are excluded from coverage under the contract between the Medi-Cal managed care plans and the State Department of Health Care Services. (Amended by Stats. 2024, Ch. 1, Sec. 2. (SB 339) Effective February 6, 2024.)
  2. 1342.75.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    Health care service plans with outpatient prescription drug benefits must cover at least one FDA-approved medication in each listed category, and the coverage must be available without prior authorization, step therapy, or utilization review.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1342.75. (a) Notwithstanding any other law, a group or individual health care service plan offering an outpatient prescription drug benefit shall provide coverage for at least one medication approved by the United States Food and Drug Administration in each of the following categories without prior authorization, step therapy, or utilization review: (1) Medication for the reversal of opioid overdose, including a naloxone product or another opioid antagonist. (2) Medication for the detoxification or maintenance treatment of a substance use disorder, including a daily oral buprenorphine product. (3) A long-acting buprenorphine product. (4) A long-acting injectable naltrexone product. (b) This section does not prohibit a health care service plan from selecting an AB-rated generic equivalent, biosimilar, as defined in Section 262(i)(2) of Title 42 of the United States Code, or interchangeable biological product, as defined in Section 262(i)(3) of Title 42 of the United States Code, to meet the requirements of subdivision (a). (Added by Stats. 2024, Ch. 633, Sec. 1. (AB 1842) Effective January 1, 2025.)
  3. 1342.8.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    The State Department of Health Services and the department must coordinate certain physician office audits or surveys when feasible.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1342.8. The State Department of Health Services and the department shall coordinate, to the extent feasible, audits or surveys of physician offices required by this chapter and by the managed care program under the Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code) and for any physician office auditing required by this chapter. (Added by Stats. 1998, Ch. 647, Sec. 2. Effective January 1, 1999.)
  4. 1343.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    This section says the chapter applies to health care service plans and specialized health care service plan contracts, and gives the director power to exempt certain persons, plans, and pilot programs.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1343. (a) This chapter shall apply to health care service plans and specialized health care service plan contracts as defined in subdivisions (f) and (o) of Section 1345. (b) The director may by the adoption of rules or the issuance of orders deemed necessary and appropriate, either unconditionally or upon specified terms and conditions or for specified periods, exempt from this chapter any class of persons or plan contracts if the director finds the action to be in the public interest and not detrimental to the protection of subscribers, enrollees, or persons regulated under this chapter, and that the regulation of the persons or plan contracts is not essential to the purposes of this chapter. (c) The director, upon request of the Director of Health Care Services, shall exempt from this chapter any county-operated pilot program contracting with the State Department of Health Care Services pursuant to Article 7 (commencing with Section 14490) of Chapter 8 of Part 3 of Division 9 of the Welfare and Institutions Code. The director may exempt noncounty-operated pilot programs upon request of the Director of Health Care Services. Those exemptions may be subject to conditions the Director of Health Care Services deems appropriate. (d) Upon the request of the Director of Health Care Services, the director may exempt from this chapter any mental health plan contractor or any capitated rate contract under Chapter 8.9 (commencing with Section 14700) of Part 3 of Division 9 of the Welfare and Institutions Code. Those exemptions may be subject to conditions the Director of Health Care Services deems appropriate. (e) This chapter shall not apply to: (1) A person organized and operating pursuant to a certificate issued by the Insurance Commissioner unless the entity is directly providing the health care service through those entity-owned or contracting health facilities and providers, in which case this chapter shall apply to the insurer’s plan and to the insurer. (2) A plan directly operated by a bona fide public or private institution of higher learning that directly provides health care services only to its students, faculty, staff, administration, and their respective dependents, except that a plan described in this paragraph shall be subject to Section 1367.33. (3) A person who does all of the following: (A) Promises to provide care for life or for more than one year in return for a transfer of consideration from, or on behalf of, a person 60 years of age or older. (B) Has obtained a written license pursuant to Chapter 2 (commencing with Section 1250) or Chapter 3.2 (commencing with Section 1569). (C) Has obtained a certificate of authority from the State Department of Social Services. (4) The Major Risk Medical Insurance Board when engaging in activities under Chapter 8 (commencing with Section 10700) of Part 2 of Division 2 of the Insurance Code, Part 6.3 (commencing with Section 12695) of Division 2 of the Insurance Code, and Part 6.5 (commencing with Section 12700) of Division 2 of the Insurance Code. (5) The California Small Group Reinsurance Fund. (Amended by Stats. 2022, Ch. 630, Sec. 12. (SB 523) Effective January 1, 2023.)
  5. 1343.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    This chapter does not apply to programs developed under the authority of specified Welfare and Institutions Code provisions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1343.1. This chapter shall not apply to any program developed under the authority of Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code. (Amended by Stats. 2011, Ch. 367, Sec. 2. (AB 574) Effective January 1, 2012.)
  6. 1343.3.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    The director may authorize one pilot program in southern California if the stated conditions are met, and participating providers and the beneficiary association must follow approval, reporting, complaint-handling, and reimbursement rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1343.3. (a) The director, no later than May 1, 2021, may authorize one pilot program in southern California whereby providers approved by the department may undertake risk-bearing arrangements with a voluntary employees’ beneficiary association, as defined in Section 501(c)(9) of Title 26 of the United States Code or in Section 1349.2, notwithstanding paragraph (3) of subdivision (a) of Section 1349.2, with enrollment of greater than 100,000 lives, beginning no earlier than January 1, 2022, to December 31, 2027, inclusive, if all of the following criteria are met: (1) The purpose of the pilot program is to demonstrate the control of costs for health care services and the improvement of health outcomes and quality of service when compared against a sole fee-for-service provider reimbursement model. (2) The voluntary employees’ beneficiary association has entered into a contract with one or more health care providers under which each provider agrees to accept risk-based or global risk payment from the voluntary employees’ beneficiary association. (3) Each risk-bearing provider is registered as a risk-bearing organization pursuant to Section 1375.4 and applicable department regulations if the provider accepts professional capitation and is delegated the responsibility for the processing and payment of claims. (4) Each global risk-bearing provider holds or will obtain in conjunction with the pilot program application a limited or restricted license pursuant to Section 1349 or 1351, or Section 1300.49 of Title 28 of the California Code of Regulations. (5) Each risk-bearing provider continues to comply with applicable financial solvency standards and audit requirements under this chapter, including, but not limited to, financial reporting on a quarterly basis, during the term of the pilot program. (6) The voluntary employees’ beneficiary association shall be responsible for providing all of the following: (A) Basic health care services. (B) Prescription drug benefits. (C) Continuity of care. (D) Standards for network adequacy and timely access to care, including, but not limited to, access to specialty care. (E) Language assistance programs. (F) A process for filing and resolving consumer grievances and appeals, including, but not limited to, independent medical review. (G) Prohibitions against deceptive marketing. (H) Member documents that include a description of the benefit coverage, any applicable copays, how to access services, and how to submit a grievance. (I) Mechanisms for resolving provider disputes, including an appeals process. (7) The contract between the voluntary employees’ beneficiary association and each health care provider shall include all of the following: (A) Provisions dividing financial responsibility between the parties and defining which party is financially responsible for services rendered, including arrangements for member care should a global or risk-bearing provider become insolvent. (B) A delegation agreement. (C) Requirements regarding utilization review or utilization management. (D) Provisions stating the risk-based organization, limited licensee, or restricted licensee, as applicable, has the organizational and administrative capacity to provide services to covered employees, and that medical decisions are rendered by qualified medical providers, unhindered by fiscal and administrative management, including the disclosure of the percentage of risk assumed in relation to its total risk-based business. (E) Requirements regarding the submission of claims by providers and the timely processing of provider claims, including a guarantee that the voluntary employees’ beneficiary association will indemnify any outstanding unpaid provider claim in the event of the insolvency of a participating provider to the pilot program. (F) Require the health care provider to comply with the voluntary employees’ beneficiary association’s requirements for all of the following: (i) Continuity of care. (ii) Language assistance. (iii) Consumer grievances and appeals, including, but not limited to, independent medical review. (8) The term of each contract between the voluntary employees’ beneficiary association and a health care provider does not exceed the period of the pilot program. (9) To participate in the pilot program, each voluntary employees’ beneficiary association shall submit to the department an application consistent with paragraph (2) of subdivision (h). (10) Each health care provider that has entered into a contract with the voluntary employees’ beneficiary association is a party to the pilot program application submitted to the department. The application shall include a copy of each contract between the voluntary employees’ beneficiary association and a participating health care provider. (11) (A) The voluntary employees’ beneficiary association and each health care provider participating in the pilot program agree to collect and report to the department, in each year of the pilot program, in a manner and frequency determined by the department, information regarding the comparative cost savings when compared to fee-for-service payment, performance measurements for clinical patient outcomes, and enrollee satisfaction. The department may require additional information be reported. Any additional reporting requirements shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (B) The department may authorize a public or private agency to receive the information specified in this paragraph and monitor the pilot program under the data standard currently used by the Integrated Healthcare Association’s “Align. Measure. Perform.” (AMP) program and the California Regional Health Care Cost & Quality Atlas. (b) This section does not exempt a health care provider that contracts with a voluntary employees’ beneficiary association as part of a pilot program authorized by subdivision (a) from the financial solvency requirements of Section 1375.4 and related department regulations, Section 1349 or 1351, or Section 1300.49 of Title 28 of the California Code of Regulations, as applicable, or any other provision of this chapter required by the department as part of the pilot program. (c) Notwithstanding paragraph (3) of subdivision (a), this section does not exempt a voluntary employees’ beneficiary association participating in a program authorized by subdivision (a) of Section 1349.2 from the requirement to reimburse providers on a fee-for-service basis. (d) The participating voluntary employees’ beneficiary association shall appoint an ombudsperson to monitor and respond to any complaint lodged by a participating enrollee in the pilot program. If the enrollee is not satisfied with the result, the ombudsperson shall refer the enrollee to the department’s grievance and appeal process as established pursuant to Section 1368. Determinations made by the department pursuant to the grievance and appeal process shall be binding upon the voluntary employees’ beneficiary association. (e) The participating voluntary employees’ beneficiary association shall report on a quarterly basis to the department any complaint lodged by a participating enrollee in the pilot program, along with a description of the response and resolution. (f) The global and risk-bearing providers participating in a pilot program authorized by subdivision (a) shall be approved by the department. The department shall retain the right to disapprove any pilot program application for any reason consistent with this chapter, including, but not limited to, failure to demonstrate to the department’s satisfaction adequate enrollee protection and compliance with all criteria and requirements in this section. (g) The department, after the termination of the pilot program, and before January 1, 2029, shall submit a report to the Legislature regarding the costs and clinical patient outcomes of the pilot program compared to fee-for-service payment models, including data on enrollee satisfaction, consumer and provider grievances, appeals, and independent medical reviews. The department may authorize a public or private agency in subparagraph (B) of paragraph (11) of subdivision (a) to prepare the report on behalf of the department. This report shall be submitted in compliance with Section 9795 of the Government Code. (h) The pilot program participants shall reimburse the department for reasonable regulatory costs of up to five hundred thousand dollars ($500,000) for all of the following: (1) Commissioning the report described in subdivision (g). (2) Developing an application process for the pilot program described in this section. (3) Monitoring compliance with this section. (i) This section shall remain in effect only until January 1, 2030, and as of that date is repealed. (Amended by Stats. 2025, Ch. 67, Sec. 115. (AB 1170) Effective January 1, 2026. Repealed as of January 1, 2030, by its own provisions.)
  7. 1343.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    If someone claims an exemption or exception from a definition in a proceeding under this chapter, that person must prove it.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1343.5. In any proceeding under this chapter, the burden of proving an exemption or an exception from a definition is upon the person claiming it. (Added by Stats. 1978, Ch. 778.)
  8. 1344.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    The director may issue, change, waive, and interpret rules and notices for this chapter, and may regulate Medicare-supplement coverage.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1344. (a) The director may from time to time adopt, amend, and rescind any rules, forms, and orders that are necessary to carry out the provisions of this chapter, including rules governing applications and reports, and defining any terms, whether or not used in this chapter, insofar as the definitions are not inconsistent with the provisions of this chapter. For the purpose of rules and forms, the director may classify persons and matters within the director’s jurisdiction, and may prescribe different requirements for different classes. The director may waive any requirement of any rule or form in situations where in the director’s discretion that requirement is not necessary in the public interest or for the protection of the public, subscribers, enrollees, or persons or plans subject to this chapter. The director may adopt rules consistent with federal regulations and statutes to regulate health care coverage supplementing Medicare. (b) The director may, by regulation, modify the wording of any notice required by this chapter for purposes of clarity, readability, and accuracy, except that a modification shall not change the substantive meaning of the notice. (c) The director may honor requests from interested parties for interpretive opinions. (d) No provision of this chapter imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, order, or written interpretive opinion of the director, or any opinion of the Attorney General, notwithstanding that the rule, form, order, or written interpretive opinion may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason. (Amended by Stats. 2009, Ch. 298, Sec. 3. (AB 1540) Effective January 1, 2010.)
  9. 1345.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    This section defines terms used in this chapter on health care service plans.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1345. As used in this chapter: (a) “Advertisement” means any written or printed communication or any communication by means of recorded telephone messages or by radio, television, or similar communications media, published in connection with the offer or sale of plan contracts. (b) “Basic health care services” means all of the following: (1) Physician services, including consultation and referral. (2) Hospital inpatient services and ambulatory care services. (3) Diagnostic laboratory and diagnostic and therapeutic radiologic services. (4) Home health services. (5) Preventive health services. (6) Emergency health care services, including ambulance and ambulance transport services and out-of-area coverage. “Basic health care services” includes ambulance and ambulance transport services provided through the “911” emergency response system. (7) Hospice care pursuant to Section 1368.2. (c) “Enrollee” means a person who is enrolled in a plan and who is a recipient of services from the plan. (d) “Evidence of coverage” means any certificate, agreement, contract, brochure, or letter of entitlement issued to a subscriber or enrollee setting forth the coverage to which the subscriber or enrollee is entitled. (e) “Group contract” means a contract that by its terms limits the eligibility of subscribers and enrollees to a specified group. Reference to a “group” does not include a Medi-Cal managed care contract between a health care service plan and the State Department of Health Care Services to provide benefits to beneficiaries of the Medi-Cal program. (f) “Health care service plan” or “specialized health care service plan” means either of the following: (1) Any person who undertakes to arrange for the provision of health care services to subscribers or enrollees, or to pay for or to reimburse any part of the cost for those services, in return for a prepaid or periodic charge paid by or on behalf of the subscribers or enrollees. (2) Any person, whether located within or outside of this state, who solicits or contracts with a subscriber or enrollee in this state to pay for or reimburse any part of the cost of, or who undertakes to arrange or arranges for, the provision of health care services that are to be provided wholly or in part in a foreign country in return for a prepaid or periodic charge paid by or on behalf of the subscriber or enrollee. (g) “License” means, and “licensed” refers to, a license as a plan pursuant to Section 1353. (h) “Out-of-area coverage,” for purposes of paragraph (6) of subdivision (b), means coverage while an enrollee is anywhere outside the service area of the plan, and shall also include coverage for urgently needed services to prevent serious deterioration of an enrollee’s health resulting from unforeseen illness or injury for which treatment cannot be delayed until the enrollee returns to the plan’s service area. (i) “Provider” means any professional person, organization, health facility, or other person or institution licensed by the state to deliver or furnish health care services. (j) “Person” means any person, individual, firm, association, organization, partnership, business trust, foundation, labor organization, corporation, limited liability company, public agency, or political subdivision of the state. (k) “Service area” means a geographical area designated by the plan within which a plan shall provide health care services. (l) “Solicitation” means any presentation or advertising conducted by, or on behalf of, a plan, where information regarding the plan, or services offered and charges therefor, is disseminated for the purpose of inducing persons to subscribe to, or enroll in, the plan. (m) “Solicitor” means any person who engages in the acts defined in subdivision (l). (n) “Solicitor firm” means any person, other than a plan, who through one or more solicitors engages in the acts defined in subdivision (l). (o) “Specialized health care service plan contract” means a contract for health care services in a single specialized area of health care, including dental care, for subscribers or enrollees, or which pays for or which reimburses any part of the cost for those services, in return for a prepaid or periodic charge paid by or on behalf of the subscribers or enrollees. (p) “Subscriber” means the person who is responsible for payment to a plan or whose employment or other status, except for family dependency, is the basis for eligibility for membership in the plan. (q) Unless the context indicates otherwise, “plan” refers to health care service plans and specialized health care service plans. (r) “Plan contract” means a contract between a plan and its subscribers or enrollees or a person contracting on their behalf pursuant to which health care services, including basic health care services, are furnished; and unless the context otherwise indicates it includes specialized health care service plan contracts; and unless the context otherwise indicates it includes group contracts. (s) All references in this chapter to financial statements, assets, liabilities, and other accounting items mean those financial statements and accounting items prepared or determined in accordance with generally accepted accounting principles, and fairly presenting the matters they purport to present, subject to any specific requirement imposed by this chapter or by the director. (Amended by Stats. 2024, Ch. 492, Sec. 2. (SB 1511) Effective January 1, 2025.)
  10. 1345.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. )

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    This section defines “minimum essential coverage” and lists what counts and what does not count, and it lets the department or the State Department of Health Care Services issue guidance to apply the section.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 1. General [1340 - 1345.5] ( Article 1 added by Stats. 1975, Ch. 941. ) ## 1345.5. (a) “Minimum essential coverage” means any of the following: (1) Coverage under any of the following government-sponsored programs: (A) The Medicare program under Part A or Part C of Title XVIII of the federal Social Security Act. (B) Full scope coverage under the Medi-Cal program, including the Medi-Cal Access Program and Medi-Cal for Pregnant Women, and other full scope health coverage programs administered and determined to be minimum essential coverage by the State Department of Health Care Services. (C) The Medicaid program under Title XIX of the federal Social Security Act. (D) The CHIP program under Title XXI of the federal Social Security Act or under a qualified CHIP look-alike program, as defined in Section 2107(g) of the federal Social Security Act. (E) Medical coverage under Chapter 55 of Title 10 of the United States Code, including coverage under the TRICARE program. (F) A health care program under Chapter 17 or Chapter 18 of Title 38 of the United States Code. (G) A health plan under Section 2504(e) of Title 22 of the United States Code, relating to Peace Corps volunteers. (H) 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. (I) Refugee Medical Assistance, supported by the Administration for Children and Families, which is authorized under Section 412(e)(7)(A) of The Immigration and Nationality Act. (J) A successor program to one of the above programs, as determined by the department or, pursuant to subparagraph (B), by the State Department of Health Care Services. (2) The University of California Student Health Insurance Plan and the University of California Voluntary Dependent Plan. (3) Coverage under an eligible employer-sponsored plan, including grandfathered plans and policies. “Eligible employer-sponsored plan” means a group health plan offered in connection with employment to an employee or related individuals, including a governmental plan within the meaning of Section 2791(d)(8) of the federal Public Health Service Act (42 U.S.C. Sec. 201 et seq.) or any other plan, group health care service plan contract, or group health insurance policy offered in the small or large group market within the state. (4) Coverage under an individual health care service plan contract or individual health insurance policy, including grandfathered contracts and policies, or student health coverage that substantially meets all the requirements of Title I of the Affordable Care Act pertaining to nongrandfathered, individual health insurance coverage. (5) Any other health benefits coverage similar in form and substance to the benefits described in this subdivision that is determined by the department to constitute minimum essential coverage pursuant to this section. (b) “Minimum essential coverage” does not include health coverage as follows: (1) Coverage of the following excepted benefits: (A) Coverage only for accident or disability income insurance, or a combination of the two. (B) Coverage issued as a supplement to liability insurance. (C) Liability insurance, including general liability insurance and automobile liability insurance. (D) Workers’ compensation or similar insurance. (E) Automobile medical payment insurance. (F) Credit-only insurance. (G) Coverage for onsite medical clinics. (H) Other similar health coverage, under which benefits for medical care are secondary or incidental to other health benefits. (2) Coverage of the following excepted benefits, if offered separately: (A) Limited scope dental or vision benefits, or benefits limited to any other single specialized area of health care. (B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof. (C) Other similar, limited benefits. (3) Coverage of the following excepted benefits if offered as independent, noncoordinated benefits. (A) Coverage only for a specified disease or illness. (B) Hospital indemnity or other fixed indemnity insurance. (4) Coverage of the following excepted benefits if offered as a separate contract for health care coverage: (A) Medicare supplemental health insurance, as defined under Section 1395ss(g)(1) of Title 42 of the United States Code. (B) Coverage supplemental to the coverage provided under Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code. (c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, or the State Department of Health Care Services, may implement, interpret, or make specific this section by means of guidance or instructions, without taking regulatory action. (Added by Stats. 2019, Ch. 38, Sec. 14. (SB 78) Effective June 27, 2019.)
  11. 1346.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    The director must administer and enforce this chapter and has broad powers to investigate, audit, hold hearings, subpoena witnesses, and make rules or orders.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1346. (a) The director shall administer and enforce this chapter and shall have the following powers: (1) Recommend and propose the enactment of any legislation necessary to protect and promote the interests of the public, subscribers, enrollees, and providers of health care services in health care service plans in the State of California. (2) Provide information to federal and state legislative committees and executive agencies concerning plans. (3) Assist, advise, and cooperate with federal, state, and local agencies and officials to protect and promote the interests of plans, subscribers, enrollees, and the public. (4) Study, investigate, research, and analyze matters affecting the interests of plans, subscribers, enrollees, and the public. (5) Hold public hearings, subpoena witnesses, take testimony, compel the production of books, papers, documents, and other evidence, and call upon other state agencies for information to implement the purposes, and enforce this chapter. (6) Conduct audits and examinations of the books and records of plans and other persons subject to this chapter, and may prescribe by rule or order, but is not limited to, the following: (A) The form and contents of financial statements required under this chapter. (B) The circumstances under which consolidated statements shall be filed. (C) The circumstances under which financial statements shall be audited by independent certified public accountants or public accountants. (7) Conduct necessary onsite medical surveys of the health delivery system of each plan. (8) Propose, develop, conduct, and assist in educational programs for the public, subscribers, enrollees, and licensees. (9) Promote and establish standards of ethical conduct for the administration of plans and undertake activities to encourage responsibility in the promotion and sale of plan contracts and the enrollment of subscribers or enrollees in the plans. (10) Advise the Governor on all matters affecting the interests of plans, subscribers, enrollees, and the public. (11) Determine that investments of a plan’s assets necessary to meet the requirements of Section 1376 are acceptable. For those purposes, reinvestment in the plan and investment in any obligations set forth in Article 3 (commencing with Section 1170) of, and Article 4 (commencing with Section 1190) of, Chapter 2 of Part 2 of Division 1 of the Insurance Code shall be considered acceptable. All other assets shall be invested in a prudent manner. (b) The powers enumerated in subdivision (a) shall not limit, diminish, or otherwise restrict the other powers of the director specifically set forth in this chapter and other laws. (Amended by Stats. 1999, Ch. 525, Sec. 43. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  12. 1346.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    The department must maintain a database of health care service plans operating in each county.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1346.1. The department shall maintain a database indicating for each county, the names of the health care service plans that operate in that particular county. (Added by Stats. 2003, Ch. 80, Sec. 1. Effective January 1, 2004.)
  13. 1346.2.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    The director, working with the Insurance Commissioner, must review a federal health insurance portal and, if it is found inadequate, they must jointly create and maintain an electronic clearinghouse.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1346.2. The director shall, in coordination with the Insurance Commissioner, review the Internet portal developed by the United States Secretary of Health and Human Services under subdivision (a) of Section 1103 of the federal Patient Protection and Affordable Care Act (Public Law 111-148) and paragraph (5) of subdivision (c) of Section 1311 of that act, and any enhancements to that portal expected to be implemented by the secretary on or before January 1, 2015. The review shall examine whether the Internet portal provides sufficient information regarding all health benefit products offered by health care service plans and health insurers in the individual and small employer markets in California to facilitate fair and affirmative marketing of all individual and small employer products, particularly outside the California Health Benefit Exchange created under Title 22 (commencing with Section 100500) of the Government Code. If the director and the Insurance Commissioner jointly determine that the Internet portal does not adequately achieve those purposes, they shall jointly develop and maintain an electronic clearinghouse to achieve those purposes. In performing this function, the director and the Insurance Commissioner shall routinely monitor individual and small employer benefit filings with, and complaints submitted by individuals and small employers to, their respective departments, and shall use any other available means to maintain the clearinghouse. (Added by Stats. 2010, Ch. 659, Sec. 3. (SB 900) Effective January 1, 2011.)
  14. 1346.4.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    The director must publish this chapter every year and make it available for sale to the public.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1346.4. (a) The Legislature finds and declares all of the following: (1) That millions of Californians are insured under health care service plans regulated by the Knox-Keene Health Care Service Plan Act of 1975, and that more Californians each year are insuring themselves under these health plans. (2) That greater awareness of the rights and protections afforded by the Knox-Keene Health Care Service Plan Act of 1975 will further the act’s goal of providing access to quality health care. (3) That the public, Knox-Keene providers, and those seeking to form health care service plans under the act will benefit from having the text of the act available to them, affording a greater understanding of what the act does and making it easier for providers to comply with its provisions. (b) The director shall annually publish this chapter and make it available for sale to the public. (Amended by Stats. 1999, Ch. 525, Sec. 44. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  15. 1346.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    The director must notify the Department of Insurance if an entity is found not to be a health care service plan, and must keep a public list when an entity is found to be a health care service plan. Solicitors or solicitor firms advertising or soliciting certain plan coverage in the state must give purchasers and covered persons financial and operational disclosure about the plan and any lack of coverage.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1346.5. If the director determines that an entity purporting to be a health care service plan exempt from the provisions of Section 740 of the Insurance Code is not a health care service plan, the director shall inform the Department of Insurance of that finding. However, if the director determines that an entity is a health care service plan, the director shall prepare and maintain for public inspection a list of those persons or entities described in subdivision (a) of Section 740 of the Insurance Code, which are not subject to the jurisdiction of another agency of this or another state or the federal government and which the director knows to be operating in the state. There shall be no liability of any kind on the part of the state, the director, and employees of the Department of Managed Health Care for the accuracy of the list or for any comments made with respect to it. Additionally, any solicitor or solicitor firm who advertises or solicits health care service plan coverage in this state described in subdivision (a) of Section 740 of the Insurance Code, which is provided by any person or entity described in subdivision (c) of that section, and where such coverage does not meet all pertinent requirements specified in the Insurance Code, and which is not provided or completely underwritten, insured or otherwise fully covered by a health care service plan, shall advise and disclose to any purchaser, prospective purchaser, covered person or entity, all financial and operational information relative to the content and scope of the plan and, specifically, as to the lack of plan coverage. (Amended by Stats. 2000, Ch. 857, Sec. 28. Effective January 1, 2001.)
  16. 1347.15.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    This section creates the Financial Solvency Standards Board in the Department of Managed Health Care and sets out how it is staffed, governed, and how it works.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1347.15. (a) There is hereby established in the Department of Managed Health Care the Financial Solvency Standards Board composed of 11 members. The members shall consist of the director, or the director’s designee, and 10 members appointed by the director. The 10 members appointed by the director may be, but are not necessarily limited to, health care consumer advocates and individuals with training and experience in the following subject areas or fields: medical and health care economics; accountancy, with experience in integrated or affiliated health care delivery systems; excess loss insurance underwriting in the medical, hospital, and health plan business; actuarial studies in the area of health care delivery systems; management and administration in integrated or affiliated health care delivery systems; investment banking; information technology in integrated or affiliated health care delivery systems; and large group health insurance purchasing. The members appointed by the director shall be appointed for a term of three years, but may be removed or reappointed by the director before the expiration of the term. (b) The purpose of the board is to do all of the following: (1) Advise the director on matters of financial solvency affecting the delivery of health care services. (2) Develop and recommend to the director financial solvency requirements and standards relating to plan operations, plan-affiliate operations and transactions, plan-provider contractual relationships, and provider-affiliate operations and transactions. (3) Periodically monitor and report on the implementation and results of the financial solvency requirements and standards. (c) Financial solvency requirements and standards recommended to the director by the board may, after a period of review and comment not to exceed 45 days, be noticed for adoption as regulations as proposed or modified under the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). During the director’s 45-day review and comment period, the director, in consultation with the board, may postpone the adoption of the requirements and standards pending further review and comment. Nothing in this subdivision prohibits the director from adopting regulations, including emergency regulations, under the rulemaking provisions of the Administrative Procedure Act. (d) The board shall meet at least quarterly and at the call of the chair. In order to preserve the independence of the board, the director shall not serve as chair. The members of the board may establish their own rules and procedures. All members shall serve without compensation, but shall be reimbursed from department funds for expenses actually and necessarily incurred in the performance of their duties. (e) For purposes of this section, “board” means the Financial Solvency Standards Board. (Amended by Stats. 2024, Ch. 116, Sec. 1. (AB 2767) Effective January 1, 2025.)
  17. 1347.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    Health plans offering individual coverage in the Exchange must cooperate with Exchange requests on Medi-Cal premium and cost-sharing payments, and they must not require enrollees to pay those amounts for covered services in the specified circumstances.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1347.5. (a) A health care service plan providing individual coverage in the Exchange shall cooperate with requests from the Exchange to collaborate in the development of, and participate in the implementation of, the Medi-Cal program’s premium and cost-sharing payments under Sections 14102 and 14148.65 of the Welfare and Institutions Code for eligible Exchange enrollees. (b) A health care service plan providing individual coverage in the Exchange shall not charge, bill, ask, or require an enrollee receiving benefits under Section 14102 or 14148.65 of the Welfare and Institutions Code to make any premium or cost-sharing payments for any services that are subject to premium or cost-sharing payments by the State Department of Health Care Services under Section 14102 or 14148.65 of the Welfare and Institutions Code. (c) For purposes of this section, “Exchange” means the California Health Benefit Exchange established pursuant to Title 22 (commencing with Section 100500) of the Government Code. (Amended by Stats. 2015, Ch. 303, Sec. 249. (AB 731) Effective January 1, 2016.)
  18. 1347.8.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    A health care service plan with a qualified health plan through the Exchange must file annual reports to the director, and certain plans must transfer funds to the Abortion Access Fund under specified limits.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1347.8. (a) (1) Beginning on July 1, 2023, and annually thereafter, a health care service plan providing a qualified health plan through the Exchange shall report to the director the total amount of funds maintained in a segregated account pursuant to subsection (b) of Section 1303 of the federal Patient Protection and Affordable Care Act (Public Law 111-148). (2) This annual report shall contain the ending balance of the account and the total dollar amount of claims paid during the reporting year. This report shall also include any related documentation required by the director. (b) For purposes of this section: (1) “Exchange” means the California Health Benefit Exchange established pursuant to Title 22 (commencing with Section 100500) of the Government Code. (2) “Qualified health plan” has the same meaning as defined in Section 1301 of the federal Patient Protection and Affordable Care Act (Public Law 111-148). (c) Annually from the 2025–26 fiscal year to the 2028–29 fiscal year, inclusive, and upon receipt of the required annual report, the director shall order the transfer of funds from each qualified health plan’s segregated account with a positive balance, and each qualified health plan shall complete the transfer, to the Abortion Access Fund established in Section 127641, as follows: (1) On or before October 30, 2025, up to the total amount provided by the California Health Benefit Exchange to qualified health plans pursuant to Section 100503.5 of the Government Code as of July 1, 2025, not to exceed 75 percent of the amount of the ending balance of the qualified health plan’s segregated account as of July 1, 2025. (2) On or before September 1, 2026, and each year thereafter through the 2028–29 fiscal year, up to the total amount provided by the California Health Benefit Exchange to qualified health plans pursuant to Section 100503.5 of the Government Code as of July 1 of that year, not to exceed 50 percent of the amount of the ending balance of a qualified health plan’s segregated account that exceeds claims paid in the prior plan year. (Amended by Stats. 2025, Ch. 105, Sec. 17. (AB 144) Effective September 17, 2025.)
  19. 1348.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    Health care service plans must create an antifraud plan, submit it to the department, and give the director an annual written fraud report.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1348. (a) Every health care service plan licensed to do business in this state shall establish an antifraud plan. The purpose of the antifraud plan shall be to organize and implement an antifraud strategy to identify and reduce costs to the plans, providers, subscribers, enrollees, and others caused by fraudulent activities, and to protect consumers in the delivery of health care services through the timely detection, investigation, and prosecution of suspected fraud. The antifraud plan elements shall include, but not be limited to, all of the following: the designation of, or a contract with, individuals with specific investigative expertise in the management of fraud investigations; training of plan personnel and contractors concerning the detection of health care fraud; the plan’s procedure for managing incidents of suspected fraud; and the internal procedure for referring suspected fraud to the appropriate government agency. (b) Every plan shall submit its antifraud plan to the department no later than July 1, 1999. Any changes shall be filed with the department pursuant to Section 1352. The submission shall describe the manner in which the plan is complying with subdivision (a), and the name and telephone number of the contact person to whom inquiries concerning the antifraud plan may be directed. (c) Every health care service plan that establishes an antifraud plan pursuant to subdivision (a) shall provide to the director an annual written report describing the plan’s efforts to deter, detect, and investigate fraud, and to report cases of fraud to a law enforcement agency. For those cases that are reported to law enforcement agencies by the plan, this report shall include the number of cases prosecuted to the extent known by the plan. This report may also include recommendations by the plan to improve efforts to combat health care fraud. (d) Nothing in this section shall be construed to limit the director’s authority to implement this section in accordance with Section 1344. (e) For purposes of this section, “fraud” includes, but is not limited to, knowingly making or causing to be made any false or fraudulent claim for payment of a health care benefit. (f) Nothing in this section shall be construed to limit any civil, criminal, or administrative liability under any other provision of law. (Amended by Stats. 1999, Ch. 525, Sec. 48. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  20. 1348.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    A health care service plan must comply with Civil Code Section 56.107 to the extent that section requires.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1348.5. A health care service plan shall comply with the provisions of Section 56.107 of the Civil Code to the extent required by that section. To the extent this chapter conflicts with Section 56.107 of the Civil Code, the provisions of Section 56.107 of the Civil Code shall control. (Added by Stats. 2013, Ch. 444, Sec. 10. (SB 138) Effective January 1, 2014.)
  21. 1348.6.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    Health care service plan contracts may not include direct incentive payments meant to encourage denial, reduction, limitation, or delay of medically necessary services, but general payments and shared-risk arrangements are allowed if they are not tied to specific medical decisions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1348.6. (a) No contract between a health care service plan and a physician, physician group, or other licensed health care practitioner shall contain any incentive plan that includes specific payment made directly, in any type or form, to a physician, physician group, or other licensed health care practitioner as an inducement to deny, reduce, limit, or delay specific, medically necessary, and appropriate services provided with respect to a specific enrollee or groups of enrollees with similar medical conditions. (b) Nothing in this section shall be construed to prohibit contracts that contain incentive plans that involve general payments, such as capitation payments, or shared-risk arrangements that are not tied to specific medical decisions involving specific enrollees or groups of enrollees with similar medical conditions. The payments rendered or to be rendered to physicians, physician groups, or other licensed health care practitioners under these arrangements shall be deemed confidential information in accordance with subdivision (d) of Section 1351. (Added by Stats. 1996, Ch. 1014, Sec. 2. Effective January 1, 1997.)
  22. 1348.8.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    Health care service plans that provide telephone medical advice services must make sure the service and staff meet licensing, practice, recordkeeping, and reporting requirements.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1348.8. (a) A health care service plan that provides, operates, or contracts for telephone medical advice services to its enrollees and subscribers shall do all of the following: (1) Ensure that the in-state or out-of-state telephone medical advice service complies with the requirements of Chapter 15 (commencing with Section 4999) of Division 2 of the Business and Professions Code. (2) Ensure that the staff providing telephone medical advice services for the in-state or out-of-state telephone medical advice service are licensed as follows: (A) For full service health care service plans, the staff hold a valid California license as a registered nurse or a valid license in the state within which they provide telephone medical advice services as a physician and surgeon or physician assistant, and are operating in compliance with the laws governing their respective scopes of practice. (B) (i) For specialized health care service plans providing, operating, or contracting with a telephone medical advice service in California, the staff shall be appropriately licensed, registered, or certified as a dentist pursuant to Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code, as a dental hygienist pursuant to Article 7 (commencing with Section 1740) of Chapter 4 of Division 2 of the Business and Professions Code, as a physician and surgeon pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code or the Osteopathic Initiative Act, as a registered nurse pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code, as a psychologist pursuant to Chapter 6.6 (commencing with Section 2900) of Division 2 of the Business and Professions Code, as an optometrist pursuant to Chapter 7 (commencing with Section 3000) of Division 2 of the Business and Professions Code, as a marriage and family therapist pursuant to Chapter 13 (commencing with Section 4980) of Division 2 of the Business and Professions Code, as a licensed clinical social worker pursuant to Chapter 14 (commencing with Section 4991) of Division 2 of the Business and Professions Code, as a professional clinical counselor pursuant to Chapter 16 (commencing with Section 4999.10) of Division 2 of the Business and Professions Code, or as a chiropractor pursuant to the Chiropractic Initiative Act, and operating in compliance with the laws governing their respective scopes of practice. (ii) For specialized health care service plans providing, operating, or contracting with an out-of-state telephone medical advice service, the staff shall be health care professionals, as identified in clause (i), who are licensed, registered, or certified in the state within which they are providing the telephone medical advice services and are operating in compliance with the laws governing their respective scopes of practice. All registered nurses providing telephone medical advice services to both in-state and out-of-state business entities registered pursuant to this chapter shall be licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code. (3) Ensure that every full service health care service plan provides for a physician and surgeon who is available on an on-call basis at all times the service is advertised to be available to enrollees and subscribers. (4) Ensure that staff members handling enrollee or subscriber calls, who are not licensed, certified, or registered as required by paragraph (2), do not provide telephone medical advice. Those staff members may ask questions on behalf of a staff member who is licensed, certified, or registered as required by paragraph (2), in order to help ascertain the condition of an enrollee or subscriber so that the enrollee or subscriber can be referred to licensed staff. However, under no circumstances shall those staff members use the answers to those questions in an attempt to assess, evaluate, advise, or make any decision regarding the condition of an enrollee or subscriber or determine when an enrollee or subscriber needs to be seen by a licensed medical professional. (5) Ensure that no staff member uses a title or designation when speaking to an enrollee or subscriber that may cause a reasonable person to believe that the staff member is a licensed, certified, or registered professional described in Section 4999.2 of the Business and Professions Code unless the staff member is a licensed, certified, or registered professional. (6) Ensure that the in-state or out-of-state telephone medical advice service designates an agent for service of process in California and files this designation with the director. (7) Require that the in-state or out-of-state telephone medical advice service makes and maintains records for a period of five years after the telephone medical advice services are provided, including, but not limited to, oral or written transcripts of all medical advice conversations with the health care service plan’s enrollees or subscribers in California and copies of all complaints. If the records of telephone medical advice services are kept out of state, the health care service plan shall, upon the request of the director, provide the records to the director within 10 days of the request. (8) Ensure that the telephone medical advice services are provided consistent with good professional practice. (b) The director shall forward to the Department of Consumer Affairs, within 30 days of the end of each calendar quarter, data regarding complaints filed with the department concerning telephone medical advice services. (c) For purposes of this section, “telephone medical advice” means a telephonic communication between a patient and a health care professional in which the health care professional’s primary function is to provide to the patient a telephonic response to the patient’s questions regarding his or her or a family member’s medical care or treatment. “Telephone medical advice” includes assessment, evaluation, or advice provided to patients or their family members. (Amended by Stats. 2016, Ch. 799, Sec. 42. (SB 1039) Effective January 1, 2017.)
  23. 1348.9.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    The director must adopt regulations for a Consumer Participation Program, and the department must post annual fee information. The section also caps awarded fees and excludes individual grievances, complaints, and cases.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1348.9. (a) On or before July 1, 2003, the director shall adopt regulations to establish the Consumer Participation Program, which shall allow for the director to award reasonable advocacy and witness fees to a person or organization that demonstrates that the person or organization represents the interests of consumers and has made a substantial contribution on behalf of consumers to the adoption of a regulation or to an order or decision made by the director if the order or decision has the potential to impact a significant number of enrollees. (b) The regulations adopted by the director shall include specifications for eligibility of participation, rates of compensation, and procedures for seeking compensation. The regulations shall require that the person or organization demonstrate a record of advocacy on behalf of health care consumers in administrative or legislative proceedings in order to determine whether the person or organization represents the interests of consumers. (c) This section applies to all proceedings of the department, but does not apply to resolution of individual grievances, complaints, or cases. (d) Fees awarded pursuant to this section may not exceed three hundred fifty thousand dollars ($350,000) each fiscal year. (e) The fees awarded pursuant to this section shall be considered costs and expenses pursuant to Section 1356 and shall be paid from the assessment made under that section. The amount of the assessment shall not be increased to pay the fees awarded under this section. (f) By March 1, 2022, and annually each March 1 thereafter, the department shall post all of the following information on its public internet website: (1) The amount of reasonable advocacy and witness fees awarded each fiscal year. (2) The individuals or organization to whom advocacy and witness fees were awarded pursuant to this section. (3) The orders, decisions, and regulations pursuant to which the advocacy and witness fees were awarded. (Amended by Stats. 2021, Ch. 741, Sec. 1. (AB 326) Effective January 1, 2022.)
  24. 1348.95.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    Health care service plans must report enrollee and MEWA coverage data to the department, and the department must publicly report the data.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1348.95. (a) Commencing March 1, 2013, and at least annually thereafter, a health care service plan, not including a health care service plan offering specialized health care service plan contracts, shall provide to the department, in a form and manner determined by the department in consultation with the Department of Insurance, the number of enrollees, by product type, as of December 31 of the prior year, that receive health care coverage under a health care service plan contract that covers individuals and small groups inside and outside of the California Health Benefit Exchange, large groups, administrative services only business lines, and any other business lines. Health care service plans shall include the enrollment data in specific product types as determined by the department, including, but not limited to, HMO, point-of-service, PPO, grandfathered, and Medi-Cal managed care. Data reported pursuant to this subdivision shall specify the covered persons that are being reported pursuant to subdivision (b). (b) Commencing March 1, 2020, and at least annually thereafter, a health care service plan that provides coverage through a multiple employer welfare arrangement (MEWA) that is not subject to Article 4.7 (commencing with Section 742.20) of Chapter 1 of Part 2 of Division 1 of the Insurance Code shall provide to the department, in a form and manner determined by the department in consultation with the Department of Insurance, the name of each MEWA and the number of covered persons in each MEWA as of December 31 of the prior year, divided by market segment and product type. Data reported pursuant to this subdivision shall be identified and separately reported under subdivision (a). (c) The department shall publicly report the data provided by each health care service plan pursuant to this section, including, but not limited to, posting the data on the department’s internet website. The department shall consult with the Department of Insurance to ensure that the data reported is comparable and consistent, does not duplicate existing reporting requirements, and utilizes existing reporting formats. The data for the previous calendar year shall be made available no later than April 15 of each calendar year. (Amended by Stats. 2020, Ch. 370, Sec. 192. (SB 1371) Effective January 1, 2021.)
  25. 1348.96.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. )

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    A health care service plan must concurrently send to the department any data it submits to federal health authorities for the risk adjustment program, in the same format.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 2. Administration [1346 - 1348.96] ( Article 2 added by Stats. 1975, Ch. 941. ) ## 1348.96. Any data submitted by a health care service plan to the United States Secretary of Health and Human Services, or his or her designee, for purposes of the risk adjustment program described in Section 1343 of the federal Patient Protection and Affordable Care Act (42 U.S.C. Sec. 18063) shall be concurrently submitted to the department in the same format. The department shall use the information to monitor federal implementation of risk adjustment in the state and to ensure that health care service plans are in compliance with federal requirements related to risk adjustment. (Added by Stats. 2013, 1st Ex. Sess., Ch. 2, Sec. 1. (SB 2 1x) Effective September 30, 2013.)
  26. 1349.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    A person may not do business as a plan in this state, or take advance or periodic payments for a plan, unless the person first gets a current license from the director or qualifies for an exemption.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1349. It is unlawful for any person to engage in business as a plan in this state or to receive advance or periodic consideration in connection with a plan from or on behalf of persons in this state unless such person has first secured from the director a license, then in effect, as a plan or unless such person is exempted by the provisions of Section 1343 or a rule adopted thereunder. A person licensed pursuant to this chapter need not be licensed pursuant to the Insurance Code to operate a health care service plan or specialized health care service plan unless the plan is operated by an insurer, in which case the insurer shall also be licensed by the Insurance Commissioner. (Amended by Stats. 1999, Ch. 525, Sec. 49. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  27. 1349.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    A health care service plan is exempt from Section 1349 if it provides only emergency ambulance or advanced life support services, and it is operated by specified public entities.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1349.1. A health care service plan which satisfies both of the following criteria is exempt from Section 1349: (a) Provides only emergency ambulance services or advanced life support services, as defined by Section 1797.52, or both. (b) Is operated by the State of California, any city, county, city and county, public district, or public authority. (Added by Stats. 1986, Ch. 502, Sec. 1.)
  28. 1349.2.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    Certain public-entity health care service plans are exempt from this chapter if they meet listed conditions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1349.2. (a) A health care service plan, including a self-insured reimbursement plan that pays for or reimburses any part of the cost of health care services, operated by any city, county, city and county, public entity, political subdivision, or public joint labor management trust that satisfies all of the following criteria is exempt from this chapter: (1) Provides services or reimbursement only to employees, retirees, and the dependents of those employees and retirees, of any participating city, county, city and county, public entity, or political subdivision, but not to the general public. (2) Provides funding for the program. (3) Provides that providers are reimbursed solely on a fee-for-service basis, so that providers are not at risk in contracting arrangements. (4) Complies with Section 1378 and, to the extent that a plan contracts directly with providers for health care services, complies with Section 1379. (5) Does not reduce or change current benefits except in accordance with collective bargaining agreements, or as otherwise authorized by the governing body in the case of unrepresented employees, and provides, pays for, or reimburses at least part of the cost of all basic health care services as defined in subdivision (b) of Section 1345. Plans covering only a single specialized health care service, including dental, vision, or mental health services, shall not be required to cover all basic health care services. (6) Refrains from any conduct that constitutes fraud or dishonest dealing or unfair competition, as defined by Section 17200 of the Business and Professions Code, and notifies enrollees of their right to file complaints with the director regarding any violation of this exemption. (7) Maintains a fiscally sound operation and makes adequate provision against the risk of insolvency so that enrollees are not at risk, individually or collectively, as evidenced by audited financial statements submitted to the director as of the end of the plan’s fiscal year, within 180 days after the close of that fiscal year. The financial statements shall be accompanied by a report, certificate, or opinion of an independent certified public accountant. The financial statements shall be prepared in accordance with generally accepted accounting principles. The audit shall be conducted in accordance with generally accepted auditing standards. However, audits of public entities or political subdivisions shall be conducted in accordance with governmental auditing standards. Upon request, the governing body of the plan shall provide copies thereof, without charge, to any enrollee or recognized and participating employee organization. (8) Submits with the annual financial statements required under paragraph (7), a declaration, which shall conform to Section 2015.5 of the Code of Civil Procedure, executed by a plan official authorized by the governing body of the plan, that the plan complies with this subdivision. (b) The director’s responsibilities under this section shall be limited to enforcing compliance with this section. Nothing in this section shall impair or impede the director’s enforcement authority or the remedies available under this chapter, including, but not limited to, the termination of the plan’s exemption under this section. (c) A public joint labor management trust is a trust maintained by one or more participating cities, counties, cities and counties, public entities, or political subdivisions that appoint management representatives, and one or more recognized and participating employee organizations representing the employees of one or more of the cities, counties, cities and counties, public entities, or political subdivisions that appoint labor representatives, in which the management representatives and the labor representatives have equal voting power in the operation of the trust. (d) A public joint labor management trust shall not be deemed to provide services or reimbursement to the general public if, in addition to providing services or reimbursement to the persons described in paragraph (1) of subdivision (a), it provides services or reimbursement only to employees, retirees, and dependents of those employees and retirees, of the recognized and participating employee organizations or of the trust. (e) Nothing in this section shall be construed to prohibit a recognized and participating employee organization from filing a complaint with the director regarding a violation of this section. (Amended by Stats. 1999, Ch. 525, Sec. 50. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  29. 135.

    ## Health and Safety Code - HSC ## DIVISION 1. ADMINISTRATION OF PUBLIC HEALTH [135 - 1179.102] ( Division 1 enacted by Stats. 1939, Ch. 60. ) ## PART 0.5. California Health and Human Services Agency Departments: Public Notice Requirements [135- 135.] ( Part 0.5 added by Stats. 2015, Ch. 296, Sec. 1. )

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    Covered departments must publish a homepage hyperlink to approved plans and waivers when the stated federal approval conditions are met.

    ## Health and Safety Code - HSC ## DIVISION 1. ADMINISTRATION OF PUBLIC HEALTH [135 - 1179.102] ( Division 1 enacted by Stats. 1939, Ch. 60. ) ## PART 0.5. California Health and Human Services Agency Departments: Public Notice Requirements [135- 135.] ( Part 0.5 added by Stats. 2015, Ch. 296, Sec. 1. ) ## 135. If a department within the California Health and Human Services Agency has received approval of an operational state plan by a federal agency, or has applied and has been approved for a waiver from a federal law or federal regulation, the department shall make any and all approved plans and waivers available to the public by publishing a hyperlink to that information on the homepage of the department’s Internet Web site. (Added by Stats. 2015, Ch. 296, Sec. 1. (AB 294) Effective January 1, 2016.)
  30. 1350.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    A sponsor of a qualifying prescription drug plan must hold an appropriate valid license, and a licensed health care service plan operating a prescription drug plan is subject to this chapter unless federal law preempts it.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1350. (a) Consistent with federal law, a sponsor of a prescription drug plan authorized by the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173) shall hold a valid license as a health care service plan issued by the department or as a life and disability insurer by the Department of Insurance. (b) An entity that is licensed as a health care service plan and that operates a prescription drug plan shall be subject to the provisions of this chapter, unless preempted by federal law. (Added by Stats. 2005, Ch. 230, Sec. 1. Effective September 6, 2005.)
  31. 1351.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    Applications for licensure as a health care service plan or specialized health care service plan must be verified, use the department’s form, include the required fee, and include the listed supporting documents and information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1351. Each application for licensure as a health care service plan or specialized health care service plan under this chapter shall be verified by an authorized representative of the applicant, and shall be in a form prescribed by the department. This application shall be accompanied by the fee prescribed by subdivision (a) of Section 1356 and shall set forth or be accompanied by each and all of the following: (a) The basic organizational documents of the applicant; such as, the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents and all amendments thereto. (b) A copy of the bylaws, rules and regulations, or similar documents regulating the conduct of the internal affairs of the applicant. (c) A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, which shall include among others, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers, each shareholder with over 5-percent interest in the case of a corporation, and all partners or members in the case of a partnership or association, and each person who has loaned funds to the applicant for the operation of its business. (d) A copy of any contract made, or to be made, between the applicant and any provider of health care services, or persons listed in subdivision (c), or any other person or organization agreeing to perform an administrative function or service for the plan. The director by rule may identify contracts excluded from this requirement and make provision for the submission of form contracts. The payment rendered or to be rendered to such provider of health care services shall be deemed confidential information that shall not be divulged by the director, except that such payment may be disclosed and become a public record in any legislative, administrative, or judicial proceeding or inquiry. The plan shall also submit the name and address of each physician employed by or contracting with the plan, together with his or her license number. (e) A statement describing the plan, its method of providing for health care services and its physical facilities. If applicable, this statement shall include the health care delivery capabilities of the plan including the number of full-time and part-time primary physicians, the number of full-time and part-time and specialties of all nonprimary physicians; the numbers and types of licensed or state-certified health care support staff, the number of hospital beds contracted for, and the arrangements and the methods by which health care services will be provided. For purposes of this subdivision, primary physicians include general and family practitioners, internists, pediatricians, obstetricians, and gynecologists. (f) A copy of the forms of evidence of coverage and of the disclosure forms or material which are to be issued to subscribers or enrollees of the plan. (g) A copy of the form of the individual contract which is to be issued to individual subscribers and the form of group contract which is to be issued to any employers, unions, trustees, or other organizations. (h) Financial statements accompanied by a report, certificate, or opinion of an independent certified public accountant. However, financial statements from public entities or political subdivisions of the state need not include a report, certificate, or opinion by an independent certified public accountant if the financial statement complies with such requirements as may be established by regulation of the director. (i) A description of the proposed method of marketing the plan and a copy of any contract made with any person to solicit on behalf of the plan or a copy of the form of agreement used and a list of the contracting parties. (j) A power of attorney duly executed by any applicant, not domiciled in this state, appointing the director the true and lawful attorney in fact of such applicant in this state for the purposes of service of all lawful process in any legal action or proceeding against the plan on a cause of action arising in this state. (k) A statement describing the service area or areas to be served, including the service location for each provider rendering professional services on behalf of the plan and the location of any other plan facilities where required by the director. (l) A description of enrollee-subscriber grievance procedures to be utilized as required by this chapter, and a copy of the form specified by subdivision (c) of Section 1368. (m) A description of the procedures and programs for internal review of the quality of health care pursuant to the requirements set forth in this chapter. (n) A description of the mechanism by which enrollees and subscribers will be afforded an opportunity to express their views on matters relating to the policy and operation of the plan. (o) Evidence of adequate insurance coverage or self-insurance to respond to claims for damages arising out of the furnishing of health care services. (p) Evidence of adequate insurance coverage or self-insurance to protect against losses of facilities where required by the director. (q) If required by the director by rule pursuant to Section 1376, a fidelity bond or a surety bond in the amount prescribed. (r) Evidence of adequate workmen’s compensation insurance coverage to protect against claims arising out of work-related injuries that might be brought by the employees and staff of a plan against the plan. (s) All relevant information known to the applicant concerning whether the plan, its management company, or any other affiliate of the plan, or any controlling person, officer, director, or other person occupying a principal management or supervisory position in the plan, management company, or other affiliate, has any of the following: (1) Any history of noncompliance with applicable state or federal laws, regulations, or requirements related to providing, or arranging to provide for, health care services or benefits in this state or any other state. (2) Any history of noncompliance with applicable state or federal laws, regulations, or requirements related to providing, or arranging to provide for, health care services or benefits authorized for reimbursement under the federal Medicare or Medicaid Program. (3) Any history of noncompliance with applicable state or federal laws, regulations, or requirements related to providing, or arranging for the provision of, health care services as a licensed health professional or an individual or entity contracting with a health care service plan or insurer in this state or any other state. (t) Such other information as the director may reasonably require. (Amended by Stats. 2006, Ch. 758, Sec. 2. Effective January 1, 2007.)
  32. 1351.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    An application must include authorization allowing the director to obtain financial records, if the director requests it.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1351.1. In addition to the requirements of Section 1351 and upon request of the director, each application shall be accompanied by authorization for disclosure to the director of financial records of each health care service plan or specialized health care service plan licensed under this chapter pursuant to Section 7473 of the Government Code. For the purpose of this chapter, the authorization for disclosure shall also include the financial records of any association, partnership or corporation controlling, controlled by or otherwise affiliated with a health care service plan or specialized health care service plan. (Amended by Stats. 1999, Ch. 525, Sec. 52. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  33. 1351.2.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    A Mexico-based prepaid health plan may operate in California only if it applies for licensure, meets listed compliance conditions, pays required fees, keeps records available, and follows director oversight.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1351.2. (a) If a prepaid health plan operating lawfully under the laws of Mexico elects to operate a health care service plan in this state, the prepaid health plan shall apply for licensure as a health care service plan under this chapter by filing an application for licensure in the form prescribed by the department and verified by an authorized representative of the applicant. The prepaid health plan shall be subject to the provisions of this chapter, and the rules adopted by the director thereunder, as determined by the director to be applicable. The application shall be accompanied by the fee prescribed by subdivision (a) of Section 1356 and shall demonstrate compliance with the following requirements: (1) The prepaid health plan is constituted and operating lawfully under the laws of Mexico and, if required by Mexican law, is authorized as an Insurance Institution Specializing in Health by the Mexican Insurance Commission. If the Mexican Insurance Commission determines that the prepaid health plan is not required to be authorized as an Insurance Institution Specializing in Health under the laws of Mexico, the applicant shall obtain written verification from the Mexican Insurance Commission stating that the applicant is not required to be authorized as an Insurance Institution Specializing in Health in Mexico. A Mexican prepaid health plan that is not required to be an Insurance Institution Specializing in Health shall obtain written verification from the Mexican Ministry of Health that the prepaid health plan and its provider network are operating in full compliance of Mexican law. (2) The prepaid health plan offers and sells in this state only employer-sponsored group plan contracts exclusively for the benefit of Mexican nationals legally employed in the County of San Diego or the County of Imperial, and for the benefit of their dependents regardless of nationality, that pay for, reimburse the cost of, or arrange for the provision or delivery of health care services that are to be provided or delivered wholly in Mexico, except for the provision or delivery of those health care services set forth in paragraph (4). (3) Solicitation of plan contracts in this state is made only through insurance brokers and agents licensed in this state or a third-party administrator licensed in this state, each of which is authorized to offer and sell plan group contracts. (4) Group contracts provide, through a contract of insurance between the prepaid health plan and an insurer admitted in this state, for the reimbursement of emergency and urgent care services provided out of area as required by subdivision (h) of Section 1345. (5) All advertising, solicitation material, disclosure statements, evidences of coverage, and contracts are in compliance with the appropriate provisions of this chapter and the rules or orders of the director. The director shall require that each of these documents contain a legend in 10-point type, in both English and Spanish, declaring that the health care service plan contract provided by the prepaid health plan may be limited as to benefits, rights, and remedies under state and federal law. (6) All funds received by the prepaid health plan from a subscriber are deposited in an account of a bank organized under the laws of this state or in an account of a national bank located in this state. (7) The prepaid health plan maintains a tangible net equity as required by this chapter and the rules of the director, as calculated under United States generally accepted accounting principles, in the amount of a least one million dollars ($1,000,000). In lieu of an amount in excess of the minimum tangible net equity of one million dollars ($1,000,000), the prepaid health plan may demonstrate a reasonable acceptable alternative reimbursement arrangement that the director may in his or her discretion accept. The prepaid health plan shall also maintain a fidelity bond and a surety bond as required by Section 1376 and the rules of the director. (8) The prepaid health plan agrees to make all of its books and records, including the books and records of health care providers in Mexico, available to the director in the form and at the time and place requested by the director. Books and records shall be made available to the director no later than 24 hours from the date of the request. (9) The prepaid health plan files a consent to service of process with the director and agrees to be subject to the laws of this state and the United States in any investigation, examination, dispute, or other matter arising from the advertising, solicitation, or offer and sale of a plan contract, or the management or provision of health care services in this state or throughout the United States. The prepaid health plan shall agree to notify the director, immediately and in no case later than one business day, if it is subject to any investigation, examination, or administrative or legal action relating to the prepaid health plan or the operations of the prepaid health plan initiated by the government of Mexico or the government of any state of Mexico against the prepaid health plan or any officer, director, security holder, or contractor owning 10 percent or more of the securities of the prepaid health plan. The prepaid health plan shall agree that in the event of conflict of laws in any action arising out of the license, the laws of California and the United States shall apply. (10) The prepaid health plan agrees that disputes arising from the group contracts involving group contractholders and providers of health care services in the United States shall be subject to the jurisdiction of the courts of this state and the United States. (11) The prepaid health plan shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act for health care services set forth in paragraph (4). For health care services that are to be provided or delivered wholly in Mexico, the prepaid health plan may employ or designate a medical director operating under the laws of Mexico. (b) The prepaid health plan shall pay the application processing fee and other fees and assessments set forth in Section 1356. The director, by order, may designate provisions of this chapter and rules adopted thereunder that need not be applied to a prepaid health plan licensed under the laws of Mexico when consistent with the intent and purpose of this chapter, and in the public interest. (c) If the plan ceases to operate legally in Mexico, the director shall immediately deliver written notice to the health care service plan that it is not in compliance with the provisions of this section. If this occurs, a health care service plan shall do all of the following: (1) Provide the director with written proof that the prepaid health plan has complied with the laws of Mexico not later than 45 days after the date the written notice is received by the health care service plan. (2) If, by the 45th day, the health care service plan is unable to provide written confirmation that it is in full compliance with Mexican law, the director shall notify the health care service plan in writing that it is prohibited from accepting any new enrollees or subscribers. The health care service plan shall be given an additional 180 days to comply with Mexican law or to become a licensed health care service plan. (3) If, at the end of the 180-day notice period in paragraph (2), the health care service plan has not complied with the laws of Mexico or California, the director shall issue an order that the health care service plan cease and desist operations in California. (Amended (as amended by Stats. 2004, Ch. 491, Sec. 1) by Stats. 2007, Ch. 196, Sec. 1. Effective January 1, 2008.)
  34. 1351.3.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    When reviewing an initial license application, the department must consider information about noncompliance history and other relevant misconduct information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1351.3. On and after January 1, 2007, the department, in considering an application for an initial license for any entity under this chapter, shall consider any information provided concerning whether the plan, its management company, or any other affiliate of the plan, or any controlling person, officer, director, or other person occupying a principal management or supervisory position in the plan, management company, or affiliate has any history of noncompliance, as described in subdivision (s) of Section 1351, and any other relevant information concerning misconduct. (Added by Stats. 2006, Ch. 758, Sec. 3. Effective January 1, 2007.)
  35. 1352.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    A licensed health care service plan must file amendment and notice updates with the director after certain changes, and a material modification cannot take effect until the director acts.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1352. (a) A licensed plan shall, within 30 days after any change in the information contained in its application, other than financial or statistical information, file an amendment thereto in the manner the director may by rule prescribe setting forth the changed information. However, the addition of any association, partnership, or corporation in a controlling, controlled, or affiliated status relative to the plan shall necessitate filing, within a 30-day period of an authorization for disclosure to the director of financial records of the person pursuant to Section 7473 of the Government Code. (b) Prior to a material modification of its plan or operations, a plan shall give notice thereof to the director, who shall, within 20 business days or such additional time as the plan may specify, by order approve, disapprove, suspend, or postpone the effectiveness of the change, subject to Section 1354. (c) A plan shall, within five days, give written notice to the director in the form as by rule may be prescribed, of a change in the officers, directors, partners, controlling shareholders, principal creditors, or persons occupying similar positions or performing similar functions, of the plan and of a management company of the plan, and of a parent company of the plan or management company. The director may by rule define the positions, duties, and relationships which are referred to in this subdivision. (d) The fee for filing a notice of material modification pursuant to subdivision (b) shall be the actual cost to the director of processing the notice, including overhead, but shall not exceed seven hundred fifty dollars ($750). (Amended by Stats. 2007, Ch. 577, Sec. 11. Effective October 13, 2007.)
  36. 1352.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    Health care service plans face filing, approval, and template rules for certain contracts and disclosure materials.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1352.1. (a) Except as provided in subdivision (b), no plan shall enter into any new or modified plan contract or publish or distribute, or allow to be published or distributed on its behalf, any disclosure form or evidence of coverage, unless (1) a true copy thereof has first been filed with the director, at least 30 days prior to any such use, or any shorter period as the director by rule or order may allow, and (2) the director by notice has not found the plan contract, disclosure form, or evidence of coverage, wholly or in part, to be untrue, misleading, deceptive, or otherwise not in compliance with this chapter or the rules thereunder, and specified the deficiencies, within at least 30 days or any shorter time as the director by rule or order may allow. (b) Except as provided in subdivision (d), a licensed plan which has been continuously licensed under this chapter for the preceding 18 months and which has had group contracts in effect at all times during that period may enter a new or modified group contract or may publish or distribute, or allow to be published or distributed on its behalf, any group disclosure form or evidence of coverage without having filed the same for the director’s prior approval, if the plan and the materials comply with each of the following conditions: (1) The contract, disclosure form, or evidence of coverage, or any material provision thereof, has not been previously disapproved by the director by written notice to the plan and the plan reasonably believes that the contract, disclosure form, and evidence of coverage do not violate any requirements of this chapter or the rules thereunder. (2) The plan files the contract and any related disclosure form and evidence of coverage with the director not later than 10 business days after entering the contract, or within any additional period as the director by rule or order may provide. (3) If the person or group entering into the contract with the plan is not an employee welfare benefit plan, as defined in the Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), the person or group is not organized solely or principally for the purpose of providing health benefits to members of the group. (c) Effective January 1, 2025, a plan shall utilize the standard templates developed by the department pursuant to Section 1363 for any disclosure form or evidence of coverage published or distributed. This subdivision shall not apply to Medi-Cal managed care plan contracts entered into with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code. (d) The director by order may require a plan which has entered any group contract or published or distributed, or allowed to be published or distributed on its behalf, any disclosure form or evidence of coverage in violation of this chapter or the rules thereunder to comply with subdivision (a) prior to entering group contracts, or a specified class of group contracts, and prior to publishing or distributing, or allowing to be published or distributed on its behalf, related disclosure forms and evidences of coverage. An order issued pursuant to this subdivision shall be effective for 12 months from its issuance, and may be renewed by order if the contracts, disclosure forms, or evidences of coverage submitted under this subdivision indicate difficulties of voluntary compliance with the applicable provisions of this chapter and the rules thereunder. (e) A licensed plan or other person regulated under this chapter may, within 30 days after receipt of any notice or order under this section, file a written request for a hearing with the director. (Amended by Stats. 2023, Ch. 42, Sec. 12. (AB 118) Effective July 10, 2023.)
  37. 1353.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    The director must issue a license to an applicant who meets the chapter’s requirements and passes the director’s review; otherwise, the director must deny the application.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1353. The director shall issue a license to any person filing an application pursuant to this article, if the director, upon due consideration of the application and of the information obtained in any investigation, including, if necessary, an onsite inspection, determines that the applicant has satisfied the provisions of this chapter and that, in the judgment of the director, a disciplinary action pursuant to Section 1386 would not be warranted against such applicant. Otherwise, the director shall deny the application. (Amended by Stats. 1999, Ch. 525, Sec. 56. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  38. 1354.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    If licensure is denied, the director must send the applicant a written notice stating the reason. The applicant may request a hearing in writing within 30 days after the notice is mailed.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1354. Upon denial of application for licensure, or the issuance of an order pursuant to Section 1352 disapproving, suspending, or postponing a material modification, the director shall notify the applicant in writing, stating the reason for the denial and that the applicant has the right to a hearing if the applicant makes written request within 30 days after the date of mailing of the notice of denial. Service of the notice required by this subdivision may be made by certified mail addressed to the applicant at the latest address filed by the applicant in writing with the department. (Amended by Stats. 1999, Ch. 525, Sec. 57. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  39. 1355.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    A plan’s license under this chapter stays in effect until the director revokes or suspends it. Transitional licenses expire on September 30, 1978 unless the director extends that date.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1355. Every plan’s license issued under this chapter shall remain in effect until revoked or suspended by the director, except that every transitional license shall expire on September 30, 1978, unless such expiration date is extended by the director. (Amended by Stats. 1999, Ch. 525, Sec. 58. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  40. 1356.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    Health care service plans must reimburse and pay certain licensing and oversight fees to the director, and the director cannot issue a license until payment is made in full.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1356. (a) Each plan applying for licensure under this chapter shall reimburse the director for the actual cost of processing the application, including overhead, up to an amount not to exceed twenty-five thousand dollars ($25,000). The cost shall be billed not more frequently than monthly and shall be remitted by the applicant to the director within 30 days of the date of billing. The director shall not issue a license to an applicant prior to receiving payment in full from that applicant for all amounts charged pursuant to this subdivision. (b) (1) In addition to other fees and reimbursements required to be paid under this chapter, each licensed plan shall pay to the director an amount as estimated by the director for the ensuing fiscal year, as a reimbursement of its share of all costs and expenses, including, but not limited to, costs and expenses associated with routine financial examinations, grievances, and complaints including maintaining a toll-free telephone number for consumer grievances and complaints, investigation and enforcement, medical surveys and reports, and overhead reasonably incurred in the administration of this chapter and not otherwise recovered by the director under this chapter or from the Managed Care Fund. The amount may be paid in two equal installments. The first installment shall be paid on or before August 1 of each year, and the second installment shall be paid on or before December 15 of each year. (2) The amount paid by each plan shall be ten thousand dollars ($10,000) plus an amount up to, but not exceeding, an amount computed in accordance with paragraph (3). (3) (A) In addition to the amount specified in paragraph (2), all plans, except specialized plans, shall pay 65 percent of the total amount of the department’s costs and expenses for the ensuing fiscal year as estimated by the director. The amount per plan shall be calculated on a per enrollee basis as specified in paragraph (4). (B) In addition to the amount specified in paragraph (2), all specialized plans shall pay 35 percent of the total amount of the department’s costs and expenses for the ensuing fiscal year as estimated by the director. The amount per plan shall be calculated on a per enrollee basis as specified in paragraph (4). (4) The amount paid by each plan shall be for each enrollee enrolled in its plan in this state as of the preceding March 31, and shall be fixed by the director by notice to all licensed plans on or before June 15 of each year. A plan that is unable to report the number of enrollees enrolled in the plan because it does not collect that data, shall provide the director with an estimate of the number of enrollees enrolled in the plan and the method used for determining the estimate. The director may, upon giving written notice to the plan, revise the estimate if the director determines that the method used for determining the estimate was not reasonable. (5) In determining the amount assessed, the director shall consider all appropriations from the Managed Care Fund for the support of this chapter and all reimbursements provided for in this chapter. (c) Each licensed plan shall also pay two thousand dollars ($2,000), plus an amount up to, but not exceeding, forty-eight hundredths of one cent ($0.0048), for each enrollee for the purpose of reimbursing its share of all costs and expenses, including overhead, reasonably anticipated to be incurred by the department in administering Sections 1394.7 and 1394.8 during the current fiscal year. The amount charged shall be remitted within 30 days of the date of billing. (d) In no case shall the reimbursement, payment, or other fee authorized by this section exceed the cost, including overhead, reasonably incurred in the administration of this chapter. (e) For the purpose of calculating the assessment under this section, an enrollee who is enrolled in one plan and who receives health care services under arrangements made by another plan or plans, whether pursuant to a contract, agreement, or otherwise, shall be considered to be enrolled in each of the plans. (f) On and after January 1, 2009, no refunds or reductions of the amounts assessed shall be allowed if any miscalculated assessment is based on a plan’s overestimate of enrollment. (Amended by Stats. 2008, Ch. 607, Sec. 2. Effective September 30, 2008.)
  41. 1356.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    If the director finds the chapter’s charges and assessments are too high or too low for a year, next year’s charges and assessments must be adjusted pro rata to recover actual administration costs.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1356.1. Notwithstanding subdivision (f) of Section 1356, as amended by Section 2.5 of Chapter 722 of the Statutes of 1991, and subdivision (d) of Section 1356, as amended by Section 3 of Chapter 722 of the Statutes of 1991, if the director determines that the charges and assessments set forth in this chapter for any year are in excess of the amount necessary, or are insufficient, to meet the expenses of administration of this chapter, for that year, the assessments and charges for the following year shall be adjusted on a pro rata basis in accordance with the percentage of the excess or insufficiency as related to the actual charges and assessments for the year for which the excess or insufficiency occurred, in order to recover the actual costs of administration. (Amended by Stats. 1999, Ch. 525, Sec. 60. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  42. 1356.2.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

    Verify source ↗

    The director may require licensed health care service plans to pay an additional assessment, and the plans must pay it in full by December 1, 2010.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1356.2. The director, by notice to all licensed health care service plans on or before October 15, 2010, may require health care service plans to pay an additional assessment to provide the department with sufficient revenues to support costs and expenses of the department as set forth in subdivision (b) of Section 1341.4 and Section 1356 for the 2010–11 fiscal year. The assessment paid pursuant to this section shall be separate and independent of the assessment imposed pursuant to subdivision (b) of Section 1356 and shall not be aggregated with the assessment imposed pursuant to subdivision (b) of Section 1356 for the purposes of limitation or otherwise. The assessment paid pursuant to this section shall not be subject to the limitations imposed on assessments pursuant to Section 1356.1. In imposing an assessment pursuant to this section, the director shall levy on each health care service plan an amount determined by the director using the categories of plans in the schedules set forth in subdivision (b) of Section 1356. The assessments imposed pursuant to this section shall be paid in full by December 1, 2010. On and after July 1, 2011, and until August 31, 2015, the director may raise the assessment limit described in subdivision (b) of Section 1356 to incorporate the annual expenditure levels set forth in this section. (Added by Stats. 2010, Ch. 717, Sec. 11. (SB 853) Effective October 19, 2010.)
  43. 1356.3.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. )

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    Licensed health care service plans must pay an annual fee set by the department for fiscal years 2025–26 through 2026–27.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3. Licensing and Fees [1349 - 1356.3] ( Article 3 added by Stats. 1975, Ch. 941. ) ## 1356.3. (a) For the 2025–26 to 2026–27 fiscal years, inclusive, a health care service plan licensed by the department shall be assessed an annual fee in an amount determined by the department, in consultation with the Department of Health Care Access and Information. The annual fee shall be limited to the amount necessary to fund the actual and reasonably necessary expenses of the department to implement Article 6.1 (commencing with Section 1385.001) and the actual and reasonably necessary expenses of the Department of Health Care Access and Information pertaining to data reporting by pharmacy benefit managers, including that portion of the Health Care Payments Data Program established by Section 127671.1 that concerns pharmacy benefit managers. (b) The fees received pursuant to this section shall be transferred from the Managed Care Fund to the Pharmacy Benefit Manager Fund established by Section 1385.0017 and disbursed pursuant to that section, upon appropriation by the Legislature. (Added by Stats. 2025, Ch. 21, Sec. 7. (AB 116) Effective June 30, 2025.)
  44. 1357.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    This section mainly defines terms used for small employer health care service plans and related enrollment and rating rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357. As used in this article: (a) “Dependent” means the spouse or child of an eligible employee, subject to applicable terms of the health care plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (o). (b) “Eligible employee” means either of the following: (1) Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of at least 30 hours, at the small employer’s regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term does not include sole proprietors or the spouses of those sole proprietors, partners of a partnership or the spouses of those partners, or employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association are eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are eligible employees if all four of the following apply: (A) They otherwise meet the definition of an eligible employee except for the number of hours worked. (B) The employer offers the employees health coverage under a health benefit plan. (C) All similarly situated individuals are offered coverage under the health benefit plan. (D) The employee shall have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings. (2) Any member of a guaranteed association as defined in subdivision (o). (c) “In force business” means an existing health benefit plan contract issued by the plan to a small employer. (d) “Late enrollee” means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan and who subsequently requests enrollment in a health benefit plan of that small employer, provided that the initial enrollment period shall be a period of at least 30 days. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed association’s plan contract and who subsequently requests enrollment in the plan, provided that the initial enrollment period shall be a period of at least 30 days. However, an eligible employee, any other person eligible for coverage through a guaranteed association pursuant to subdivision (o), or an eligible dependent shall not be considered a late enrollee if any of the following is applicable: (1) The individual meets all of the following requirements: (A) He or she was covered under another employer health benefit plan, the Healthy Families Program, the Access for Infants and Mothers (AIM) Program, or the Medi-Cal program at the time the individual was eligible to enroll. (B) He or she certified at the time of the initial enrollment that coverage under another employer health benefit plan, the Healthy Families Program, the AIM Program, or the Medi-Cal program was the reason for declining enrollment, provided that, if the individual was covered under another employer health plan, the individual was given the opportunity to make the certification required by this subdivision and was notified that failure to do so could result in later treatment as a late enrollee. (C) He or she has lost or will lose coverage under another employer health benefit plan as a result of termination of employment of the individual or of a person through whom the individual was covered as a dependent, change in employment status of the individual or of a person through whom the individual was covered as a dependent, termination of the other plan’s coverage, cessation of an employer’s contribution toward an employee or dependent’s coverage, death of the person through whom the individual was covered as a dependent, legal separation, or divorce; or he or she has lost or will lose coverage under the Healthy Families Program, the AIM Program, or the Medi-Cal program. (D) He or she requests enrollment within 30 days after termination of coverage or employer contribution toward coverage provided under another employer health benefit plan, or requests enrollment within 60 days after termination of Medi-Cal program coverage, AIM Program coverage, or Healthy Families Program coverage. (2) The employer offers multiple health benefit plans and the employee elects a different plan during an open enrollment period. (3) A court has ordered that coverage be provided for a spouse or minor child under a covered employee’s health benefit plan. (4) (A) In the case of an eligible employee, as defined in paragraph (1) of subdivision (b), the plan cannot produce a written statement from the employer stating that the individual or the person through whom the individual was eligible to be covered as a dependent, prior to declining coverage, was provided with, and signed, acknowledgment of an explicit written notice in boldface type specifying that failure to elect coverage during the initial enrollment period permits the plan to impose, at the time of the individual’s later decision to elect coverage, an exclusion from coverage for a period of 12 months as well as a six-month preexisting condition exclusion, unless the individual meets the criteria specified in paragraph (1), (2), or (3). (B) In the case of an association member who did not purchase coverage through a guaranteed association, the plan cannot produce a written statement from the association stating that the association sent a written notice in boldface type to all potentially eligible association members at their last known address prior to the initial enrollment period informing members that failure to elect coverage during the initial enrollment period permits the plan to impose, at the time of the member’s later decision to elect coverage, an exclusion from coverage for a period of 12 months as well as a six-month preexisting condition exclusion unless the member can demonstrate that he or she meets the requirements of subparagraphs (A), (C), and (D) of paragraph (1) or meets the requirements of paragraph (2) or (3). (C) In the case of an employer or person who is not a member of an association, was eligible to purchase coverage through a guaranteed association, and did not do so, and would not be eligible to purchase guaranteed coverage unless purchased through a guaranteed association, the employer or person can demonstrate that he or she meets the requirements of subparagraphs (A), (C), and (D) of paragraph (1), or meets the requirements of paragraph (2) or (3), or that he or she recently had a change in status that would make him or her eligible and that application for enrollment was made within 30 days of the change. (5) The individual is an employee or dependent who meets the criteria described in paragraph (1) and was under a COBRA continuation provision and the coverage under that provision has been exhausted. For purposes of this section, the definition of “COBRA” set forth in subdivision (e) of Section 1373.621 shall apply. (6) The individual is a dependent of an enrolled eligible employee who has lost or will lose his or her coverage under the Healthy Families Program, the AIM Program, or the Medi-Cal program and requests enrollment within 60 days after termination of that coverage. (7) The individual is an eligible employee who previously declined coverage under an employer health benefit plan and who has subsequently acquired a dependent who would be eligible for coverage as a dependent of the employee through marriage, birth, adoption, or placement for adoption, and who enrolls for coverage under that employer health benefit plan on his or her behalf and on behalf of his or her dependent within 30 days following the date of marriage, birth, adoption, or placement for adoption, in which case the effective date of coverage shall be the first day of the month following the date the completed request for enrollment is received in the case of marriage, or the date of birth, or the date of adoption or placement for adoption, whichever applies. Notice of the special enrollment rights contained in this paragraph shall be provided by the employer to an employee at or before the time the employee is offered an opportunity to enroll in plan coverage. (8) The individual is an eligible employee who has declined coverage for himself or herself or his or her dependents during a previous enrollment period because his or her dependents were covered by another employer health benefit plan at the time of the previous enrollment period. That individual may enroll himself or herself or his or her dependents for plan coverage during a special open enrollment opportunity if his or her dependents have lost or will lose coverage under that other employer health benefit plan. The special open enrollment opportunity shall be requested by the employee not more than 30 days after the date that the other health coverage is exhausted or terminated. Upon enrollment, coverage shall be effective not later than the first day of the first calendar month beginning after the date the request for enrollment is received. Notice of the special enrollment rights contained in this paragraph shall be provided by the employer to an employee at or before the time the employee is offered an opportunity to enroll in plan coverage. (e) “New business” means a health care service plan contract issued to a small employer that is not the plan’s in force business. (f) “Preexisting condition provision” means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the employee’s effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. (g) “Creditable coverage” means: (1) Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers’ compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (2) The Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.). (3) The Medicaid program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.). (4) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (5) Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)). (6) A medical care program of the Indian Health Service or of a tribal organization. (7) A state health benefits risk pool. (8) A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)). (9) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996. (10) A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)). (11) Any other creditable coverage as defined by subdivision (c) of Section 2701 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)). (h) “Rating period” means the period for which premium rates established by a plan are in effect and shall be no less than six months. (i) “Risk adjusted employee risk rate” means the rate determined for an eligible employee of a small employer in a particular risk category after applying the risk adjustment factor. (j) “Risk adjustment factor” means the percentage adjustment to be applied equally to each standard employee risk rate for a particular small employer, based upon any expected deviations from standard cost of services. The factor may not be more than 110 percent or less than 90 percent. (k) “Risk category” means the following characteristics of an eligible employee: age, geographic region, and family composition of the employee, plus the health benefit plan selected by the small employer. (1) No more than the following age categories may be used in determining premium rates: Under 30 30–39 40–49 50–54 55–59 60–64 65 and over. However, for the 65 years of age and over category, separate premium rates may be specified depending upon whether coverage under the plan contract will be primary or secondary to benefits provided by the Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.). (2) Small employer health care service plans shall base rates to small employers using no more than the following family size categories: (A) Single. (B) Married couple. (C) One adult and child or children. (D) Married couple and child or children. (3) (A) In determining rates for small employers, a plan that operates statewide shall use no more than nine geographic regions in the state, have no region smaller than an area in which the first three digits of all its ZIP Codes are in common within a county, and divide no county into more than two regions. Plans shall be deemed to be operating statewide if their coverage area includes 90 percent or more of the state’s population. Geographic regions established pursuant to this section shall, as a group, cover the entire state, and the area encompassed in a geographic region shall be separate and distinct from areas encompassed in other geographic regions. Geographic regions may be noncontiguous. (B) (i) In determining rates for small employers, a plan that does not operate statewide shall use no more than the number of geographic regions in the state that is determined by the following formula: the population, as determined in the last federal census, of all counties that are included in their entirety in a plan’s service area divided by the total population of the state, as determined in the last federal census, multiplied by nine. The resulting number shall be rounded to the nearest whole integer. No region may be smaller than an area in which the first three digits of all its ZIP Codes are in common within a county and no county may be divided into more than two regions. The area encompassed in a geographic region shall be separate and distinct from areas encompassed in other geographic regions. Geographic regions may be noncontiguous. A plan shall not have less than one geographic area. (ii) If the formula in clause (i) results in a plan that operates in more than one county having only one geographic region, then the formula in clause (i) shall not apply and the plan may have two geographic regions, provided that no county is divided into more than one region. This section does not require a plan to establish a new service area or to offer health coverage on a statewide basis, outside of the plan’s existing service area. (l) “Small employer” means either of the following: (1) Any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least two, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. However, for purposes of subdivisions (a), (b), and (c) of Section 1357.03, the definition shall include employers with at least two eligible employees. In determining the number of eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this paragraph who purchases coverage through a guaranteed association, any employer purchasing coverage for employees through a guaranteed association, and any small employer as defined in this paragraph who purchases coverage through any arrangement. (2) Any guaranteed association, as defined in subdivision (n), that purchases health coverage for members of the association. (m) “Standard employee risk rate” means the rate applicable to an eligible employee in a particular risk category in a small employer group. (n) “Guaranteed association” means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in paragraph (1) of subdivision (l), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate. This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members. For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision. (o) “Members of a guaranteed association” means any individual or employer meeting the association’s membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the association’s discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months. (p) “Affiliation period” means a period that, under the terms of the health care service plan contract, is required to elapse before health care services under the contract become effective. (Amended by Stats. 2018, Ch. 700, Sec. 1. (SB 1375) Effective January 1, 2019.)
  45. 1357.01.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    Health care service plans offering contracts to small employer groups must comply with this article, in addition to this chapter and its rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.01. Every health care service plan offering plan contracts to small employer groups shall in addition to complying with the provisions of this chapter and the rules adopted thereunder comply with the provisions of this article. (Added by Stats. 1992, Ch. 1128, Sec. 5. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  46. 1357.02.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    A health care service plan for small employers is covered by this article if certain premium-payment or tax-treatment conditions are met, but several contract types are excluded.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.02. (a) A health care service plan providing or arranging for the provision of basic health care services to small employers shall be subject to this article if either of the following conditions are met: (1) Any portion of the premium is paid by a small employer, or any covered individual is reimbursed, whether through wage adjustments or otherwise, by a small employer for any portion of the premium. (2) The plan contract is treated by the small employer or any of the covered individuals as part of a plan or program for the purposes of Section 106 or 162 of the Internal Revenue Code. (b) This article shall not apply to health plan contracts for coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement, Medi-Cal contracts with the State Department of Health Services, long-term care coverage, or specialized health plan contracts. (Amended by Stats. 1993, Ch. 1146, Sec. 1.2. Effective October 11, 1993.)
  47. 1357.025.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    This section says the article should not be read to stop this chapter from applying to certain associations, trusts, organizations, or persons involved with health care service plans.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.025. Nothing in this article shall be construed to preclude the application of this chapter to either of the following: (a) An association, trust, or other organization acting as a “health care service plan” as defined under Section 1345. (b) An association, trust, or other organization or person presenting information regarding a health care service plan to persons who may be interested in subscribing or enrolling in the plan. (Added by Stats. 1993, Ch. 1146, Sec. 1.4. Effective October 11, 1993.)
  48. 1357.03.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    Health care service plans must offer and sell qualifying small-employer contracts fairly, avoid steering or discriminating against small employers, and file participation and contribution requirements with the director.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.03. (a) (1) Upon the effective date of this article, a plan shall fairly and affirmatively offer, market, and sell all of the plan’s health care service plan contracts that are sold to small employers or to associations that include small employers to all small employers in each service area in which the plan provides or arranges for the provision of health care services. (2) Each plan shall make available to each small employer all small employer health care service plan contracts that the plan offers and sells to small employers or to associations that include small employers in this state. (3) No plan or solicitor shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health care service plan contract that is provided in connection with the employee’s employment or membership in a guaranteed association. (4) A plan contracting to participate in the voluntary purchasing pool for small employers provided for under Article 4 (commencing with Section 10730) of Chapter 8 of Part 2 of Division 2 of the Insurance Code shall be deemed in compliance with the requirements of paragraph (1) for a contract offered through the voluntary purchasing pool established under Article 4 (commencing with Section 10730) of Chapter 8 of Part 2 of Division 2 of the Insurance Code in those geographic regions in which plans participate in the pool, if the contract is offered exclusively through the pool. (5) (A) A plan shall be deemed to meet the requirements of paragraphs (1) and (2) with respect to a plan contract that qualifies as a grandfathered health plan under Section 1251 of PPACA if all of the following requirements are met: (i) The plan offers to renew the plan contract, unless the plan withdraws the plan contract from the small employer market pursuant to subdivision (e) of Section 1357.11. (ii) The plan provides appropriate notice of the grandfathered status of the contract in any materials provided to an enrollee of the contract describing the benefits provided under the contract, as required under PPACA. (iii) The plan makes no changes to the benefits covered under the plan contract other than those required by a state or federal law, regulation, rule, or guidance and those permitted to be made to a grandfathered health plan under PPACA. (B) For purposes of this paragraph, “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. For purposes of this paragraph, a “grandfathered health plan” shall have the meaning set forth in Section 1251 of PPACA. (b) Every plan shall file with the director the reasonable employee participation requirements and employer contribution requirements that will be applied in offering its plan contracts. Participation requirements shall be applied uniformly among all small employer groups, except that a plan may vary application of minimum employee participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employee’s premium. Employer contribution requirements shall not vary by employer size. A health care service plan shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in subdivision (a) of Section 1357 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and (2) allows a plan to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer. Members of an association eligible for health coverage under subdivision (o) of Section 1357, but not electing any health coverage through the association, shall not be counted as eligible employees for purposes of determining whether the guaranteed association meets a plan’s reasonable participation standards. (c) The plan shall not reject an application from a small employer for a health care service plan contract if all of the following are met: (1) The small employer, as defined by paragraph (1) of subdivision (l) of Section 1357, offers health benefits to 100 percent of its eligible employees, as defined by paragraph (1) of subdivision (b) of Section 1357. Employees who waive coverage on the grounds that they have other group coverage shall not be counted as eligible employees. (2) The small employer agrees to make the required premium payments. (3) The small employer agrees to inform the small employers’ employees of the availability of coverage and the provision that those not electing coverage must wait one year to obtain coverage through the group if they later decide they would like to have coverage. (4) The employees and their dependents who are to be covered by the plan contract work or reside in the service area in which the plan provides or otherwise arranges for the provision of health care services. (d) No plan or solicitor shall, directly or indirectly, engage in the following activities: (1) Encourage or direct small employers to refrain from filing an application for coverage with a plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plan’s approved service area. (2) Encourage or direct small employers to seek coverage from another plan or the voluntary purchasing pool established under Article 4 (commencing with Section 10730) of Chapter 8 of Part 2 of Division 2 of the Insurance Code because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plan’s approved service area. (e) A plan shall not, directly or indirectly, enter into any contract, agreement, or arrangement with a solicitor that provides for or results in the compensation paid to a solicitor for the sale of a health care service plan contract to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer. This subdivision does not apply to a compensation arrangement that provides compensation to a solicitor on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer. (f) A policy or contract that covers two or more employees shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related factors: (1) Health status. (2) Medical condition, including physical and mental illnesses. (3) Claims experience. (4) Receipt of health care. (5) Medical history. (6) Genetic information. (7) Evidence of insurability, including conditions arising out of acts of domestic violence. (8) Disability. (g) A plan shall comply with the requirements of Section 1374.3. (Amended by Stats. 2010, Ch. 661, Sec. 1. (SB 1163) Effective January 1, 2011.)
  49. 1357.035.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    Certain qualifying associations may buy small employer health coverage for a limited period, and covered plans must give notice of those rights by specified deadlines.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.035. (a) Between July 26, 1993, and October 24, 1993, as well as 60 days prior to the expiration of an existing plan contract that expires prior to July 1, 1994, or, for plan contracts expiring after July 1, 1994, 60 days prior to July 1, 1994, an association that meets the definition of guaranteed association, as set forth in Section 1357, except for the requirement that 1,000 persons be covered, shall be entitled to purchase small employer health coverage as if the association were a guaranteed association, except that the coverage shall be guaranteed only for those members of an association, as defined in Section 1357, (1) who were receiving coverage or had successfully applied for coverage through the association as of June 30, 1993, (2) who were receiving coverage through the association as of December 31, 1992, and whose coverage lapsed at any time thereafter because the employment through which coverage was received ended or an employer’s contribution to health coverage ended, or (3) who were covered at any time between June 30, 1993, and July 1, 1994, under a contract that was in force on June 30, 1993. (b) An association obtaining health coverage for its members pursuant to this section shall otherwise be afforded all the rights of a guaranteed association under this chapter including, but not limited to, guaranteed renewability of coverage. (c) No later than August 25, 1993, plans that, at any time during the 1993 calendar year have provided coverage to associations that would be eligible for coverage under this section shall notify those associations of their rights under this section. Ninety days prior to the expiration of a plan contract that expires prior to July 1, 1994, or, for plan contracts expiring after July 1, 1994, 90 days prior to July 1, 1994, health plans that have in force coverage with an association that would be eligible for coverage under this section shall notify the association of its rights under this section. (Amended by Stats. 1993, Ch. 1146, Sec. 2.5. Effective October 11, 1993.)
  50. 1357.04.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    The plan must notify a small employer of actual premium charges within 30 days after a completed application is submitted, and the employer has 30 days to buy coverage at that quoted premium.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.04. (a) After a small employer submits a completed application form for a plan contract, the plan shall, within 30 days, notify the employer of the employer’s actual premium charges for that plan contract established in accordance with Section 1357.12. The employer shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges. (b) When a small employer submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan contract shall become effective no later than the first day of the following month. When that payment is neither delivered nor postmarked until after the 15th day of a month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment. (c) During the first 30 days after the effective date of the plan contract, the small employer shall have the option of changing coverage to a different plan contract offered by the same health care service plan. If a small employer notifies the plan of the change within the first 15 days of a month, coverage under the new plan contract shall become effective no later than the first day of the following month. If a small employer notifies the plan of the change after the 15th day of a month, coverage under the new plan contract shall become effective no later than the first day of the second month following notification. (Amended by Stats. 1993, Ch. 113, Sec. 2.5. Effective July 13, 1993.)
  51. 1357.05.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    A health plan generally may not exclude eligible employees or dependents because of a health condition, and plan contracts may not limit or exclude coverage by type of illness, treatment, medical condition, or accident, with stated preexisting-condition exceptions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.05. Except in the case of a late enrollee, or for satisfaction of a preexisting condition clause in the case of initial coverage of an eligible employee, a plan may not exclude any eligible employee or dependent who would otherwise be entitled to health care services on the basis of an actual or expected health condition of that employee or dependent. No plan contract may limit or exclude coverage for a specific eligible employee or dependent by type of illness, treatment, medical condition, or accident, except for preexisting conditions as permitted by Section 1357.06. (Amended by Stats. 1995, Ch. 668, Sec. 2. Effective January 1, 1996.)
  52. 1357.06.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    Health plans and plan contracts are limited in how they use preexisting condition exclusions and waiting periods, and they cannot charge premiums during a waiting period.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.06. (a) (1) Preexisting condition provisions of a plan contract shall not exclude coverage for a period beyond six months following the individual’s effective date of coverage and may only relate to conditions for which medical advice, diagnosis, care, or treatment, including prescription drugs, was recommended or received from a licensed health practitioner during the six months immediately preceding the effective date of coverage. (2) Notwithstanding paragraph (1), a plan contract offered to a small employer shall not impose any preexisting condition provision upon any child under 19 years of age. (b) A plan that does not utilize a preexisting condition provision may impose a waiting or affiliation period, not to exceed 60 days, before the coverage issued subject to this article shall become effective. During the waiting or affiliation period no premiums shall be charged to the enrollee or the subscriber. (c) In determining whether a preexisting condition provision or a waiting or affiliation period applies to any person, a plan shall credit the time the person was covered under creditable coverage, provided the person becomes eligible for coverage under the succeeding plan contract within 62 days of termination of prior coverage, exclusive of any waiting or affiliation period, and applies for coverage with the succeeding plan contract within the applicable enrollment period. A plan shall also credit any time an eligible employee must wait before enrolling in the plan, including any affiliation or employer-imposed waiting or affiliation period. However, if a person’s employment has ended, the availability of health coverage offered through employment or sponsored by an employer has terminated, or an employer’s contribution toward health coverage has terminated, a plan shall credit the time the person was covered under creditable coverage if the person becomes eligible for health coverage offered through employment or sponsored by an employer within 180 days, exclusive of any waiting or affiliation period, and applies for coverage under the succeeding plan contract within the applicable enrollment period. (d) In addition to the preexisting condition exclusions authorized by subdivision (a) and the waiting or affiliation period authorized by subdivision (b), health plans providing coverage to a guaranteed association may impose on employers or individuals purchasing coverage who would not be eligible for guaranteed coverage if they were not purchasing through the association a waiting or affiliation period, not to exceed 60 days, before the coverage issued subject to this article shall become effective. During the waiting or affiliation period, no premiums shall be charged to the enrollee or the subscriber. (e) An individual’s period of creditable coverage shall be certified pursuant to subdivision (e) of Section 2701 of Title XXVII of the federal Public Health Services Act (42 U.S.C. Sec. 300gg(e)). (f) A health care service plan issuing group coverage may not impose a preexisting condition exclusion to a condition relating to benefits for pregnancy or maternity care. (Amended by Stats. 2010, Ch. 656, Sec. 1. (AB 2244) Effective January 1, 2011.)
  53. 1357.07.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    A health plan contract may not exclude late enrollees from coverage for more than 12 months after their application, and no premium may be charged until that exclusion period ends.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.07. No plan contract may exclude late enrollees from coverage for more than 12 months from the date of the late enrollees application for coverage. No premium shall be charged to the late enrollee until the exclusion period has ended. (Added by Stats. 1992, Ch. 1128, Sec. 5. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  54. 1357.08.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    Health care service plan contracts offered to a small employer must provide subscribers and enrollees at least the basic health care services listed in the cited section and regulation.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.08. All health care service plan contracts offered to a small employer shall provide to subscribers and enrollees at least all of the basic health care services included in subdivision (b) of Section 1345, and in Section 1300.67 of the California Code of Regulations. (Added by Stats. 1992, Ch. 1128, Sec. 5. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  55. 1357.09.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    A health care service plan is exempt from certain small-employer offer requirements in listed situations, and the director must act on a certification within 45 days.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.09. No plan shall be required to offer a health care service plan contract or accept applications for the contract pursuant to this article in the case of any of the following: (a) To a small employer, if the small employer is not physically located in a plan’s approved service areas, or if an eligible employee and dependents who are to be covered by the plan contract do not work or reside within a plan’s approved service areas. (b) (1) Within a specific service area or portion of a service area, if a plan reasonably anticipates and demonstrates to the satisfaction of the director that it will not have sufficient health care delivery resources to assure that health care services will be available and accessible to the eligible employee and dependents of the employee because of its obligations to existing enrollees. (2) A plan that cannot offer a health care service plan contract to small employers because it is lacking in sufficient health care delivery resources within a service area or a portion of a service area may not offer a contract in the area in which the plan is not offering coverage to small employers to new employer groups with more than 50 eligible employees until the plan notifies the director that it has the ability to deliver services to small employer groups, and certifies to the director that from the date of the notice it will enroll all small employer groups requesting coverage in that area from the plan unless the plan has met the requirements of subdivision (d). (3) Nothing in this article shall be construed to limit the director’s authority to develop and implement a plan of rehabilitation for a health care service plan whose financial viability or organizational and administrative capacity has become impaired. (c) Offer coverage to a small employer or an eligible employee as defined under paragraph (2) of subdivision (b) of Section 1357 that, within 12 months of application for coverage, disenrolled from a plan contract offered by the plan. (d) (1) The director approves the plan’s certification that the number of eligible employees and dependents enrolled under contracts issued during the current calendar year equals or exceeds either of the following: (A) In the case of a plan that administers any self-funded health coverage arrangements in California, 10 percent of the total enrollment of the plan in California as of December 31 of the preceding year. (B) In the case of a plan that does not administer any self-funded health coverage arrangements in California, 8 percent of the total enrollment of the plan in California as of December 31 of the preceding year. If that certification is approved, the plan shall not offer any health care service plan contract to any small employers during the remainder of the current year. (2) If a health care service plan treats an affiliate or subsidiary as a separate carrier for the purpose of this article because one health care service plan is qualified under the federal Health Maintenance Organization Act (42 U.S.C. Sec. 300e et seq.) and does not offer coverage to small employers, while the affiliate or subsidiary offers a plan contract that is not qualified under the federal Health Maintenance Organization Act (42 U.S.C. Sec. 300e et seq.) and offers plan contracts to small employers, the health care service plan offering coverage to small employers shall enroll new eligible employees and dependents, equal to the applicable percentage of the total enrollment of both the health care service plan qualified under the federal Health Maintenance Organization Act (42 U.S.C. Sec. 300e et seq.) and its affiliate or subsidiary. (3) (A) The certified statement filed pursuant to this subdivision shall state the following: (i) Whether the plan administers any self-funded health coverage arrangements in California. (ii) The plan’s total enrollment as of December 31 of the preceding year. (iii) The number of eligible employees and dependents enrolled under contracts issued to small employer groups during the current calendar year. (B) The director shall, within 45 days, approve or disapprove the certified statement. If the certified statement is disapproved, the plan shall continue to issue coverage as required by Section 1357.03 and be subject to disciplinary action as set forth in Article 7 (commencing with Section 1386). (e) A health care service plan that, as of December 31 of the prior year, had a total enrollment of fewer than 100,000 and 50 percent or more of the plan’s total enrollment have premiums paid by the Medi-Cal program. (f) A social health maintenance organization, as described in subdivision (a) of Section 2355 of the federal Deficit Reduction Act of 1984 (P.L. 98-369), that, as of December 31 of the prior year, had a total enrollment of fewer than 100,000 and has 50 percent or more of the organization’s total enrollment premiums paid by the Medi-Cal program or Medicare programs, or by a combination of Medi-Cal and Medicare. In no event shall this exemption be based upon enrollment in Medicare supplement contracts, as described in Article 3.5 (commencing with Section 1358). (Amended by Stats. 2006, Ch. 538, Sec. 353. Effective January 1, 2007.)
  56. 1357.10.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    The director may require a plan to stop offering contracts or accepting applications from small employers or groups with more than 50 employees if the director determines the plan lacks enough financial, organizational, or administrative capacity.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.10. The director may require a plan to discontinue the offering of contracts or acceptance of applications from any small employer or group with more than 50 employees upon a determination by the director that the plan does not have sufficient financial viability, or organizational and administrative capacity to assure the delivery of health care services to its enrollees. In determining whether the conditions of this section have been met, the director shall consider, but not be limited to, the plan’s compliance with the requirements of Section 1367, Article 6 (commencing with Section 1375), and the rules adopted thereunder. (Amended by Stats. 1999, Ch. 525, Sec. 63. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  57. 1357.12.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    Plans must price small-employer health care contracts using risk-adjusted employee risk rates, stay within stated percentage limits, and keep rates in effect for specified minimum periods.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.12. Premiums for contracts offered or delivered by plans on or after the effective date of this article shall be subject to the following requirements: (a) (1) The premium for new business shall be determined for an eligible employee in a particular risk category after applying a risk adjustment factor to the plan’s standard employee risk rates. The risk adjusted employee risk rate may not be more than 120 percent or less than 80 percent of the plan’s applicable standard employee risk rate until July 1, 1996. Effective July 1, 1996, this factor may not be more than 110 percent or less than 90 percent. (2) The premium charged a small employer for new business shall be equal to the sum of the risk adjusted employee risk rates. (3) The standard employee risk rates applied to a small employer for new business shall be in effect for no less than six months. (b) (1) The premium for in force business shall be determined for an eligible employee in a particular risk category after applying a risk adjustment factor to the plan’s standard employee risk rates. The risk adjusted employee risk rates may not be more than 120 percent or less than 80 percent of the plan’s applicable standard employee risk rate until July 1, 1996. Effective July 1, 1996, this factor may not be more than 110 percent or less than 90 percent. The factor effective July 1, 1996, shall apply to in force business at the earlier of either the time of renewal or July 1, 1997. The risk adjustment factor applied to a small employer may not increase by more than 10 percentage points from the risk adjustment factor applied in the prior rating period. The risk adjustment factor for a small employer may not be modified more frequently than every 12 months. (2) The premium charged a small employer for in force business shall be equal to the sum of the risk adjusted employee risk rates. The standard employee risk rates shall be in effect for no less than six months. (3) For a contract that a plan has discontinued offering, the risk adjustment factor applied to the standard employee risk rates for the first rating period of the new contract that the small employer elects to purchase shall be no greater than the risk adjustment factor applied in the prior rating period to the discontinued contract. However, the risk adjusted employee risk rate may not be more than 120 percent or less than 80 percent of the plan’s applicable standard employee risk rate until July 1, 1996. Effective July 1, 1996, this factor may not be more than 110 percent or less than 90 percent. The factor effective July 1, 1996, shall apply to in force business at the earlier of either the time of renewal or July 1, 1997. The risk adjustment factor for a small employer may not be modified more frequently than every 12 months. (c) (1) For any small employer, a plan may, with the consent of the small employer, establish composite employee and dependent rates for either new business or renewal of in force business. The composite rates shall be determined as the average of the risk adjusted employee risk rates for the small employer, as determined in accordance with the requirements of subdivisions (a) and (b). The sum of the composite rates so determined shall be equal to the sum of the risk adjusted employee risk rates for the small employer. (2) The composite rates shall be used for all employees and dependents covered throughout a rating period of no less than six months nor more than 12 months, except that a plan may reserve the right to redetermine the composite rates if the enrollment under the contract changes by more than a specified percentage during the rating period. Any redetermination of the composite rates shall be based on the same risk adjusted employee risk rates used to determine the initial composite rates for the rating period. If a plan reserves the right to redetermine the rates and the enrollment changes more than the specified percentage, the plan shall redetermine the composite rates if the redetermined rates would result in a lower premium for the small employer. A plan reserving the right to redetermine the composite rates based upon a change in enrollment shall use the same specified percentage to measure that change with respect to all small employers electing composite rates. (Amended by Stats. 1996, Ch. 50, Sec. 1. Effective May 24, 1996.)
  58. 1357.13.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    Health care service plans must apply standard employee risk rates consistently for all small employers.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.13. Plans shall apply standard employee risk rates consistently with respect to all small employers. (Added by Stats. 1992, Ch. 1128, Sec. 5. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  59. 1357.14.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

    Verify source ↗

    Plans selling to small employers must give required disclosures, brochures, and rate information, and solicitors must give specified notices before an application is filed.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.14. In connection with the offering for sale of any plan contract to a small employer, each plan shall make a reasonable disclosure, as part of its solicitation and sales materials, of the following: (a) The extent to which premium rates for a specified small employer are established or adjusted in part based upon the actual or expected variation in service costs or actual or expected variation in health condition of the employees and dependents of the small employer. (b) The provisions concerning the plan’s right to change premium rates and the factors other than provision of services experience that affect changes in premium rates. (c) Provisions relating to the guaranteed issue and renewal of contracts. (d) Provisions relating to the effect of any preexisting condition provision. (e) Provisions relating to the small employer’s right to apply for any contract written, issued, or administered by the plan at the time of application for a new health care service plan contract, or at the time of renewal of a health care service plan contract. (f) The availability, upon request, of a listing of all the plan’s contracts and benefit plan designs offered to small employers, including the rates for each contract. (g) At the time it offers a contract to a small employer, each plan shall provide the small employer with a statement of all of its plan contracts offered to small employers, including the rates for each plan contract, in the service area in which the employer’s employees and eligible dependents who are to be covered by the plan contract work or reside. For purposes of this subdivision, plans that are affiliated plans or that are eligible to file a consolidated income tax return shall be treated as one health plan. (h) Each plan shall do all of the following: (1) Prepare a brochure that summarizes all of its plan contracts offered to small employers and to make this summary available to any small employer and to solicitors upon request. The summary shall include for each contract information on benefits provided, a generic description of the manner in which services are provided, such as how access to providers is limited, benefit limitations, required copayments and deductibles, standard employee risk rates, an explanation of the manner in which creditable coverage is calculated if a preexisting condition or affiliation period is imposed, and a phone number that can be called for more detailed benefit information. Plans are required to keep the information contained in the brochure accurate and up to date and, upon updating the brochure, send copies to solicitors and solicitor firms with whom the plan contracts to solicit enrollments or subscriptions. (2) For each contract, prepare a more detailed evidence of coverage and make it available to small employers, solicitors, and solicitor firms upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making contract selections. (3) Provide to small employers and solicitors, upon request, for any given small employer the sum of the standard employee risk rates and the sum of the risk adjusted employee risk rates. When requesting this information, small employers, solicitors, and solicitor firms shall provide the plan with the information the plan needs to determine the small employer’s risk adjusted employee risk rate. (4) Provide copies of the current summary brochure to all solicitors and solicitor firms contracting with the plan to solicit enrollments or subscriptions from small employers. For purposes of this subdivision, plans that are affiliated plans or that are eligible to file a consolidated income tax return shall be treated as one health plan. (i) Every solicitor or solicitor firm contracting with one or more plans to solicit enrollments or subscriptions from small employers shall do all of the following: (1) When providing information on contracts to a small employer but making no specific recommendations on particular plan contracts: (A) Advise the small employer of the plan’s obligation to sell to any small employer any plan contract it offers to small employers and provide them, upon request, with the actual rates that would be charged to that employer for a given contract. (B) Notify the small employer that the solicitor or solicitor firm will procure rate and benefit information for the small employer on any plan contract offered by a plan whose contract the solicitor sells. (C) Notify the small employer that upon request the solicitor or solicitor firm will provide the small employer with the summary brochure required under paragraph (1) of subdivision (h) for any plan contract offered by a plan with whom the solicitor or solicitor firm has contracted with to solicit enrollments or subscriptions. (2) When recommending a particular benefit plan design or designs, advise the small employer that, upon request, the agent will provide the small employer with the brochure required by paragraph (1) of subdivision (h) containing the benefit plan design or designs being recommended by the agent or broker. (3) Prior to filing an application for a small employer for a particular contract: (A) For each of the plan contracts offered by the plan whose contract the solicitor or solicitor firm is offering, provide the small employer with the benefit summary required in paragraph (1) of subdivision (h) and the sum of the standard employee risk rates for that particular employer. (B) Notify the small employer that, upon request, the solicitor or solicitor firm will provide the small employer with an evidence of coverage brochure for each contract the plan offers. (C) Notify the small employer that, from July 1, 1993, to July 1, 1996, actual rates may be 20 percent higher or lower than the sum of the standard employee risk rates, and from July 1, 1996, and thereafter, actual rates may be 10 percent higher or lower than the sum of the standard employee risk rates, depending on how the plan assesses the risk of the small employer’s group. (D) Notify the small employer that, upon request, the solicitor or solicitor firm will submit information to the plan to ascertain the small employer’s sum of the risk adjusted employee risk rate for any contract the plan offers. (E) Obtain a signed statement from the small employer acknowledging that the small employer has received the disclosures required by this section. (Amended by Stats. 1997, Ch. 336, Sec. 5. Effective August 21, 1997.)
  60. 1357.15.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    Plans must file a notice of material modification with the director before renewing, amending, or offering covered plan contracts, and must include specified compliance and rate information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.15. (a) At least 20 business days prior to renewing or amending a plan contract subject to this article which will be in force on the operative date of this article, a plan shall file a notice of material modification with the director in accordance with the provisions of Section 1352. The notice of material modification shall include a statement certifying that the plan is in compliance with subdivision (j) of Section 1357 and Section 1357.12. The certified statement shall set forth the standard employee risk rate for each risk category and the highest and lowest risk adjustment factors that will be used in setting the rates at which the contract will be renewed or amended. Any action by the director, as permitted under Section 1352, to disapprove, suspend or postpone the plan’s use of a plan contract shall be in writing, specifying the reasons that the plan contract does not comply with the requirements of this chapter. (b) At least 20 business days prior to offering a plan contract subject to this article, all plans shall file a notice of material modification with the director in accordance with the provisions of Section 1352. The notice of material modification shall include a statement certifying that the plan is in compliance with subdivision (j) of Section 1357 and Section 1357.12. The certified statement shall set forth the standard employee risk rate for each risk category and the highest and lowest risk adjustment factors that will be used in setting the rates at which the contract will be offered. Plans that will be offering to a small employer plan contracts approved by the director prior to the effective date of this article shall file a notice of material modification in accordance with this subdivision. Any action by the director, as permitted under Section 1352, to disapprove, suspend or postpone the plan’s use of a plan contract shall be in writing, specifying the reasons that the plan contract does not comply with the requirements of this chapter. (c) Prior to making any changes in the risk categories, risk adjustment factors or standard employee risk rates filed with the director pursuant to subdivision (a) or (b), the plan shall file as an amendment a statement setting forth the changes and certifying that the plan is in compliance with subdivision (j) of Section 1357 and Section 1357.12. A plan may commence offering plan contracts utilizing the changed risk categories set forth in the certified statement on the 31st day from the date of the filing, or at an earlier time determined by the director, unless the director disapproves the amendment by written notice, stating the reasons therefor. If only the standard employee risk rate is being changed, and not the risk categories or risk adjustment factors, a plan may commence offering plan contracts utilizing the changed standard employee risk rate upon filing the certified statement unless the director disapproves the amendment by written notice. (d) Periodic changes to the standard employee risk rate that a plan proposes to implement over the course of up to 12 consecutive months may be filed in conjunction with the certified statement filed under subdivision (a), (b), or (c). (e) Each plan shall maintain at its principal place of business all of the information required to be filed with the director pursuant to this section. (f) Each plan shall make available to the director, on request, the risk adjustment factor used in determining the rate for any particular small employer. (g) Nothing in this section shall be construed to limit the director’s authority to enforce the rating practices set forth in this article. (Amended by Stats. 1999, Ch. 525, Sec. 65. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  61. 1357.16.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    Health care service plans may contract with qualified associations for administrative services, but they must use uniform definitions, give all contracted associations the same premium discounts, report discount schedules, and never use discounts to reduce premiums based on members’ health status.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.16. (a) Health care service plans may enter into contractual agreements with qualified associations, as defined in subdivision (b), under which these qualified associations may assume responsibility for performing specific administrative services, as defined in this section, for qualified association members. Health care service plans that enter into agreements with qualified associations for assumption of administrative services shall establish uniform definitions for the administrative services that may be provided by a qualified association or its third-party administrator. The health care service plan shall permit all qualified associations to assume one or more of these functions when the health care service plan determines the qualified association demonstrates the administrative capacity to assume these functions. For the purposes of this section, administrative services provided by qualified associations or their third-party administrators shall be services pertaining to eligibility determination, enrollment, premium collection, sales, or claims administration on a per-claim basis that would otherwise be provided directly by the health care service plan or through a third-party administrator on a commission basis or an agent or solicitor workforce on a commission basis. Each health care service plan that enters into an agreement with any qualified association for the provision of administrative services shall offer all qualified associations with which it contracts the same premium discounts for performing those services the health care service plan has permitted the qualified association or its third-party administrator to assume. The health care service plan shall apply these uniform discounts to the health care service plan’s risk adjusted employee risk rates after the health plan has determined the qualified association’s risk adjusted employee risk rates pursuant to Section 1357.12. The health care service plan shall report to the Department of Managed Health Care its schedule of discount for each administrative service. In no instance may a health care service plan provide discounts to qualified associations that are in any way intended to, or materially result in, a reduction in premium charges to the qualified association due to the health status of the membership of the qualified association. In addition to any other remedies available to the director to enforce this chapter, the director may declare a contract between a health care service plan and a qualified association for administrative services pursuant to this section null and void if the director determines any discounts provided to the qualified association are intended to, or materially result in, a reduction in premium charges to the qualified association due to the health status of the membership of the qualified association. (b) For the purposes of this section, a qualified association is a nonprofit corporation comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, that conforms to all of the following requirements: (1) It accepts for membership any individual or small employer meeting its membership criteria. (2) It does not condition membership directly or indirectly on the health or claims history of any person. (3) It uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association. (4) It is organized and maintained in good faith for purposes unrelated to insurance. (5) It existed on January 1, 1972, and has been in continuous existence since that date. (6) It has a constitution and bylaws or other analogous governing documents that provide for election of the governing board of the association by its members. (7) It offered, marketed, or sold health coverage to its members for 20 continuous years prior to January 1, 1993. (8) It agrees to offer only to association members any plan contract. (9) It agrees to include any member choosing to enroll in the plan contract offered by the association, provided that the member agrees to make required premium payments. (10) It complies with all provisions of this article. (11) It had at least 10,000 enrollees covered by association sponsored plans immediately prior to enactment of Chapter 1128 of the Statutes of 1992. (12) It applies any administrative cost at an equal rate to all members purchasing coverage through the qualified association. (c) A qualified association shall comply with Section 1357.52. (Amended by Stats. 2012, Ch. 728, Sec. 82. (SB 71) Effective January 1, 2013.)
  62. 1357.17.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    The director may issue regulations for this article, must give the Insurance Commissioner the proposed regulations before public comment, and the Commissioner has 30 days to send written comments that must be included in the public notice.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.17. The director may issue regulations that are necessary to carry out the purposes of this article. Prior to the public comment period required on the regulations under the Administrative Procedure Act, the director shall provide the Insurance Commissioner with a copy of the proposed regulations. The Insurance Commissioner shall have 30 days to notify the director in writing of any comments on the regulations. The Insurance Commissioner’s comments shall be included in the public notice issued on the regulations. Any rules and regulations adopted pursuant to this article 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). Until December 31, 1994, 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. (Amended by Stats. 1999, Ch. 525, Sec. 67. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  63. 1357.19.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. )

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    This section says Article 3.1 does not apply to health care service plan contracts covered by Article 3.16 or Article 3.17, unless those articles say otherwise.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.1. Small Employer Group Access to Contracts for Health Care Services [1357 - 1357.19] ( Article 3.1 added by Stats. 1992, Ch. 1128, Sec. 5. ) ## 1357.19. This article shall not apply to a health care service plan contract that is subject to Article 3.16 (commencing with Section 1357.500) or Article 3.17 (commencing with Section 1357.600), except as otherwise provided in those articles. (Added by Stats. 2012, Ch. 852, Sec. 2. (AB 1083) Effective January 1, 2013.)
  64. 1357.50.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. )

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    This section defines several health plan terms, including health benefit plan, preexisting condition provision, creditable coverage, affiliation period, waiting period, grandfathered and nongrandfathered health benefit plans, and PPACA.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. ) ## 1357.50. (a) For purposes of this article, the following definitions shall apply: (1) “Health benefit plan” means a health care service plan contract that provides medical, hospital, and surgical benefits. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or coverage under a specialized health care service plan contract. (2) “Preexisting condition provision” means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollee’s effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. (3) “Creditable coverage” means: (A) Any individual or group policy, contract, or program that is written or administered by a health insurer, nonprofit hospital service plan, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care insurance, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers’ compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (B) The Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.). (C) The Medicaid Program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.). (D) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (E) 10 U.S.C. Chapter 55 (commencing with Section 1071) (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)). (F) A medical care program of the Indian Health Service or of a tribal organization. (G) A health plan offered under 5 U.S.C. Chapter 89 (commencing with Section 8901) (Federal Employees Health Benefits Program (FEHBP)). (H) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the Public Health Service Act, as amended by Public Law 104-191, the Health Insurance Portability and Accountability Act of 1996. (I) A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. Sec. 2504(e)). (J) Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)). (4) “Waivered condition provision” means a contract provision that excludes coverage for charges or expenses incurred during a specified period of time for one or more specific, identified, medical conditions. (5) “Affiliation period” means a period that, under the terms of the health benefit plan, must expire before health care services under the plan become effective. (6) “Waiting period” means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the plan. (7) “Grandfathered health benefit plan” means a health benefit plan that is a grandfathered health plan, as defined in Section 1251 of PPACA. (8) “Nongrandfathered health benefit plan” means a health benefit plan that is not a grandfathered health plan as defined in Section 1251 of PPACA. (9) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued pursuant to that law. (Repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. (AB 1083) Effective January 1, 2013. Section operative January 1, 2014, pursuant to Section 1357.55.)
  65. 1357.500.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

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    This section defines key terms used for small employer health care service plans and says a health care service plan may not limit or exclude coverage for anyone because of a preexisting condition.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.500. As used in this article, the following definitions shall apply: (a) “Child” means a child described in Section 22775 of the Government Code and subdivisions (n) to (p), inclusive, of Section 599.500 of Title 2 of the California Code of Regulations. (b) “Dependent” means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health care service plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (m). (c) “Eligible employee” means either of the following: (1) Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, at the small employer’s regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term does not include sole proprietors or the spouses of those sole proprietors, partners of a partnership or the spouses of those partners, or employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association are eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are eligible employees if all four of the following apply: (A) They otherwise meet the definition of an eligible employee except for the number of hours worked. (B) The employer offers the employees health coverage under a health benefit plan. (C) All similarly situated individuals are offered coverage under the health benefit plan. (D) The employee shall have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings. (2) Any member of a guaranteed association as defined in subdivision (m). (d) “Exchange” means the California Health Benefit Exchange created by Section 100500 of the Government Code. (e) “In force business” means an existing health benefit plan contract issued by the plan to a small employer. (f) “Late enrollee” means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in a health benefit plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 1357.503. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed association’s plan contract consistent with the periods provided pursuant to Section 1357.503 and who subsequently requests enrollment in the plan, except where that member or person qualifies for a special enrollment period provided pursuant to Section 1357.503. (g) “New business” means a health care service plan contract issued to a small employer that is not the plan’s in force business. (h) “Preexisting condition provision” means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollee’s effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. No health care service plan shall limit or exclude coverage for any individual based on a preexisting condition whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date. (i) “Creditable coverage” means: (1) Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers’ compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (2) The Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.). (3) The Medicaid program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.). (4) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (5) Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)). (6) A medical care program of the Indian Health Service or of a tribal organization. (7) A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)). (8) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996. (9) A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)). (10) Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)). (j) “Rating period” means the period for which premium rates established by a plan are in effect and shall be no less than 12 months from the date of issuance or renewal of the plan contract. (k) (1) “Small employer” means any of the following: (A) For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of employees or eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this paragraph who purchases coverage through a guaranteed association, any employer purchasing coverage for employees through a guaranteed association, and any small employer as defined in this paragraph who purchases coverage through any arrangement. (B) Any guaranteed association, as defined in subdivision (l), that purchases health coverage for members of the association. (2) For plan years commencing on or after January 1, 2019, for purposes of determining whether an employer has one employee, sole proprietors and their spouses, and partners of a partnership and their spouses, are not employees. (3) For plan years commencing on or after January 1, 2016, the definition of small employer, for purposes of determining employer eligibility in the small employer market, shall be determined using the method for counting full-time employees and full-time equivalent employees set forth in Section 4980H(c)(2) of the Internal Revenue Code. (l) “Guaranteed association” means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate. This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members. For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision. (m) “Members of a guaranteed association” means any individual or employer meeting the association’s membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the association’s discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months. (n) “Affiliation period” means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective. (o) “Grandfathered health plan” has the meaning set forth in Section 1251 of PPACA. (p) “Nongrandfathered small employer health care service plan contract” means a small employer health care service plan contract that is not a grandfathered health plan. (q) “Plan year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. (r) “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. (s) “Small employer health care service plan contract” means a health care service plan contract issued to a small employer. (t) “Waiting period” means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the contract. (u) “Registered domestic partner” means a person who has established a domestic partnership as described in Section 297 of the Family Code. (v) “Family” means the subscriber and his or her dependent or dependents. (w) “Health benefit plan” means a health care service plan contract that provides medical, hospital, and surgical benefits for the covered eligible employees of a small employer and their dependents. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, or coverage under a specialized health care service plan contract. (Amended by Stats. 2018, Ch. 700, Sec. 2. (SB 1375) Effective January 1, 2019.)
  66. 1357.501.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    This article applies only to nongrandfathered small employer health care service plan contracts, and only for plan years beginning on or after January 1, 2014.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.501. This article shall apply only to nongrandfathered small employer health care service plan contracts and only with respect to plan years beginning on or after January 1, 2014. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  67. 1357.502.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    This section applies Article 3.16 to certain health care service plans serving small employers when the premium is partly paid by a small employer or the plan is treated as part of a tax-related plan or program.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.502. (a) A health care service plan providing or arranging for the provision of essential health benefits, as defined by the state pursuant to Section 1302 of PPACA, to small employers shall be subject to this article if either of the following conditions is met: (1) Any portion of the premium is paid by a small employer, or any covered individual is reimbursed, whether through wage adjustments or otherwise, by a small employer for any portion of the premium. (2) The plan contract is treated by the small employer or any of the covered individuals as part of a plan or program for the purposes of Section 106 or 162 of the Internal Revenue Code. (b) This article shall not apply to health care service plan contracts for coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement, Medi-Cal contracts with the State Department of Health Care Services, long-term care coverage, or specialized health care service plan contracts. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  68. 1357.502.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    This section says Article 3.16 does not stop the chapter from applying to certain associations, trusts, organizations, or persons connected to health care service plans.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.502.5. Nothing in this article shall be construed to preclude the application of this chapter to either of the following: (a) An association, trust, or other organization acting as a “health care service plan” as defined under Section 1345. (b) An association, trust, or other organization or person presenting information regarding a health care service plan to persons who may be interested in subscribing or enrolling in the plan. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  69. 1357.503.035.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    Some associations are entitled to buy small employer health coverage as if they were guaranteed associations, and covered associations get the rights of a guaranteed association.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.503.035. (a) For plan contracts subject to this article, an association that meets the definition of a guaranteed association, as set forth in Section 1357.500, except for the requirement that 1,000 persons be covered, shall be entitled to purchase small employer health coverage as if the association were a guaranteed association, except that the coverage shall be guaranteed only for those members of an association, as defined in subdivision (m) of Section 1357.500, (1) who were receiving coverage or had successfully applied for coverage through the association as of June 30, 1993, (2) who were receiving coverage through the association as of December 31, 1992, and whose coverage lapsed at any time thereafter because the employment through which coverage was received ended or an employer’s contribution to health coverage ended, or (3) who were covered at any time between June 30, 1993, and July 1, 1994, under a contract that was in force on June 30, 1993. (b) An association obtaining health coverage for its members pursuant to this section shall otherwise be afforded all the rights of a guaranteed association under this chapter, including, but not limited to, guaranteed renewability of coverage. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  70. 1357.504.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    For certain small employer health care service plan contracts, the plan must give premium-charge notice within 30 days after a completed application, and timing rules control when coverage starts.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.504. (a) With respect to small employer health care service plan contracts offered outside the Exchange, after a small employer submits a completed application form for a plan contract, the health care service plan shall, within 30 days, notify the employer of the employer’s actual premium charges for that plan contract established in accordance with Section 1357.512. The employer shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges. (b) Except as provided in subdivision (c), when a small employer submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of the month, coverage under the plan contract shall become effective no later than the first day of the following month. When that payment is neither delivered nor postmarked until after the 15th day of a month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment. (c) (1) With respect to a small employer health care service plan contract offered through the Exchange, a plan shall apply coverage effective dates consistent with those required under Section 155.720 of Title 45 of the Code of Federal Regulations and of subdivision (e) of Section 1399.849. (2) With respect to a small employer health care service plan contract offered outside the Exchange for which an individual applies during a special enrollment period described in subdivision (b) of Section 1357.503, the following provisions shall apply: (A) Coverage under the plan contract shall become effective no later than the first day of the first calendar month beginning after the date the plan receives the request for special enrollment. (B) Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, coverage under the plan contract shall become effective on the date of birth, adoption, or placement for adoption. (d) During the first 30 days after the effective date of the plan contract, the small employer shall have the option of changing coverage to a different plan contract offered by the same health care service plan. If a small employer notifies the plan of the change within the first 15 days of a month, coverage under the new plan contract shall become effective no later than the first day of the following month. If a small employer notifies the plan of the change after the 15th day of a month, coverage under the new plan contract shall become effective no later than the first day of the second month following notification. (e) All eligible employees and dependents listed on a small employer’s completed application shall be covered on the effective date of the health benefit plan. (Amended by Stats. 2015, Ch. 303, Sec. 250. (AB 731) Effective January 1, 2016.)
  71. 1357.505.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    This section lets certain employer associations offer a large group health plan to small employer members if many listed conditions are met, but limits health care service plans from doing so after June 1, 2025 unless registration requirements are satisfied.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.505. (a) Notwithstanding paragraph (2) of subdivision (a) of Section 1357.503, an association of employers may offer a large group health care service plan contract to small group employer members of the association, consistent with the Employee Retirement Income Security Act of 1974 (Public Law 93-406) (ERISA), as amended (29 U.S.C. Sec. 1001 et seq.), if all of the following requirements are met: (1) The association was established prior to January 1, 1966, has been in continuous existence since that date, and is a bona fide association or group of employers that may act as an employer under Section 3(5) of ERISA (29 U.S.C. Sec. 1002(5)). The association is the sponsor of a multiple employer welfare arrangement (MEWA), as defined under Section 3(40) of ERISA (29 U.S.C. Sec. 1002(40)). (2) The MEWA is fully insured as described in Section 514 of ERISA (29 U.S.C. Sec. 1144) and is in full compliance with all applicable state and federal laws. (3) The MEWA has offered a large group health care service plan contract since January 1, 2012, in connection with an employee welfare benefit plan under Section 3(1) of ERISA (29 U.S.C. Sec. 1002(1)). (4) The large group health care service plan contract offers to employees a level of coverage having an actuarial value equivalent to, or greater than, the platinum level of coverage pursuant to Section 1367.009 available through the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code and provides coverage for essential health benefits consistent with Section 1367.005 and any rules or regulations pursuant to that section. (5) The large group health care service plan contract includes coverage of common law employees, and their dependents, who are employed by an association member in the engineering, surveying, or design industry and whose employer has operations in California. (6) The large group health care service plan offers only fully insured benefits through a health care service plan contract with a health care service plan licensed by the Department of Managed Health Care. (7) Association members purchasing health coverage have a minimum of two full-time common law employees and are current employer members of the association sponsoring the MEWA. Employer members of the association subsidize employee premiums by at least 51 percent. (8) The association is an organization with business and organizational purposes unrelated to the provision of health care benefits and existed prior to the establishment of the MEWA offering the employee welfare benefit plan. (9) The participating member employers have a commonality of interests from being in the same industry, unrelated to the provision of health care benefits. (10) Membership in the association is open solely to employers, and the participating member employers, either directly or indirectly, exercise control over the employee welfare benefit plan, the MEWA, and the large group health care service plan contract, both in form and substance. (11) The large group health care service plan contract is treated as a single-risk-rated contract that is guaranteed issued and renewable for member employers, as well as their employees and dependents. An employee or dependent is not charged premium rates based on health status and is not excluded from coverage based upon any preexisting condition. Employee and dependent eligibility are not directly or indirectly based on health status or claims of any person. An employer otherwise eligible is not excluded from participating in a MEWA, or offering or renewing the large group health care service plan contract, based on the health status or claims of any employee or dependent. (12) The MEWA at all times covers at least 101 employees. (13) The association and the MEWA file applications for registration with the department on or before June 1, 2025. (A) An association and MEWA that timely register with the department prior to June 1, 2025, and that are found to be in compliance with this subdivision, shall annually file evidence of ongoing compliance with this subdivision with the department, in a form and manner set forth by the department. (B) Except as provided in paragraph (3) of subdivision (b), an association and MEWA that do not meet the requirements of subparagraph (A) shall be subject to the restrictions provided in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1357.503. (C) An association and MEWA that have registered with the department and fail to show ongoing compliance in their annual filing shall be subject to the restrictions in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1357.503. (D) By June 30, 2026, the department shall provide the health policy committees of the Legislature with the most recent filings made pursuant to subparagraph (A). (E) The filings and recommendations to be submitted pursuant to subparagraph (D) shall be submitted in compliance with Section 9795 of the Government Code. (F) (i) The department shall conduct an analysis of the impacts on the small employer health insurance market in California of health care service plans and health insurers currently issuing large group contracts and policies to small employers through MEWAs. The purpose of the analysis is to determine the extent to which coverage of Californians in existing MEWAs has any detrimental impact on the affordability of and access to small group health insurance for small businesses in California who do not purchase health insurance through a MEWA. The department may coordinate with the Department of Insurance. Health care service plans, health insurers, and MEWAs shall comply with requests for information from the departments to complete this analysis. The department shall post a report summarizing its analysis on its internet website on or before July 1, 2026. (ii) The department may contract with a consultant or consultants with expertise to assist the department in its analysis. Contracts entered into pursuant to this subparagraph shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, and the State Contract Act (Chapter 1 (commencing with Section 10100) of Part 2 of Division 2 of the Public Contract Code). (b) (1) On or after June 1, 2025, a health care service plan shall not market, issue, amend, renew, or deliver large employer health care service plan coverage to any association or MEWA that provides any benefit to a resident in this state unless the association and MEWA have registered with the department and are found to be in compliance with the requirements set forth in subdivision (a), or unless the association and MEWA filed applications for registration pursuant to subdivision (a) and the applications are pending before the department. The department shall have the authority to determine compliance with the requirements set forth in subdivision (a). (2) The department may issue guidance to health care service plans, associations, and MEWAs regarding registration and compliance with subdivision (a). The guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (3) Subdivision (a) does not apply to, or in any way affect, a self-funded or partially self-funded multiple employer welfare arrangement subject to Article 4.7 (commencing with Section 742.20) of Chapter 1 of Part 2 of Division 1 of the Insurance Code. (c) This section shall remain in effect only until January 1, 2030, and as of that date is repealed. (Added by Stats. 2024, Ch. 398, Sec. 1. (AB 2434) Effective January 1, 2025. Repealed as of January 1, 2030, by its own provisions.)
  72. 1357.506.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    A small employer health care service plan contract may not impose a preexisting condition provision or a waiting or affiliation period on any individual.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.506. A small employer health care service plan contract shall not impose a preexisting condition provision or a waiting or affiliation period upon any individual. (Repealed and added by Stats. 2014, Ch. 195, Sec. 4. (SB 1034) Effective January 1, 2015.)
  73. 1357.507.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    A health care service plan may restrict late enrollees to open enrollment periods.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.507. Nothing in this article shall be construed as prohibiting a health care service plan from restricting enrollment of late enrollees to open enrollment periods provided under Section 1357.503 as authorized under Section 2702 of the federal Public Health Service Act. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  74. 1357.508.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    A small employer health care service plan contract must provide subscribers and enrollees at least all essential health benefits defined by the state under PPACA Section 1302.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.508. A small employer health care service plan contract shall provide to subscribers and enrollees at least all of the essential health benefits as defined by the state pursuant to Section 1302 of PPACA. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  75. 1357.509.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

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    A health care service plan may refuse to offer or accept small employer coverage in certain limited cases, and the director keeps rehabilitation authority.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.509. (a) To the extent permitted by PPACA, a plan shall not be required to offer a health care service plan contract or accept applications for the contract pursuant to this article in the case of any of the following: (1) To a small employer, if the eligible employees and dependents who are to be covered by the plan contract do not live, work, or reside within a plan’s approved service areas. (2) (A) Within a specific service area or portion of a service area, if a plan reasonably anticipates and demonstrates to the satisfaction of the director all of the following: (i) It will not have sufficient health care delivery resources to ensure that health care services will be available and accessible to the eligible employee and dependents of the employee because of its obligations to existing enrollees. (ii) It is applying this subparagraph uniformly to all employers without regard to the claims experience of those employers, and their employees and dependents, or any health status-related factor relating to those employees and dependents. (iii) The action is not unreasonable or clearly inconsistent with the intent of this chapter. (B) A plan that cannot offer a health care service plan contract to small employers because it is lacking in sufficient health care delivery resources within a service area or a portion of a service area pursuant to subparagraph (A) may not offer a contract in the area in which the plan is not offering coverage to small employers to new employer groups until the later of the following dates: (i) The 181st day after the date that coverage is denied pursuant to this paragraph. (ii) The date the plan notifies the director that it has the ability to deliver services to small employer groups, and certifies to the director that from the date of the notice it will enroll all small employer groups requesting coverage in that area from the plan. (C) Subparagraph (B) shall not limit the plan’s ability to renew coverage already in force or relieve the plan of the responsibility to renew that coverage as described in Section 1365. (D) Coverage offered within a service area after the period specified in subparagraph (B) shall be subject to the requirements of this section. (b) (1) A health care service plan may decline to offer a health care service plan contract to a small employer if the plan demonstrates to the satisfaction of the director both of the following: (A) It does not have the financial reserves necessary to underwrite additional coverage. In determining whether this subparagraph has been satisfied, the director shall consider, but not be limited to, the plan’s compliance with the requirements of Section 1367, Article 6 (commencing with Section 1375), and the rules adopted thereunder. (B) It is applying this paragraph uniformly to all employers without regard to the claims experience of those employers and their employees and dependents or any health status-related factor relating to those employees and dependents. (2) A plan that denies coverage to a small employer under paragraph (1) shall not offer coverage in the group market before the later of the following dates: (A) The 181st day after the date that coverage is denied pursuant to paragraph (1). (B) The date the plan demonstrates to the satisfaction of the director that the plan has sufficient financial reserves necessary to underwrite additional coverage. (3) Paragraph (2) shall not limit the plan’s ability to renew coverage already in force or relieve the plan of the responsibility to renew that coverage as described in Section 1365. (4) Coverage offered within a service area after the period specified in paragraph (2) shall be subject to the requirements of this section. (c) Nothing in this article shall be construed to limit the director’s authority to develop and implement a plan of rehabilitation for a health care service plan whose financial viability or organizational and administrative capacity has become impaired, to the extent permitted by PPACA. (Amended by Stats. 2013, 1st Ex. Sess., Ch. 2, Sec. 6. (SB 2 1x) Effective September 30, 2013.)
  76. 1357.51.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. )

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    Health benefit plans for group coverage, nongrandfathered individual coverage, and group or individual coverage may not impose preexisting condition, waivered condition, waiting, or affiliation periods, with a limited grandfathered-plan exception.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. ) ## 1357.51. (a) A health benefit plan for group coverage shall not impose any preexisting condition provision or waivered condition provision upon any enrollee. (b) (1) A nongrandfathered health benefit plan for individual coverage shall not impose any preexisting condition provision or waivered condition provision upon any enrollee. (2) A grandfathered health benefit plan for individual coverage shall not exclude coverage on the basis of a waivered condition provision or preexisting condition provision for a period greater than 12 months following the enrollee’s effective date of coverage, nor limit or exclude coverage for a specific enrollee by type of illness, treatment, medical condition, or accident, except for satisfaction of a preexisting condition provision or waivered condition provision pursuant to this article. Waivered condition provisions or preexisting condition provisions contained in individual grandfathered health benefit plans may relate only to conditions for which medical advice, diagnosis, care, or treatment, including use of prescription drugs, was recommended or received from a licensed health practitioner during the 12 months immediately preceding the effective date of coverage. (3) In determining whether a preexisting condition provision or a waivered condition provision applies to an individual under this subdivision, a plan shall credit the time the individual was covered under creditable coverage, provided that the individual becomes eligible for coverage under the succeeding plan contract within 62 days of termination of prior coverage and applies for coverage under the succeeding plan within the applicable enrollment period. (c) A health benefit plan for group or individual coverage shall not impose any waiting or affiliation period. (Amended by Stats. 2021, Ch. 764, Sec. 1. (SB 326) Effective January 1, 2022.)
  77. 1357.510.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

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    The director may require a health care service plan to stop offering contracts or accepting applications from small employers or groups if the plan lacks sufficient financial, organizational, or administrative capacity. The director must also consider the plan’s compliance with related statutory and regulatory requirements when making that determination.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.510. The director may require a plan to discontinue the offering of contracts or acceptance of applications from any small employer or group upon a determination by the director that the plan does not have sufficient financial viability, or organizational and administrative capacity to ensure the delivery of health care services to its enrollees. In determining whether the conditions of this section have been met, the director shall consider, but not be limited to, the plan’s compliance with the requirements of Section 1367, Article 6 (commencing with Section 1375), and the rules adopted thereunder. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  78. 1357.512.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

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    This section limits how premium rates for certain small employer health care service plan contracts may vary and requires a department report on geographic rating regions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.512. (a) The premium rate for a small employer health care service plan contract issued, amended, or renewed on or after January 1, 2014, shall vary with respect to the particular coverage involved only by the following: (1) Age, pursuant to the age bands established by the United States Secretary of Health and Human Services and the age rating curve established by the Centers for Medicare and Medicaid Services pursuant to Section 2701(a)(3) of the federal Public Health Service Act (42 U.S.C. Sec. 300gg(a)(3)). Rates based on age shall be determined using the individual’s age as of the date of the contract issuance or renewal, as applicable, and shall not vary by more than three to one for like individuals of different age who are 21 years of age or older as described in federal regulations adopted pursuant to Section 2701(a)(3) of the federal Public Health Service Act (42 U.S.C. Sec. 300gg(a)(3)). (2) (A) Geographic region. The geographic regions for purposes of rating shall be the following: (i) Region 1 shall consist of the Counties of Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tuolumne, and Yuba. (ii) Region 2 shall consist of the Counties of Marin, Napa, Solano, and Sonoma. (iii) Region 3 shall consist of the Counties of El Dorado, Placer, Sacramento, and Yolo. (iv) Region 4 shall consist of the City and 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 Monterey, San Benito, and Santa Cruz. (x) Region 10 shall consist of the Counties of Mariposa, Merced, San Joaquin, Stanislaus, and Tulare. (xi) Region 11 shall consist of the Counties of Fresno, Kings, and Madera. (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 Imperial, Inyo, and Mono. (xiv) Region 14 shall consist of the County of Kern. (xv) Region 15 shall consist of the ZIP Codes in the County of Los Angeles starting with 906 to 912, inclusive, 915, 917, 918, and 935. (xvi) Region 16 shall consist of the ZIP Codes in the County of Los Angeles other than those identified in clause (xv). (xvii) Region 17 shall consist of the Counties of Riverside and San Bernardino. (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 review the geographic rating regions specified in this paragraph and the impacts of those regions on the health care coverage market in California, and submit a report to the appropriate policy committees of the Legislature. The requirement for submitting a report under this subparagraph is inoperative June 1, 2021, pursuant to Section 10231.5 of the Government Code. (3) Whether the contract covers an individual or family, as described in PPACA. (b) The rate for a health care service plan contract subject to this section shall not vary by any factor not described in this section. (c) The total premium charged to a small employer pursuant to this section shall be determined by summing the premiums of covered employees and dependents in accordance with Section 147.102(c)(1) of Title 45 of the Code of Federal Regulations. (d) The rating period for rates subject to this section shall be no less than 12 months from the date of issuance or renewal of the plan contract. (Amended by Stats. 2021, Ch. 764, Sec. 3. (SB 326) Effective January 1, 2022.)
  79. 1357.514.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

    Verify source ↗

    Plans and plan sellers must give small employers specified disclosures and brochures when offering small employer health care service plan contracts.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.514. In connection with the offering for sale of a small employer health care service plan contract subject to this article, each plan shall make a reasonable disclosure, as part of its solicitation and sales materials, of the following: (a) The provisions concerning the plan’s right to change premium rates and the factors other than provision of services experience that affect changes in premium rates. The plan shall disclose that claims experience cannot be used. (b) Provisions relating to the guaranteed issue and renewal of contracts. (c) A statement that no preexisting condition provisions shall be allowed. (d) Provisions relating to the small employer’s right to apply for any small employer health care service plan contract written, issued, or administered by the plan at the time of application for a new health care service plan contract, or at the time of renewal of a health care service plan contract, consistent with the requirements of PPACA. (e) The availability, upon request, of a listing of all the plan’s contracts and benefit plan designs offered, both inside and outside the Exchange, to small employers, including the rates for each contract. (f) At the time it offers a contract to a small employer, each plan shall provide the small employer with a statement of all of its small employer health care service plan contracts, including the rates for each plan contract, in the service area in which the employer’s employees and eligible dependents who are to be covered by the plan contract work or reside. For purposes of this subdivision, plans that are affiliated plans or that are eligible to file a consolidated income tax return shall be treated as one health plan. (g) Each plan shall do all of the following: (1) Prepare a brochure that summarizes all of its plan contracts offered to small employers and to make this summary available to any small employer and to solicitors upon request. The summary shall include for each contract information on benefits provided, a generic description of the manner in which services are provided, such as how access to providers is limited, benefit limitations, required copayments and deductibles, and a telephone number that can be called for more detailed benefit information. Plans are required to keep the information contained in the brochure accurate and up to date and, upon updating the brochure, send copies to solicitors and solicitor firms with whom the plan contracts to solicit enrollments or subscriptions. (2) For each contract, prepare a more detailed evidence of coverage and make it available to small employers, solicitors, and solicitor firms upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making contract selections. (3) Provide copies of the current summary brochure to all solicitors and solicitor firms contracting with the plan to solicit enrollments or subscriptions from small employers. For purposes of this subdivision, plans that are affiliated plans or that are eligible to file a consolidated income tax return shall be treated as one health plan. (h) Every solicitor or solicitor firm contracting with one or more plans to solicit enrollments or subscriptions from small employers shall do all of the following: (1) When providing information on contracts to a small employer but making no specific recommendations on particular plan contracts: (A) Advise the small employer of the plan’s obligation to sell to any small employer any small employer health care service plan contract, consistent with PPACA, and provide the small employer, upon request, with the actual rates that would be charged to that employer for a given contract. (B) Notify the small employer that the solicitor or solicitor firm will procure rate and benefit information for the small employer on any plan contract offered by a plan whose contract the solicitor sells. (C) Notify the small employer that upon request the solicitor or solicitor firm will provide the small employer with the summary brochure required under paragraph (1) of subdivision (g) for any plan contract offered by a plan with which the solicitor or solicitor firm has contracted to solicit enrollments or subscriptions. (D) Notify the small employer of the availability of coverage and the availability of tax credits for certain employers consistent with PPACA and state law, including any rules, regulations, or guidance issued in connection therewith. (2) When recommending a particular benefit plan design or designs, advise the small employer that, upon request, the agent will provide the small employer with the brochure required by paragraph (1) of subdivision (g) containing the benefit plan design or designs being recommended by the agent or broker. (3) Prior to filing an application for a small employer for a particular contract: (A) For each of the plan contracts offered by the plan whose contract the solicitor or solicitor firm is offering, provide the small employer with the benefit summary required in paragraph (1) of subdivision (g) and the premium for that particular employer. (B) Notify the small employer that, upon request, the solicitor or solicitor firm will provide the small employer with an evidence of coverage brochure for each contract the plan offers. (C) Obtain a signed statement from the small employer acknowledging that the small employer has received the disclosures required by this section. (Amended by Stats. 2014, Ch. 195, Sec. 5. (SB 1034) Effective January 1, 2015.)
  80. 1357.515.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

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    Plans must file a notice of material modification with the director at least 20 business days before renewing, amending, or offering certain plan contracts, and keep required information at their principal business office.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.515. (a) At least 20 business days prior to renewing or amending a plan contract subject to this article which will be in force on the operative date of this article, a plan shall file a notice of material modification with the director in accordance with the provisions of Section 1352. The notice of material modification shall include a statement certifying that the plan is in compliance with Section 1357.512. Any action by the director, as permitted under Section 1352, to disapprove, suspend, or postpone the plan’s use of a plan contract shall be in writing, specifying the reasons that the plan contract does not comply with the requirements of this chapter. (b) At least 20 business days prior to offering a plan contract subject to this article, all plans shall file a notice of material modification with the director in accordance with the provisions of Section 1352. The notice of material modification shall include a statement certifying that the plan is in compliance with Section 1357.512. Plans that will be offering to a small employer plan contracts approved by the director prior to the effective date of this article shall file a notice of material modification in accordance with this subdivision. Any action by the director, as permitted under Section 1352, to disapprove, suspend, or postpone the plan’s use of a plan contract shall be in writing, specifying the reasons that the plan contract does not comply with the requirements of this chapter. (c) Each plan shall maintain at its principal place of business all of the information required to be filed with the director pursuant to this section. (d) Nothing in this section shall be construed to limit the director’s authority to enforce the rating practices set forth in this article. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  81. 1357.516.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. )

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    Health care service plans may work with qualified associations, but if they do, they must set uniform service definitions, give all qualified associations the same premium discounts for approved services, and report discount schedules to the department.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.16. Nongrandfathered Small Employer Plans [1357.500 - 1357.516] ( Article 3.16 added by Stats. 2012, Ch. 852, Sec. 3. ) ## 1357.516. (a) Health care service plans may enter into contractual agreements with qualified associations, as defined in subdivision (b), under which these qualified associations may assume responsibility for performing specific administrative services, as defined in this section, for qualified association members. Health care service plans that enter into agreements with qualified associations for assumption of administrative services shall establish uniform definitions for the administrative services that may be provided by a qualified association or its third-party administrator. The health care service plan shall permit all qualified associations to assume one or more of these functions when the health care service plan determines the qualified association demonstrates the administrative capacity to assume these functions. For the purposes of this section, administrative services provided by qualified associations or their third-party administrators shall be services pertaining to eligibility determination, enrollment, premium collection, sales, or claims administration on a per-claim basis that would otherwise be provided directly by the health care service plan or through a third-party administrator on a commission basis or an agent or solicitor workforce on a commission basis. Each health care service plan that enters into an agreement with any qualified association for the provision of administrative services shall offer all qualified associations with which it contracts the same premium discounts for performing those services the health care service plan has permitted the qualified association or its third-party administrator to assume. The health care service plan shall report to the department its schedule of discounts for each administrative service. In no instance may a health care service plan provide discounts to qualified associations that are in any way intended to, or materially result in, a reduction in premium charges to the qualified association due to the health status of the membership of the qualified association. In addition to any other remedies available to the director to enforce this chapter, the director may declare a contract between a health care service plan and a qualified association for administrative services pursuant to this section null and void if the director determines any discounts provided to the qualified association are intended to, or materially result in, a reduction in premium charges to the qualified association due to the health status of the membership of the qualified association. (b) For the purposes of this section, a qualified association is a nonprofit corporation comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry that conforms to all of the following requirements: (1) It accepts for membership any individual or small employer meeting its membership criteria. (2) It does not condition membership directly or indirectly on the health or claims history of any person. (3) It uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association. (4) It is organized and maintained in good faith for purposes unrelated to insurance. (5) It existed on January 1, 1972, and has been in continuous existence since that date. (6) It has a constitution and bylaws or other analogous governing documents that provide for election of the governing board of the association by its members. (7) It offered, marketed, or sold health coverage to its members for 20 continuous years prior to January 1, 1993. (8) It agrees to offer only to association members any plan contract. (9) It agrees to include any member choosing to enroll in the plan contract offered by the association, provided that the member agrees to make required premium payments. (10) It complies with all provisions of this article. (11) It had at least 10,000 enrollees covered by association sponsored plans immediately prior to enactment of Chapter 1128 of the Statutes of 1992. (12) It applies any administrative cost at an equal rate to all members purchasing coverage through the qualified association. (c) A qualified association shall comply with Section 1357.52. (Added by Stats. 2012, Ch. 852, Sec. 3. (AB 1083) Effective January 1, 2013.)
  82. 1357.52.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. )

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    A group health benefit plan must not use health status-related factors to set eligibility or continued eligibility rules for enrollment.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. ) ## 1357.52. A health benefit plan for group coverage shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related 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 Section 2705 of the Public Health Service Act. (Repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. (AB 1083) Effective January 1, 2013. Section operative January 1, 2014, pursuant to Section 1357.55.)
  83. 1357.55.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. )

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    This section says Article 3.15 becomes operative on January 1, 2014.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.15. Preexisting Condition Provisions [1357.50 - 1357.55] ( Article 3.15 repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. ) ## 1357.55. This article shall become operative on January 1, 2014. (Repealed (in Sec. 5) and added by Stats. 2012, Ch. 852, Sec. 4. (AB 1083) Effective January 1, 2013. Note: This section prescribes a delayed operative date (January 1, 2014) for new Article 3.15, commencing with Section 1357.50.)
  84. 1357.600.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    This section defines key terms for grandfathered small employer health care service plans and sets rules on eligibility, late enrollment, preexisting conditions, rating factors, geographic regions, and small-employer coverage.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.600. As used in this article, the following definitions shall apply: (a) “Dependent” means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health care service plan contract covering the employee, and includes dependents of guaranteed association members if the association elects to include dependents under its health coverage at the same time it determines its membership composition pursuant to subdivision (n). (b) “Eligible employee” means either of the following: (1) Any permanent employee who is actively engaged on a full-time basis in the conduct of the business of the small employer with a normal workweek of an average of 30 hours per week over the course of a month, at the small employer’s regular places of business, who has met any statutorily authorized applicable waiting period requirements. The term does not include sole proprietors or the spouses of those sole proprietors, partners of a partnership or the spouses of those partners, or employees who work on a part-time, temporary, or substitute basis. It includes any eligible employee, as defined in this paragraph, who obtains coverage through a guaranteed association. Employees of employers purchasing through a guaranteed association are eligible employees if they would otherwise meet the definition except for the number of persons employed by the employer. Permanent employees who work at least 20 hours but not more than 29 hours are eligible employees if all four of the following apply: (A) They otherwise meet the definition of an eligible employee except for the number of hours worked. (B) The employer offers the employees health coverage under a health benefit plan. (C) All similarly situated individuals are offered coverage under the health benefit plan. (D) The employee shall have worked at least 20 hours per normal workweek for at least 50 percent of the weeks in the previous calendar quarter. The health care service plan may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings. (2) Any member of a guaranteed association as defined in subdivision (n). (c) “In force business” means an existing health benefit plan contract issued by the plan to a small employer. (d) “Late enrollee” means an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan and who subsequently requests enrollment in a health benefit plan of that small employer, provided that the initial enrollment period shall be a period of at least 30 days. It also means any member of an association that is a guaranteed association as well as any other person eligible to purchase through the guaranteed association when that person has failed to purchase coverage during the initial enrollment period provided under the terms of the guaranteed association’s plan contract and who subsequently requests enrollment in the plan, provided that the initial enrollment period shall be a period of at least 30 days. However, an eligible employee, any other person eligible for coverage through a guaranteed association pursuant to subdivision (n), or an eligible dependent shall not be considered a late enrollee if any of the following is applicable: (1) The individual meets all of the following requirements: (A) He or she was covered under another employer health benefit plan, the Healthy Families Program, the Access for Infants and Mothers (AIM) Program, the Medi-Cal program, or coverage through the California Health Benefit Exchange at the time the individual was eligible to enroll. (B) He or she certified at the time of the initial enrollment that coverage under another employer health benefit plan, the Healthy Families Program, the AIM Program, the Medi-Cal program, or coverage through the California Health Benefit Exchange was the reason for declining enrollment, provided that, if the individual was covered under another employer health benefit plan, including a plan offered through the California Health Benefit Exchange, the individual was given the opportunity to make the certification required by this subdivision and was notified that failure to do so could result in later treatment as a late enrollee. (C) He or she has lost or will lose coverage under another employer health benefit plan as a result of termination of employment of the individual or of a person through whom the individual was covered as a dependent, change in employment status of the individual or of a person through whom the individual was covered as a dependent, termination of the other plan’s coverage, cessation of an employer’s contribution toward an employee’s or dependent’s coverage, death of the person through whom the individual was covered as a dependent, legal separation, or divorce; or he or she has lost or will lose coverage under the Healthy Families Program, the AIM Program, the Medi-Cal program, or coverage through the California Health Benefit Exchange. (D) He or she requests enrollment within 30 days after termination of coverage or employer contribution toward coverage provided under another employer health benefit plan, or requests enrollment within 60 days after termination of Medi-Cal program coverage, AIM Program coverage, Healthy Families Program coverage, or coverage through the California Health Benefit Exchange. (2) The employer offers multiple health benefit plans and the employee elects a different plan during an open enrollment period. (3) A court has ordered that coverage be provided for a spouse or minor child under a covered employee’s health benefit plan. (4) (A) In the case of an eligible employee, as defined in paragraph (1) of subdivision (b), the plan cannot produce a written statement from the employer stating that the individual or the person through whom the individual was eligible to be covered as a dependent, prior to declining coverage, was provided with, and signed, acknowledgment of an explicit written notice in boldface type specifying that failure to elect coverage during the initial enrollment period permits the plan to impose, at the time of the individual’s later decision to elect coverage, an exclusion from eligibility for coverage until the next open enrollment period, unless the individual meets the criteria specified in paragraph (1), (2), or (3). This exclusion from eligibility for coverage shall not be considered a waiting period in violation of Section 1357.51 or 1357.607. (B) In the case of an association member who did not purchase coverage through a guaranteed association, the plan cannot produce a written statement from the association stating that the association sent a written notice in boldface type to all potentially eligible association members at their last known address prior to the initial enrollment period informing members that failure to elect coverage during the initial enrollment period permits the plan to impose, at the time of the member’s later decision to elect coverage, an exclusion from eligibility for coverage until the next open enrollment period, unless the individual meets the requirements of subparagraphs (A), (C), and (D) of paragraph (1) or meets the requirements of paragraph (2) or (3). This exclusion from eligibility for coverage shall not be considered a waiting period in violation of Section 1357.51 or 1357.607. (C) In the case of an employer or person who is not a member of an association, was eligible to purchase coverage through a guaranteed association, and did not do so, and would not be eligible to purchase guaranteed coverage unless purchased through a guaranteed association, the employer or person can demonstrate that he or she meets the requirements of subparagraphs (A), (C), and (D) of paragraph (1), or meets the requirements of paragraph (2) or (3), or that he or she recently had a change in status that would make him or her eligible and that application for enrollment was made within 30 days of the change. (5) The individual is an employee or dependent who meets the criteria described in paragraph (1) and was under a COBRA continuation provision and the coverage under that provision has been exhausted. For purposes of this section, the definition of “COBRA” set forth in subdivision (e) of Section 1373.621 shall apply. (6) The individual is a dependent of an enrolled eligible employee who has lost or will lose his or her coverage under the Healthy Families Program, the AIM Program, the Medi-Cal program, or a health benefit plan offered through the California Health Benefit Exchange and requests enrollment within 60 days after termination of that coverage. (7) The individual is an eligible employee who previously declined coverage under an employer health benefit plan, including a plan offered through the California Health Benefit Exchange, and who has subsequently acquired a dependent who would be eligible for coverage as a dependent of the employee through marriage, birth, adoption, or placement for adoption, and who enrolls for coverage under that employer health benefit plan on his or her behalf and on behalf of his or her dependent within 30 days following the date of marriage, birth, adoption, or placement for adoption, in which case the effective date of coverage shall be the first day of the month following the date the completed request for enrollment is received in the case of marriage, or the date of birth, or the date of adoption or placement for adoption, whichever applies. Notice of the special enrollment rights contained in this paragraph shall be provided by the employer to an employee at or before the time the employee is offered an opportunity to enroll in plan coverage. (8) The individual is an eligible employee who has declined coverage for himself or herself or his or her dependents during a previous enrollment period because his or her dependents were covered by another employer health benefit plan, including a plan offered through the California Health Benefit Exchange, at the time of the previous enrollment period. That individual may enroll himself or herself or his or her dependents for plan coverage during a special open enrollment opportunity if his or her dependents have lost or will lose coverage under that other employer health benefit plan. The special open enrollment opportunity shall be requested by the employee not more than 30 days after the date that the other health coverage is exhausted or terminated. Upon enrollment, coverage shall be effective not later than the first day of the first calendar month beginning after the date the request for enrollment is received. Notice of the special enrollment rights contained in this paragraph shall be provided by the employer to an employee at or before the time the employee is offered an opportunity to enroll in plan coverage. (e) “Preexisting condition provision” means a contract provision that excludes coverage for charges or expenses incurred during a specified period following the enrollee’s effective date of coverage, as to a condition for which medical advice, diagnosis, care, or treatment was recommended or received during a specified period immediately preceding the effective date of coverage. A health care service plan shall not limit or exclude coverage for any individual based on a preexisting condition whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date. (f) “Creditable coverage” means: (1) Any individual or group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage but does not include accident only, credit, coverage for onsite medical clinics, disability income, Medicare supplement, long-term care, dental, vision, coverage issued as a supplement to liability insurance, insurance arising out of a workers’ compensation or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (2) The Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.). (3) The Medicaid program pursuant to Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.). (4) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (5) Chapter 55 (commencing with Section 1071) of Title 10 of the United States Code (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)). (6) A medical care program of the Indian Health Service or of a tribal organization. (7) A health plan offered under Chapter 89 (commencing with Section 8901) of Title 5 of the United States Code (Federal Employees Health Benefits Program (FEHBP)). (8) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996. (9) A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)). (10) Any other creditable coverage as defined by subsection (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)). (g) “Rating period” means the period for which premium rates established by a plan are in effect and shall be no less than 12 months from the date of issuance or renewal of the health care service plan contract. (h) “Risk adjusted employee risk rate” means the rate determined for an eligible employee of a small employer in a particular risk category after applying the risk adjustment factor. (i) “Risk adjustment factor” means the percentage adjustment to be applied equally to each standard employee risk rate for a particular small employer, based upon any expected deviations from standard cost of services. This factor may not be more than 110 percent or less than 90 percent. (j) “Risk category” means the following characteristics of an eligible employee: age, geographic region, and family composition of the employee, plus the health benefit plan selected by the small employer. (1) No more than the following age categories may be used in determining premium rates: Under 30 30–39 40–49 50–54 55–59 60–64 65 and over. However, for the 65 years of age and over category, separate premium rates may be specified depending upon whether coverage under the plan contract will be primary or secondary to benefits provided by the Medicare Program pursuant to Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.). (2) Small employer health care service plans shall base rates to small employers using no more than the following family size categories: (A) Single. (B) Married couple or registered domestic partners. (C) One adult and child or children. (D) Married couple or registered domestic partners and child or children. (3) (A) In determining rates for small employers, a plan that operates statewide shall use no more than nine geographic regions in the state, have no region smaller than an area in which the first three digits of all its ZIP Codes are in common within a county, and divide no county into more than two regions. Plans shall be deemed to be operating statewide if their coverage area includes 90 percent or more of the state’s population. Geographic regions established pursuant to this section shall, as a group, cover the entire state, and the area encompassed in a geographic region shall be separate and distinct from areas encompassed in other geographic regions. Geographic regions may be noncontiguous. (B) (i) In determining rates for small employers, a plan that does not operate statewide shall use no more than the number of geographic regions in the state that is determined by the following formula: the population, as determined in the last federal census, of all counties that are included in their entirety in a plan’s service area divided by the total population of the state, as determined in the last federal census, multiplied by nine. The resulting number shall be rounded to the nearest whole integer. A region shall not be smaller than an area in which the first three digits of all its ZIP Codes are in common within a county and no county may be divided into more than two regions. The area encompassed in a geographic region shall be separate and distinct from areas encompassed in other geographic regions. Geographic regions may be noncontiguous. A plan shall not have less than one geographic area. (ii) If the formula in clause (i) results in a plan that operates in more than one county having only one geographic region, then the formula in clause (i) shall not apply and the plan may have two geographic regions, provided that no county is divided into more than one region. This section does not require a plan to establish a new service area or to offer health coverage on a statewide basis, outside of the plan’s existing service area. (k) (1) “Small employer” means any of the following: (A) For plan years commencing on or after January 1, 2014, and on or before December 31, 2015, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 50, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. For plan years commencing on or after January 1, 2016, any person, firm, proprietary or nonprofit corporation, partnership, public agency, or association that is actively engaged in business or service, that, on at least 50 percent of its working days during the preceding calendar quarter or preceding calendar year, employed at least one, but no more than 100, eligible employees, the majority of whom were employed within this state, that was not formed primarily for purposes of buying health care service plan contracts, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a health care service plan shall use the test that ensures eligibility if only one test would establish eligibility. In determining the number of eligible employees, companies that are affiliated companies and that are eligible to file a combined tax return for purposes of state taxation shall be considered one employer. Subsequent to the issuance of a health care service plan contract to a small employer pursuant to this article, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this article, provisions of this article that apply to a small employer shall continue to apply until the plan contract anniversary following the date the employer no longer meets the requirements of this definition. It includes any small employer as defined in this subparagraph who purchases coverage through a guaranteed association, any employer purchasing coverage for employees through a guaranteed association, and any small employer as defined in this paragraph who purchases coverage through any arrangement. (B) Any guaranteed association, as defined in subdivision (m), that purchases health coverage for members of the association. (2) For plan years commencing on or after January 1, 2019, for purposes of determining whether an employer has one employee, sole proprietors and their spouses, and partners of a partnership and their spouses, are not employees. (l) “Standard employee risk rate” means the rate applicable to an eligible employee in a particular risk category in a small employer group. (m) “Guaranteed association” means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k), (2) does not condition membership directly or indirectly on the health or claims history of any person, (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered to the association, (4) is organized and maintained in good faith for purposes unrelated to insurance, (5) has been in active existence on January 1, 1992, and for at least five years prior to that date, (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992, (7) has a constitution and bylaws, or other analogous governing documents that provide for election of the governing board of the association by its members, (8) offers any plan contract that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments, and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate. This subdivision applies regardless of whether a contract issued by a plan is with an association, or a trust formed for or sponsored by an association, to administer benefits for association members. For purposes of this subdivision, an association formed by a merger of two or more associations after January 1, 1992, and otherwise meeting the criteria of this subdivision shall be deemed to have been in active existence on January 1, 1992, if its predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and otherwise met the criteria of this subdivision. (n) “Members of a guaranteed association” means any individual or employer meeting the association’s membership criteria if that person is a member of the association and chooses to purchase health coverage through the association. At the association’s discretion, it also may include employees of association members, association staff, retired members, retired employees of members, and surviving spouses and dependents of deceased members. However, if an association chooses to include these persons as members of the guaranteed association, the association shall make that election in advance of purchasing a plan contract. Health care service plans may require an association to adhere to the membership composition it selects for up to 12 months. (o) “Affiliation period” means a period that, under the terms of the health care service plan contract, must expire before health care services under the contract become effective. (p) “Grandfathered small employer health care service plan contract” means a small employer health care service plan contract that constitutes a grandfathered health plan. (q) “Grandfathered health plan” has the meaning set forth in Section 1251 of PPACA. (r) “Nongrandfathered small employer health care service plan contract” means a small employer health care service plan contract that is not a grandfathered health plan. (s) “Plan year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. (t) “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. (u) “Registered domestic partner” means a person who has established a domestic partnership as described in Section 297 of the Family Code. (v) “Small employer health care service plan contract” means a health care service plan contract issued to a small employer. (w) “Waiting period” means a period that is required to pass with respect to an employee before the employee is eligible to be covered for benefits under the terms of the contract. (Amended by Stats. 2018, Ch. 700, Sec. 4. (SB 1375) Effective January 1, 2019.)
  85. 1357.601.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    This article applies only to grandfathered small group health care service plan contracts, and only for plan years beginning on or after January 1, 2014.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.601. This article shall apply only to grandfathered small group health care service plan contracts and only with respect to plan years commencing on or after January 1, 2014. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  86. 1357.602.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    A health care service plan for small employers is covered by this article if certain premium-payment or tax-treatment conditions are met, but several contract types are excluded.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.602. (a) A health care service plan providing or arranging for the provision of basic health care services to small employers shall be subject to this article if either of the following conditions are met: (1) Any portion of the premium is paid by a small employer, or any covered individual is reimbursed, whether through wage adjustments or otherwise, by a small employer for any portion of the premium. (2) The plan contract is treated by the small employer or any of the covered individuals as part of a plan or program for the purposes of Section 106 or 162 of the Internal Revenue Code. (b) This article shall not apply to health care service plan contracts for coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement, Medi-Cal contracts with the State Department of Health Care Services, long-term care coverage, or specialized health care service plan contracts. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  87. 1357.603.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    This section says the article does not stop this chapter from applying to certain associations, trusts, other organizations, or people involved in presenting health care service plan information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.603. Nothing in this article shall be construed to preclude the application of this chapter to either of the following: (a) An association, trust, or other organization acting as a “health care service plan” as defined under Section 1345. (b) An association, trust, or other organization or person presenting information regarding a health care service plan to persons who may be interested in subscribing or enrolling in the plan. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  88. 1357.604.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    Plans must renew grandfathered small-employer contracts fairly, disclose certain contracts to small employers, file participation and contribution requirements with the director, and avoid health-status-based steering or eligibility rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.604. (a) (1) A plan shall fairly and affirmatively renew a grandfathered health plan contract with a small employer. (2) Each plan shall make available to each small employer all nongrandfathered small employer health care service plan contracts that the plan offers and sells to small employers or to associations that include small employers in this state consistent with Article 3.1 (commencing with Section 1357). (3) No plan or solicitor shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health care service plan contract that is provided in connection with the employee’s employment or membership in a guaranteed association. (b) Every plan shall file with the director the reasonable employee participation requirements and employer contribution requirements that will be applied in renewing its grandfathered health care service plan contracts. Participation requirements shall be applied uniformly among all small employer groups, except that a plan may vary application of minimum employee participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employee’s premium. Employer contribution requirements shall not vary by employer size. A health care service plan shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in subdivision (a) of Section 1357.600 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and (2) allows a plan to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer. Members of an association eligible for health coverage under subdivision (n) of Section 1357.600, but not electing any health coverage through the association, shall not be counted as eligible employees for purposes of determining whether the guaranteed association meets a plan’s reasonable participation standards. (c) No plan or solicitor shall, directly or indirectly, engage in the following activities: (1) Encourage or direct small employers to refrain from filing an application for coverage or renewal of coverage with a plan because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plan’s approved service area. (2) Encourage or direct small employers to seek coverage from another plan, or coverage offered through the California Health Benefit Exchange, because of the health status, claims experience, industry, occupation of the small employer, or geographic location provided that it is within the plan’s approved service area. (d) A plan shall not, directly or indirectly, enter into any contract, agreement, or arrangement with a solicitor that provides for or results in the compensation paid to a solicitor for the sale of a health care service plan contract to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer. This subdivision does not apply to a compensation arrangement that provides compensation to a solicitor on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation, or geographic area of the small employer or small employer’s employees. (e) A policy or contract that covers a small employer, as defined in Section 1304(b) of PPACA and in subdivision (k) of Section 1357.600 shall not establish rules for eligibility, including continued eligibility, of an individual, or dependent of an individual, to enroll under the terms of the plan based on any of the following health status-related factors: (1) Health status. (2) Medical condition, including physical and mental illnesses. (3) Claims experience. (4) Receipt of health care. (5) Medical history. (6) Genetic information. (7) Evidence of insurability, including conditions arising out of acts of domestic violence. (8) Disability. (9) Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act. (f) A plan shall comply with the requirements of Section 1374.3. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  89. 1357.606.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    Certain associations may renew grandfathered small employer health care service plan contracts, but the guaranteed coverage is limited to specified members and time periods.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.606. (a) For plan contracts expiring after July 1, 1994, 60 days prior to July 1, 1994, an association that meets the definition of a guaranteed association, as set forth in Section 1357.600, except for the requirement that 1,000 persons be covered, shall be entitled to renew grandfathered small employer health care service plan contracts as if the association were a guaranteed association, except that the coverage shall be guaranteed only for those members of an association, as defined in Section 1357.600, (1) who were receiving coverage or had successfully applied for coverage through the association as of June 30, 1993, (2) who were receiving coverage through the association as of December 31, 1992, and whose coverage lapsed at any time thereafter because the employment through which coverage was received ended or an employer’s contribution to health coverage ended, or (3) who were covered at any time between June 30, 1993, and July 1, 1994, under a contract that was in force on June 30, 1993. (b) An association obtaining health coverage for its members pursuant to this section shall otherwise be afforded all the rights of a guaranteed association under this chapter, including, but not limited to, guaranteed renewability of coverage. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  90. 1357.607.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    A small employer health care service plan contract may not impose a preexisting condition provision or any waiting or affiliation period on an individual.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.607. A small employer health care service plan contract shall not impose a preexisting condition provision or a waiting or affiliation period upon any individual. (Repealed and added by Stats. 2014, Ch. 195, Sec. 8. (SB 1034) Effective January 1, 2015.)
  91. 1357.608.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    A health care service plan may restrict late enrollees to open enrollment periods if that is consistent with federal law.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.608. Nothing in this article shall be construed as prohibiting a health care service plan from restricting enrollment of late enrollees to open enrollment periods consistent with federal law. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  92. 1357.609.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    Grandfathered small employer health care service plan contracts must provide subscribers and enrollees at least the basic health care services listed in the cited law and regulation.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.609. All grandfathered small employer health care service plan contracts shall provide to subscribers and enrollees at least all of the basic health care services included in subdivision (b) of Section 1345, and in Section 1300.67 of the California Code of Regulations. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  93. 1357.610.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    This section says a plan is not required to offer coverage in two specified situations, and it preserves the director’s authority to develop and implement rehabilitation plans for impaired health care service plans.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.610. (a) No plan shall be required by the provisions of this article: (1) To offer coverage under a small employer’s health care service plan contract to an otherwise eligible employee or dependent, when the eligible employee or dependent does not work or reside within the plan’s approved service area, except as provided in Chapter 7 (commencing with Section 3750) of Part 1 of Division 9 of the Family Code. (2) To offer coverage under a small employer’s health care service plan contract to an eligible employee, as defined in paragraph (2) of subdivision (b) of Section 1357.600, who within 12 months of application for coverage terminated from a small employer health care service plan contract offered by the plan. (b) Nothing in this article shall be construed to limit the director’s authority to develop and implement a plan of rehabilitation for a health care service plan whose financial viability or organizational and administrative capacity has become impaired. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  94. 1357.611.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    The director may order a plan to stop renewing certain contracts or accepting applications if the plan lacks sufficient financial or administrative capacity, and the director must consider specified compliance factors when making that decision.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.611. (a) The director may require a plan to discontinue the renewal of grandfathered small employer health care service plan contracts or the offering or acceptance of applications from any group upon a determination by the director that the plan does not have sufficient financial viability, or organizational and administrative capacity to ensure the delivery of health care services to its enrollees. In determining whether the conditions of this section have been met, the director shall consider, but not be limited to, the plan’s compliance with the requirements of Section 1367, Article 6 (commencing with Section 1375), and the rules adopted thereunder. (b) Nothing in this article shall be construed to limit the director’s authority to develop and implement a plan of rehabilitation for a health care service plan whose financial viability or organizational and administrative capacity has become impaired. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  95. 1357.612.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    Plans renewing grandfathered small employer contracts must follow rate-setting limits, including risk-adjusted premium ranges, timing limits, and rules for composite rates.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.612. Premiums for grandfathered contracts renewed by plans on or after January 1, 2014, shall be subject to the following requirements: (a) (1) The premium for in force business shall be determined for an eligible employee in a particular risk category after applying a risk adjustment factor to the plan’s standard employee risk rates. The risk adjusted employee risk rates may not be more than 110 percent or less than 90 percent. The risk adjustment factor applied to a small employer may not increase by more than 10 percentage points from the risk adjustment factor applied in the prior rating period. The risk adjustment factor for a small employer may not be modified more frequently than every 12 months. (2) The premium charged a small employer for in force business shall be equal to the sum of the risk adjusted employee risk rates. The standard employee risk rates shall be in effect for no less than 12 months. (b) (1) For any small employer, a plan may, with the consent of the small employer, establish composite employee and dependent rates for renewal of in force business. The composite rates shall be determined as the average of the risk adjusted employee risk rates for the small employer, as determined in accordance with the requirements of subdivision (a). The sum of the composite rates so determined shall be equal to the sum of the risk adjusted employee risk rates for the small employer. (2) The composite rates shall be used for all employees and dependents covered throughout a rating period of 12 months, except that a plan may reserve the right to redetermine the composite rates if the enrollment under the contract changes by more than a specified percentage during the rating period. Any redetermination of the composite rates shall be based on the same risk adjusted employee risk rates used to determine the initial composite rates for the rating period. If a plan reserves the right to redetermine the rates and the enrollment changes more than the specified percentage, the plan shall redetermine the composite rates if the redetermined rates would result in a lower premium for the small employer. A plan reserving the right to redetermine the composite rates based upon a change in enrollment shall use the same specified percentage to measure that change with respect to all small employers electing composite rates. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  96. 1357.613.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    Plans must apply standard employee risk rates consistently for all small employers.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.613. Plans shall apply standard employee risk rates consistently with respect to all small employers. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  97. 1357.614.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    When renewing a grandfathered small employer health care service plan contract, each plan must give a reasonable disclosure and provide specified brochures, coverage details, and rate information to small employers, solicitors, and solicitor firms.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.614. In connection with the renewal of a grandfathered small employer health care service plan contract, each plan shall make a reasonable disclosure, as part of its solicitation and sales materials, of the following: (a) The extent to which premium rates for a specified small employer are established or adjusted in part based upon the actual or expected variation in service costs of the employees and dependents of the small employer. (b) The provisions concerning the plan’s right to change premium rates and the factors other than provision of services experience that affect changes in premium rates. (c) Provisions relating to the guaranteed issue and renewal of contracts. (d) Provisions relating to the effect of any waiting or affiliation provision. (e) Provisions relating to the small employer’s right to apply for any nongrandfathered small employer health care service plan contract written, issued, or administered by the plan at the time of application for a new health care service plan contract, or at the time of renewal of a health care service plan contract, consistent with the requirements of PPACA. (f) The availability, upon request, of a listing of all the plan’s nongrandfathered small employer health care service plan contracts and benefit plan designs offered, both inside and outside the California Health Benefit Exchange, including the rates for each contract. (g) At the time it renews a grandfathered small employer health care service plan contract, each plan shall provide the small employer with a statement of all of its nongrandfathered small employer health care service plan contracts, including the rates for each plan contract, in the service area in which the employer’s employees and eligible dependents who are to be covered by the plan contract work or reside. For purposes of this subdivision, plans that are affiliated plans or that are eligible to file a consolidated income tax return shall be treated as one health plan. (h) Each plan shall do all of the following: (1) Prepare a brochure that summarizes all of its small employer health care service plan contracts and to make this summary available to any small employer and to solicitors upon request. The summary shall include for each contract information on benefits provided, a generic description of the manner in which services are provided, such as how access to providers is limited, benefit limitations, required copayments and deductibles, standard employee risk rates, and a telephone number that can be called for more detailed benefit information. Plans are required to keep the information contained in the brochure accurate and up to date and, upon updating the brochure, send copies to solicitors and solicitor firms with which the plan contracts to solicit enrollments or subscriptions. (2) For each contract, prepare a more detailed evidence of coverage and make it available to small employers, solicitors, and solicitor firms upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making contract selections. (3) Provide to small employers and solicitors, upon request, for any given small employer the sum of the standard employee risk rates and the sum of the risk adjusted employee risk rates. When requesting this information, small employers, solicitors, and solicitor firms shall provide the plan with the information the plan needs to determine the small employer’s risk adjusted employee risk rate. (4) Provide copies of the current summary brochure to all solicitors and solicitor firms contracting with the plan to solicit enrollments or subscriptions from small employers. For purposes of this subdivision, plans that are affiliated plans or that are eligible to file a consolidated income tax return shall be treated as one health plan. (Amended by Stats. 2014, Ch. 195, Sec. 9. (SB 1034) Effective January 1, 2015.)
  98. 1357.615.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    A plan must file advance notice and related certifications before renewing or changing certain small employer health care service plan rates or risk settings, and the director may disapprove changes in writing.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.615. (a) At least 20 business days prior to renewing or amending a small employer health care service plan contract subject to this article, a plan shall file a notice of material modification with the director in accordance with the provisions of Section 1352. The notice of material modification shall include a statement certifying that the plan is in compliance with subdivision (i) of Section 1357.600 and Section 1357.612. The certified statement shall set forth the standard employee risk rate for each risk category and the highest and lowest risk adjustment factors that will be used in setting the rates at which the contract will be renewed or amended. Any action by the director, as permitted under Section 1352, to disapprove, suspend, or postpone the plan’s use of a plan contract shall be in writing, specifying the reasons that the plan contract does not comply with the requirements of this chapter. (b) Prior to making any changes in the risk categories, risk adjustment factors or standard employee risk rates filed with the director pursuant to subdivision (a), the plan shall file as an amendment a statement setting forth the changes and certifying that the plan is in compliance with subdivision (i) of Section 1357.600 and Section 1357.612. A plan may commence utilizing the changed risk categories set forth in the certified statement on the 31st day from the date of the filing, or at an earlier time determined by the director, unless the director disapproves the amendment by written notice, stating the reasons therefor. If only the standard employee risk rate is being changed, and not the risk categories or risk adjustment factors, a plan may commence utilizing the changed standard employee risk rate upon filing the certified statement unless the director disapproves the amendment by written notice. (c) Periodic changes to the standard employee risk rate that a plan proposes to implement over the course of up to 12 consecutive months may be filed in conjunction with the certified statement filed under subdivision (a) or (b). (d) Each plan shall maintain at its principal place of business all of the information required to be filed with the director pursuant to this section. (e) Each plan shall make available to the director, on request, the risk adjustment factor used in determining the rate for any particular small employer. (f) Nothing in this section shall be construed to limit the director’s authority to enforce the rating practices set forth in this article. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  99. 1357.616.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    Health care service plans may contract with qualified associations for administrative services, but they must set uniform service definitions, apply and report uniform premium discounts, avoid health-status-based premium reductions, and a director may void a contract for improper discounts.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.616. (a) Health care service plans may enter into contractual agreements with qualified associations, as defined in subdivision (b), under which these qualified associations may assume responsibility for performing specific administrative services, as defined in this section, for qualified association members. Health care service plans that enter into agreements with qualified associations for assumption of administrative services shall establish uniform definitions for the administrative services that may be provided by a qualified association or its third-party administrator. The health care service plan shall permit all qualified associations to assume one or more of these functions when the health care service plan determines the qualified association demonstrates the administrative capacity to assume these functions. For the purposes of this section, administrative services provided by qualified associations or their third-party administrators shall be services pertaining to eligibility determination, enrollment, premium collection, sales, or claims administration on a per-claim basis that would otherwise be provided directly by the health care service plan or through a third-party administrator on a commission basis or an agent or solicitor workforce on a commission basis. Each health care service plan that enters into an agreement with any qualified association for the provision of administrative services shall offer all qualified associations with which it contracts the same premium discounts for performing those services the health care service plan has permitted the qualified association or its third-party administrator to assume. The health care service plan shall apply these uniform discounts to the health care service plan’s risk adjusted employee risk rates after the health plan has determined the qualified association’s risk adjusted employee risk rates pursuant to Section 1357.612. The health care service plan shall report to the department its schedule of discounts for each administrative service. In no instance may a health care service plan provide discounts to qualified associations that are in any way intended to, or materially result in, a reduction in premium charges to the qualified association due to the health status of the membership of the qualified association. In addition to any other remedies available to the director to enforce this chapter, the director may declare a contract between a health care service plan and a qualified association for administrative services pursuant to this section null and void if the director determines any discounts provided to the qualified association are intended to, or materially result in, a reduction in premium charges to the qualified association due to the health status of the membership of the qualified association. (b) For the purposes of this section, a qualified association is a nonprofit corporation comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, that conforms to all of the following requirements: (1) It accepts for membership any individual or small employer meeting its membership criteria. (2) It does not condition membership directly or indirectly on the health or claims history of any person. (3) It uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues shall not depend on whether the member applies for or purchases insurance offered by the association. (4) It is organized and maintained in good faith for purposes unrelated to insurance. (5) It existed on January 1, 1972, and has been in continuous existence since that date. (6) It has a constitution and bylaws or other analogous governing documents that provide for election of the governing board of the association by its members. (7) It offered, marketed, or sold health coverage to its members for 20 continuous years prior to January 1, 1993. (8) It agrees to offer only to association members any plan contract. (9) It agrees to include any member choosing to enroll in the plan contract offered by the association, provided that the member agrees to make required premium payments. (10) It complies with all provisions of this article. (11) It had at least 10,000 enrollees covered by association sponsored plans immediately prior to enactment of Chapter 1128 of the Statutes of 1992. (12) It applies any administrative cost at an equal rate to all members purchasing coverage through the qualified association. (c) A qualified association shall comply with Section 1357.52. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  100. 1357.618.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. )

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    The department may adopt emergency regulations for this article, and may readopt a substantially equivalent emergency regulation.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.17. Grandfathered Small Employer Plans [1357.600 - 1357.618] ( Article 3.17 added by Stats. 2012, Ch. 852, Sec. 6. ) ## 1357.618. (a) The department may adopt emergency regulations implementing this article no later than August 31, 2013. The department may readopt any emergency regulation authorized by this section that is the same as or substantially equivalent to an emergency regulation previously adopted under this section. (b) The initial adoption of emergency regulations implementing this section and the one readoption of emergency regulations authorized by this section shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, safety, or general welfare. The initial emergency regulations and the one readoption of emergency regulations authorized by this section shall be submitted to the Office of Administrative Law for filing with the Secretary of State and each shall remain in effect for no more than 180 days, by which time final regulations may be adopted. (Added by Stats. 2012, Ch. 852, Sec. 6. (AB 1083) Effective January 1, 2013.)
  101. 1358.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Health care service plans offering Medicare supplement contracts must follow this article, and those contracts may not include certain basic health care services where federal Medicare supplement rules require disallowance.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.1. Every health care service plan that offers any contract that primarily or solely supplements Medicare or that is advertised or represented as a supplement to Medicare, shall, in addition to complying with this chapter and rules of the director, comply with this article. The basic health care services required to be provided pursuant to Sections 1345 and 1367 shall not be included in Medicare supplement contracts subject to this article, to the extent that California is required to disallow coverage for these health care services under the federal Medicare supplement standardization requirements set forth in Section 1882 of the federal Social Security Act (42 U.S.C.A. Sec. 1395ss). (Repealed and added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  102. 1358.10.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Medicare Select issuers must get director approval and follow filing, disclosure, grievance, and coverage-continuation rules before and while offering these contracts.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.10. (a) (1) This section shall apply to Medicare Select contracts, as defined in this section. (2) A contract shall not be advertised as a Medicare Select contract unless it meets the requirements of this section. (b) For the purposes of this section: (1) “Complaint” means any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers. (2) “Grievance” means dissatisfaction expressed in writing by an individual covered by a Medicare Select contract with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers. (3) “Medicare Select issuer” means an issuer offering, or seeking to offer, a Medicare Select contract. (4) “Medicare Select contract” means a Medicare supplement contract that contains restricted network provisions. (5) “Network provider” means a provider of health care, or a group of providers of health care, which has entered into a written agreement with the issuer to provide benefits covered under a Medicare Select contract. “Provider network” means a grouping of network providers. (6) “Restricted network provision” means any provision which conditions the payment of benefits, in whole or in part, on the use of network providers. (7) “Service area” means the geographic area approved by the director within which an issuer is authorized to offer a Medicare Select contract. (c) The director may authorize an issuer to offer a Medicare Select contract pursuant to Section 4358 of the federal Omnibus Budget Reconciliation Act (OBRA) of 1990 if the director finds that the issuer’s Medicare Select contracts are in compliance with this chapter and if the director finds that the issuer has satisfied all of the requirements of this section. (d) A Medicare Select issuer shall not issue a Medicare Select contract in this state until its plan of operation has been approved by the director. (e) A Medicare Select issuer shall file a proposed plan of operation with the director in a format prescribed by the director. The plan of operation shall contain at least the following information: (1) Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration of all of the following: (A) That services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation, and afterhour care. The hours of operation and availability of afterhour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual travel times within the community. (B) That the number of network providers in the service area is sufficient, with respect to current and expected enrollees, as to either of the following: (i) To deliver adequately all services that are subject to a restricted network provision. (ii) To make appropriate referrals. (C) There are written agreements with network providers describing specific responsibilities. (D) Emergency care is available 24 hours per day and seven days per week. (E) In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, that there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual covered under a Medicare Select contract. This subparagraph shall not apply to supplemental charges or coinsurance amounts as stated in the Medicare Select contract. (2) A statement or map providing a clear description of the service area. (3) A description of the grievance procedure to be utilized. (4) A description of the quality assurance program, including all of the following: (A) The formal organizational structure. (B) The written criteria for selection, retention, and removal of network providers. (C) The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted. (5) A list and description, by specialty, of the network providers. (6) Copies of the written information proposed to be used by the issuer to comply with subdivision (i). (7) Any other information requested by the director. (f) (1) A Medicare Select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the director prior to implementing the changes. Changes shall be considered approved by the director after 30 days unless specifically disapproved. (2) An updated list of network providers shall be filed with the director at least quarterly. (g) A Medicare Select contract shall not restrict payment for covered services provided by nonnetwork providers if: (1) The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury, or condition. (2) It is not reasonable to obtain services through a network provider. (h) A Medicare Select contract shall provide payment for full coverage under the contract for covered services that are not available through network providers. (i) A Medicare Select issuer shall make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare Select contract to each applicant. This disclosure shall include at least the following: (1) An outline of coverage sufficient to permit the applicant to compare the coverage and charges of the Medicare Select contract with both of the following: (A) Other Medicare supplement contracts offered by the issuer. (B) Other Medicare Select contracts. (2) A description, including address, telephone number, and hours of operation, of the network providers, including primary care physicians, specialty physicians, hospitals, and other providers. (3) A description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized. The description shall inform the applicant that expenses incurred when using out-of-network providers are excluded from the out-of-pocket annual limit in benefit plans K and L, unless the contract provides otherwise. (4) A description of coverage for emergency and urgently needed care and other out-of-service area coverage. (5) A description of limitations on referrals to restricted network providers and to other providers. (6) A description of the enrollee’s rights to purchase any other Medicare supplement contract otherwise offered by the issuer. (7) A description of the Medicare Select issuer’s quality assurance program and grievance procedure. (j) Prior to the sale of a Medicare Select contract, a Medicare Select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to subdivision (i) and that the applicant understands the restrictions of the Medicare Select contract. (k) A Medicare Select issuer shall have and use procedures for hearing complaints and resolving written grievances from the enrollees. The procedures shall be aimed at mutual agreement for settlement and may include arbitration procedures. (1) The grievance procedure shall be described in the contract and in the outline of coverage. (2) At the time the contract is issued, the issuer shall provide detailed information to the enrollee describing how a grievance may be registered with the issuer. (3) Grievances shall be considered in a timely manner and shall be transmitted to appropriate decisionmakers who have authority to fully investigate the issue and take corrective action. (4) If a grievance is found to be valid, corrective action shall be taken promptly. (5) All concerned parties shall be notified about the results of a grievance. (6) The issuer shall report no later than each March 31st to the director regarding its grievance procedure. The report shall be in a format prescribed by the director and shall contain the number of grievances filed in the past year and a summary of the subject, nature, and resolution of those grievances. (l) At the time of initial purchase, a Medicare Select issuer shall make available to each applicant for a Medicare Select contract the opportunity to purchase any Medicare supplement contract otherwise offered by the issuer. (m) (1) At the request of an enrollee under a Medicare Select contract, a Medicare Select issuer shall make available to the enrollee the opportunity to purchase a Medicare supplement contract offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision, if a Medicare supplement contract of that nature is offered by the issuer. The issuer shall make the contracts available without regard to the health status of the enrollee and without requiring evidence of insurability after the Medicare Select contract has been in force for six months. (2) For the purposes of this subdivision, a Medicare supplement contract will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select contract being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Medicare Part B excess charges. (n) Medicare Select contracts shall provide for continuation of coverage in the event the secretary determines that Medicare Select contracts issued pursuant to this section should be discontinued due to either the failure of the Medicare Select program to be reauthorized under law or its substantial amendment. (1) Each Medicare Select issuer shall make available to each enrollee covered by a Medicare Select contract the opportunity to purchase any Medicare supplement contract offered by the issuer that has comparable or lesser benefits and that does not contain a restricted provider network provision, if a Medicare supplement contract of that nature is offered by the issuer. The issuer shall make the contracts available without regard to the health status of the enrollee and without requiring evidence of insurability after the Medicare Select contract has been in force for six months. (2) For the purposes of this subdivision, a Medicare supplement contract will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select contract being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Medicare Part B excess charges. (o) An issuer offering Medicare Select contracts shall comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services, for the purpose of evaluating the Medicare Select program. An issuer shall not issue a Medicare Select contract in this state until the contract has been approved by the director. (Amended by Stats. 2005, Ch. 206, Sec. 6. Effective January 1, 2006.)
  103. 1358.11.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Issuers must offer certain Medicare supplement plans and cannot deny, condition, or price coverage based on health status or similar factors in the situations described. The section also gives several people open enrollment rights and requires notices in some cases.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.11. (a) (1) An issuer shall not deny or condition the offering or effectiveness of any Medicare supplement contract available for sale in this state, nor discriminate in the pricing of a contract because of the health status, claims experience, receipt of health care, or medical condition of an applicant in the case of an application for a contract that is submitted prior to or during the six-month period beginning with the first day of the first month in which an individual is both 65 years of age or older and is enrolled for benefits under Medicare Part B. Each Medicare supplement contract currently available from an issuer shall be made available to all applicants who qualify under this subdivision and who are 65 years of age or older. (2) (A) An issuer shall make available Medicare supplement benefit plans A, B, C, and F, if currently available, to an applicant who qualifies under this subdivision, who is 64 years of age or younger, and who does not have end-stage renal disease. An issuer shall also make available to those applicants Medicare supplement benefit plan K or L, if currently available, or Medicare supplement benefit plan M or N, if currently available. The selection between Medicare supplement benefit plan K or L and the selection between Medicare supplement benefit plan M or N shall be made at the issuer’s discretion. (B) For contracts sold or issued on or after January 1, 2020, to newly eligible Medicare beneficiaries, as defined in subdivision (b) of Section 1358.92, an issuer shall make available Medicare supplement benefit plans A, B, D, and G, if currently available, to applicants who qualify under this subdivision who are 64 years of age or younger and who do not have end-stage renal disease. An issuer shall also make available to those applicants Medicare supplement benefit plan K or L, if currently available, or Medicare supplement benefit plan M or N, if currently available. The selection between Medicare supplement benefit plan K or L and the selection between Medicare supplement benefit plan M or N shall be made at the issuer’s discretion. (3) This section and Section 1358.12 do not prohibit an issuer in determining subscriber rates from treating applicants who are under 65 years of age and are eligible for Medicare Part B as a separate risk classification. (b) (1) If an applicant qualifies under subdivision (a) and submits an application during the time period referenced in subdivision (a) and, as of the date of application, has had a continuous period of creditable coverage of at least six months, the issuer shall not exclude benefits based on a preexisting condition. (2) If the applicant qualifies under subdivision (a) and submits an application during the time period referenced in subdivision (a) and, as of the date of application, has had a continuous period of creditable coverage that is less than six months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. The manner of the reduction under this subdivision shall be as specified by the director. (c) Except as provided in subdivision (b) and Section 1358.23, subdivision (a) does not prevent the exclusion of benefits under a contract, during the first six months, based on a preexisting condition for which the enrollee received treatment or was otherwise diagnosed during the six months before the coverage became effective. (d) An individual enrolled in Medicare by reason of disability shall be entitled to open enrollment described in this section for six months after the date of their enrollment in Medicare Part B, or if notified retroactively of their eligibility for Medicare, for six months following notice of eligibility. Sales during the open enrollment period shall not be discouraged by any means, including the altering of the commission structure. (e) (1) An individual enrolled in Medicare Part B is entitled to open enrollment described in this section for six months following: (A) Receipt of a notice of termination or, if no notice is received, the effective date of termination from any employer-sponsored health plan including an employer-sponsored retiree health plan. (B) Receipt of a notice of loss of eligibility due to the divorce or death of a spouse or, if no notice is received, the effective date of loss of eligibility due to the divorce or death of a spouse, from any employer-sponsored health plan including an employer-sponsored retiree health plan. (C) Termination of health care services for a military retiree or the retiree’s Medicare eligible spouse or dependent as a result of a military base closure or loss of access to health care services because the base no longer offers services or because the individual relocates. (2) For purposes of this subdivision, “employer-sponsored retiree health plan” includes any coverage for medical expenses, including coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and the California Continuation Benefits Replacement Act (Cal-COBRA), that is directly or indirectly sponsored or established by an employer for employees or retirees, their spouses, dependents, or other included covered persons. (f) An individual enrolled in Medicare Part B is entitled to open enrollment described in this section if the individual was covered under a policy, certificate, or contract providing Medicare supplement coverage but that coverage terminated because the individual established residence at a location not served by the issuer. (g) (1) An individual whose coverage was terminated by a Medicare Advantage plan shall be entitled to an additional 60-day open enrollment period to be added on to and run consecutively after any open enrollment period authorized by federal law or regulation, for any and all Medicare supplement coverage available on a guaranteed basis under state and federal law or regulations for persons terminated by their Medicare Advantage plan. (2) Health plans that terminate Medicare enrollees shall notify those enrollees in the termination notice of the additional open enrollment period authorized by this subdivision. Health plan notices shall inform enrollees of the opportunity to secure advice and assistance from the HICAP in their area, along with the toll-free telephone number for HICAP. (h) (1) An individual shall be entitled to an annual open enrollment period lasting 60 days or more, commencing with the individual’s birthday, during which time that person may purchase any Medicare supplement coverage that offers benefits equal to or lesser than those provided by the previous coverage. During this open enrollment period, an issuer that falls under this paragraph shall not deny or condition the issuance or effectiveness of Medicare supplement coverage, nor discriminate in the pricing of coverage, because of health status, claims experience, receipt of health care, or medical condition of the individual if, at the time of the open enrollment period, the individual is covered under another Medicare supplement policy, certificate, or contract. An issuer that offers Medicare supplement contracts shall notify an enrollee of their rights under this subdivision at least 30 and no more than 60 days before the beginning of the open enrollment period, and on any notice related to a benefit modification or premium adjustment. (2) For purposes of this subdivision, the following provisions apply: (A) A 1990 standardized Medicare supplement benefit plan A shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan A. (B) A 1990 standardized Medicare supplement benefit plan B shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan B. (C) A 1990 standardized Medicare supplement benefit plan C shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan C. (D) A 1990 standardized Medicare supplement benefit plan D shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan D. (E) A 1990 standardized Medicare supplement benefit plan E shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare benefit plan D. (F) (i) A 1990 standardized Medicare supplement benefit plan F shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare benefit plan F. (ii) A 1990 standardized Medicare supplement benefit high deductible plan F shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit high deductible plan F. (G) A 1990 standardized Medicare supplement benefit plan G shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan G. (H) A 1990 standardized Medicare supplement benefit plan H shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan D. (I) A 1990 standardized Medicare supplement benefit plan I shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan G. (J) (i) A 1990 standardized Medicare supplement benefit plan J shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan F. (ii) A 1990 standardized Medicare supplement benefit high deductible plan J shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit high deductible plan F. (K) A 1990 standardized Medicare supplement benefit plan K shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan K. (L) A 1990 standardized Medicare supplement benefit plan L shall be deemed to offer benefits equal to those provided by a 2010 standardized Medicare supplement benefit plan L. (M) New or innovative benefits, as described in subdivision (f) of Section 1358.9 and subdivision (f) of Section 1358.91, shall not be included when determining whether benefits are equal to or lesser than those provided by the previous coverage. (i) An individual enrolled in Medicare Part B is entitled to open enrollment described in this section upon being notified that, because of an increase in the individual’s income or assets, they meet one of the following requirements: (1) They are no longer eligible for Medi-Cal benefits. (2) They are only eligible for Medi-Cal benefits with a share of cost and certifies at the time of application that they have not met the share of cost. (Amended (as amended by Stats. 2019, Ch. 157, Sec. 3) by Stats. 2019, Ch. 549, Sec. 2. (SB 407) Effective January 1, 2020.)
  104. 1358.12.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section requires issuers to provide guaranteed issue Medicare supplement coverage to eligible people and bars certain denials, pricing discrimination, and preexisting-condition exclusions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.12. (a) (1) With respect to the guaranteed issue of a Medicare supplement contract, eligible persons are those individuals described in subdivision (b) who seek to enroll under the contract during the period specified in subdivision (c), and who submit evidence of the date of termination or disenrollment or enrollment in Medicare Part D with the application for a Medicare supplement contract. (2) With respect to eligible persons, an issuer shall not take any of the following actions: (A) Deny or condition the issuance or effectiveness of a Medicare supplement contract described in subdivision (e) that is offered and is available for issuance to new enrollees by the issuer. (B) Discriminate in the pricing of that Medicare supplement contract because of health status, claims experience, receipt of health care, or medical condition. (C) Impose an exclusion of benefits based on a preexisting condition under that Medicare supplement contract. (b) An eligible person is an individual described in any of the following paragraphs: (1) The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare and either of the following applies: (A) The plan either terminates or ceases to provide all of those supplemental health benefits to the individual. (B) The employer no longer provides the individual with insurance that covers all of the payment for the 20-percent coinsurance. (2) The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, and any of the following circumstances apply: (A) The certification of the organization or plan has been terminated. (B) The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides. (C) The individual is no longer eligible to elect the plan because of a change in the individual’s place of residence or other change in circumstances specified by the secretary. Those changes in circumstances shall not include termination of the individual’s enrollment on the basis described in Section 1851(g)(3)(B) of the federal Social Security Act where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under Section 1856 of the federal Social Security Act, or the plan is terminated for all individuals within a residence area. (D) (i) The Medicare Advantage plan in which the individual is enrolled reduces any of its benefits or increases the amount of cost sharing or premium or discontinues for other than good cause relating to quality of care, its relationship or contract under the plan with a provider who is currently furnishing services to the individual. An individual shall be eligible under this subparagraph for a Medicare supplement contract issued by the same issuer through which the individual was enrolled at the time the reduction, increase, or discontinuance described above occurs or, commencing January 1, 2007, for one issued by a subsidiary of the parent company of that issuer or by a network that contracts with the parent company of that issuer. If no Medicare supplement contract is available to the individual from the same issuer, a subsidiary of the parent company of the issuer, or a network that contracts with the parent company of the issuer, the individual shall be eligible for a Medicare supplement contract pursuant to paragraph (1) of subdivision (e) issued by any issuer, if the Medicare Advantage plan in which the individual is enrolled does any of the following: (I) Increases the premium by 15 percent or more. (II) Increases physician, hospital, or drug copayments by 15 percent or more. (III) Reduces any benefits under the plan. (IV) Discontinues, for other than good cause relating to quality of care, its relationship or contract under the plan with a provider who is currently furnishing services to the individual. (ii) Enrollment in a Medicare supplement contract from an issuer unaffiliated with the issuer of the Medicare Advantage plan in which the individual is enrolled shall be permitted only during the annual election period for a Medicare Advantage plan, except where the Medicare Advantage plan has discontinued its relationship with a provider currently furnishing services to the individual. Nothing in this section shall be construed to authorize an individual to enroll in a group Medicare supplement policy if the individual does not meet the eligibility requirements for the group. (E) The individual demonstrates, in accordance with guidelines established by the secretary, either of the following: (i) The organization offering the plan substantially violated a material provision of the organization’s contract under this article in relation to the individual, including the failure to provide on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide the covered care in accordance with applicable quality standards. (ii) The organization, or agent or other entity acting on the organization’s behalf, materially misrepresented the plan’s provisions in marketing the plan to the individual. (F) The individual meets other exceptional conditions as the secretary may provide. (3) The individual is 65 years of age or older, is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under Section 1894 of the federal Social Security Act, and circumstances similar to those described in paragraph (2) exist that would permit discontinuance of the individual’s enrollment with the provider, if the individual were enrolled in a Medicare Advantage plan. (4) The individual meets both of the following conditions: (A) The individual is enrolled with any of the following: (i) An eligible organization under a contract under Section 1876 of the federal Social Security Act (Medicare cost). (ii) A similar organization operating under demonstration project authority, effective for periods before April 1, 1999. (iii) An organization under an agreement under Section 1833(a)(1)(A) of the federal Social Security Act (health care prepayment plan). (iv) An organization under a Medicare Select policy. (B) The enrollment ceases under the same circumstances that would permit discontinuance of an individual’s election of coverage under paragraph (2) or (3). (5) The individual is enrolled under a Medicare supplement contract, and the enrollment ceases because of any of the following circumstances: (A) The insolvency of the issuer or bankruptcy of the nonissuer organization, or other involuntary termination of coverage or enrollment under the contract. (B) The issuer of the contract substantially violated a material provision of the contract. (C) The issuer, or an agent or other entity acting on the issuer’s behalf, materially misrepresented the contract’s provisions in marketing the contract to the individual. (6) The individual meets both of the following conditions: (A) The individual was enrolled under a Medicare supplement contract and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, any eligible organization under a contract under Section 1876 of the federal Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under Section 1894 of the federal Social Security Act, or a Medicare Select policy. (B) The subsequent enrollment under subparagraph (A) is terminated by the individual during any period within the first 12 months of the subsequent enrollment (during which the enrollee is permitted to terminate the subsequent enrollment under Section 1851(e) of the federal Social Security Act). (7) The individual upon first becoming eligible for benefits under Medicare Part A at 65 years of age, enrolls in a Medicare Advantage plan under Medicare Part C or with a PACE provider under Section 1894 of the federal Social Security Act, and disenrolls from the plan or program not later than 12 months after the effective date of enrollment. (8) The individual while enrolled under a Medicare supplement contract that covers outpatient prescription drugs enrolls in a Medicare Part D plan during the initial enrollment period, terminates enrollment in the Medicare supplement contract, and submits evidence of enrollment in Medicare Part D along with the application for a contract described in paragraph (4) of subdivision (e). (c) (1) In the case of an individual described in paragraph (1) of subdivision (b), the guaranteed issue period begins on the later of the following two dates and ends on the date that is 63 days after the date the applicable coverage terminated: (A) The date the individual receives a notice of termination or cessation of all supplemental health benefits or, if no notice is received, the date of the notice denying a claim because of a termination or cessation of benefits. (B) The date that the applicable coverage terminates or ceases. (2) In the case of an individual described in paragraphs (2), (3), (4), (6), and (7) of subdivision (b) whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated. (3) In the case of an individual described in subparagraph (A) of paragraph (5) of subdivision (b), the guaranteed issue period begins on the earlier of the following two dates and ends on the date that is 63 days after the date the coverage is terminated: (A) The date that the individual receives a notice of termination, a notice of the issuer’s bankruptcy or insolvency, or other similar notice if any. (B) The date that the applicable coverage is terminated. (4) In the case of an individual described in paragraph (2), (3), (6), or (7) of, or in subparagraph (B) or (C) of paragraph (5) of, subdivision (b) who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date of the disenrollment. (5) In the case of an individual described in paragraph (8) of subdivision (b), the guaranteed issue period begins on the date the individual receives notice pursuant to Section 1882(v)(2)(B) of the federal Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial enrollment period for Medicare Part D and ends on the date that is 63 days after the effective date of the individual’s coverage under Medicare Part D. (6) In the case of an individual described in subdivision (b) who is not included in this subdivision, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date of disenrollment. (d) (1) In the case of an individual described in paragraph (6) of subdivision (b), or deemed to be so described pursuant to this paragraph, whose enrollment with an organization or provider described in subparagraph (A) of paragraph (6) of subdivision (b) is involuntarily terminated within the first 12 months of enrollment and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in paragraph (6) of subdivision (b). (2) In the case of an individual described in paragraph (7) of subdivision (b), or deemed to be so described pursuant to this paragraph, whose enrollment with a plan or in a program described in paragraph (7) of subdivision (b) is involuntarily terminated within the first 12 months of enrollment and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in paragraph (7) of subdivision (b). (3) For purposes of paragraphs (6) and (7) of subdivision (b), an enrollment of an individual with an organization or provider described in subparagraph (A) of paragraph (6) of subdivision (b), or with a plan or in a program described in paragraph (7) of subdivision (b), shall not be deemed to be an initial enrollment under this paragraph after the two-year period beginning on the date on which the individual first enrolled with such an organization, provider, plan, or program. (e) (1) Under paragraphs (1), (2), (3), (4), and (5) of subdivision (b), an eligible individual is entitled to a Medicare supplement contract that has a benefit package classified as Plan A, B, C, F (including a high deductible Plan F), K, L, M, or N offered by any issuer. (2) (A) Under paragraph (6) of subdivision (b), an eligible individual is entitled to the same Medicare supplement contract in which he or she was most recently enrolled, if available from the same issuer. If that contract is not available, the eligible individual is entitled to a Medicare supplement contract that has a benefit package classified as Plan A, B, C, F (including a high deductible Plan F), K, L, M, or N offered by any issuer. (B) On and after January 1, 2006, an eligible individual described in this paragraph who was most recently enrolled in a Medicare supplement contract with an outpatient prescription drug benefit, is entitled to a Medicare supplement contract that is available from the same issuer but without an outpatient prescription drug benefit or, at the election of the individual, has a benefit package classified as a Plan A, B, C, F (including high deductible Plan F), K, L, M, or N that is offered by any issuer. (3) Under paragraph (7) of subdivision (b), an eligible individual is entitled to any Medicare supplement contract offered by any issuer. (4) Under paragraph (8) of subdivision (b), an eligible individual is entitled to a Medicare supplement contract that has a benefit package classified as Plan A, B, C, F (including a high deductible Plan F), K, L, M, or N and that is offered and is available for issuance to a new enrollee by the same issuer that issued the individual’s Medicare supplement contract with outpatient prescription drug coverage. (f) (1) At the time of an event described in subdivision (b) by which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy or contract, or the administrator of the plan being terminated, respectively, shall notify the individual of his or her rights under this section and of the obligations of issuers of Medicare supplement contracts under subdivision (a). The notice shall be communicated contemporaneously with the notification of termination. (2) At the time of an event described in subdivision (b) by which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy or contract, or the administrator of the plan, respectively, shall notify the individual of his or her rights under this section, and of the obligations of issuers of Medicare supplement contracts under subdivision (a). The notice shall be communicated within 10 working days of the date the issuer received notification of disenrollment. (g) An issuer shall refund any unearned premium that an enrollee or subscriber paid in advance and shall terminate coverage upon the request of an enrollee or subscriber. (Amended by Stats. 2011, Ch. 270, Sec. 2. (AB 151) Effective January 1, 2012.)
  105. 1358.13.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    An issuer must follow specified Medicare supplemental contract procedures, including accepting certain Medicare Administrative Contractor notices, notifying affected parties, paying providers directly, giving enrollees a card at enrollment, paying user fees, and sending an annual mailing address to the secretary.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.13. (a) An issuer shall comply with Section 1882(c)(3) of the federal Social Security Act (as enacted by Section 4081(b)(2)(C) of the federal Omnibus Budget Reconciliation Act of 1987 (OBRA), Public Law 100-203) by doing all of the following: (1) Accepting a notice from a Medicare Administrative Contractor, formerly known as a fiscal intermediary or carrier, on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice. (2) Notifying the participating physician or supplier and the beneficiary of the payment determination. (3) Paying the participating physician or supplier directly. (4) Furnishing, at the time of enrollment, each enrollee with a card listing the contract name, number, and a central mailing address to which notices respecting coverage from a Medicare Administrative Contractor may be sent. (5) Paying user fees established under Section 1395u(h)(3)(B) of Title 42 of the United States Code, for claim notices that are transmitted electronically or otherwise. (6) Providing to the secretary, at least annually, a central mailing address to which all claims may be sent by Medicare Administrative Contractors. (b) Compliance with the requirements set forth in subdivision (a) shall be certified on the Medicare supplement insurance experience reporting form provided by the director. (Amended by Stats. 2009, Ch. 10, Sec. 9. Effective July 2, 2009.)
  106. 1358.14.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Medicare supplement contracts must meet loss-ratio standards, and issuers must file annual rate data and make required refunds, credits, or charge adjustments.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.14. (a) (1) (A) With respect to loss ratio standards, a Medicare supplement contract shall not be advertised, solicited, or issued for delivery unless the contract can be expected, as estimated for the entire period for which prepaid or periodic charges are computed to provide coverage, to return to subscribers and enrollees in the form of aggregate benefits under the contract, not including anticipated refunds or credits provided under the contract, at least 75 percent of the aggregate amount of charges earned in the case of group contracts, or at least 65 percent of the aggregate amount of charges earned in the case of individual contracts, on the basis of incurred claims or costs of health care services experience and earned prepaid or periodic charges for that period and in accordance with accepted actuarial principles and practices. (B) Loss ratio standards shall be calculated on the basis of incurred health care expenses where coverage is provided by a health care service plan on a service rather than reimbursement basis, and earned prepaid or periodic charges shall be calculated for the period and in accordance with accepted actuarial principles and practices. Incurred health care expenses where coverage is provided by a health care service plan shall not include any of the following: (i) Home office and overhead costs. (ii) Advertising costs. (iii) Commissions and other acquisition costs. (iv) Taxes. (v) Capital costs. (vi) Administrative costs. (vii) Claims processing costs. (2) All filings of rates and rating schedules shall demonstrate that expected claims in relation to prepaid or periodic charges comply with the requirements of this section when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards. (3) For purposes of applying paragraph (1) of subdivision (a) and paragraph (3) of subdivision (d) of Section 1358.15 only, contracts issued as a result of solicitations of individuals through the mail or by mass media advertising, including both print and broadcast advertising, shall be deemed to be individual contracts. (b) (1) With respect to refund or credit calculations, an issuer shall collect and file with the director by May 31 of each year the data contained in the applicable reporting form required by the director (NAIC Appendix A) for each type of coverage in a standard Medicare supplement benefit plan. (2) If on the basis of the experience as reported the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation shall be done on a statewide basis for each type of contract offered by the issuer. For purposes of the refund or credit calculation, experience on contracts issued within the reporting year shall be excluded. (3) For the purposes of this section, with respect to contracts advertised, solicited, or issued for delivery prior to January 1, 2001, the issuer shall make the refund or credit calculation separately for all individual contracts, including all group contracts subject to an individual loss ratio standard when issued, combined and all other group contracts combined for experience after January 1, 2001. The first report pursuant to paragraph (1) shall be due by May 31, 2003. (4) A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds ten dollars ($10). The refund shall include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the secretary, but in no event shall it be less than the average rate of interest for 13-week Treasury notes. A refund or credit against prepaid or periodic charges due shall be made by September 30 following the experience year upon which the refund or credit is based. (c) An issuer of Medicare supplement contracts shall file annually its prepaid or periodic charges and supporting documentation including ratios of incurred losses to earned prepaid or periodic charges by contract duration for approval by the director in accordance with the filing requirements and procedures prescribed by the director. The supporting documentation shall also demonstrate in accordance with actuarial standards of practice using reasonable assumptions that the appropriate loss ratio standards can be expected to be met over the entire period for which charges are computed. The demonstration shall exclude active life reserves. An expected third-year loss ratio that is greater than or equal to the applicable percentage shall be demonstrated for contracts in force less than three years. As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, every issuer of Medicare supplement contracts shall file with the director, in accordance with applicable filing procedures, all of the following: (1) (A) Appropriate prepaid or periodic charge adjustments necessary to produce loss ratios as anticipated for the current charge for the applicable contracts. The supporting documents necessary to justify the adjustment shall accompany the filing. (B) An issuer shall make prepaid or periodic charge adjustments necessary to produce an expected loss ratio under the contract to conform to minimum loss ratio standards for Medicare supplement contracts and that are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current charges by the issuer for the Medicare supplement contracts. No charge adjustment that would modify the loss ratio experience under the contract other than the adjustments described in this section shall be made with respect to a contract at any time other than upon its renewal date or anniversary date. (C) If an issuer fails to make prepaid or periodic charge adjustments acceptable to the director, the director may order charge adjustments, refunds, or credits deemed necessary to achieve the loss ratio required by this section. (2) Any appropriate contract amendments needed to accomplish the Medicare supplement contract modifications necessary to eliminate benefit duplications with Medicare. The contract amendments shall provide a clear description of the Medicare supplement benefits provided by the contract. (d) (1) The director may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a contract form issued before or after the effective date of January 1, 2001, if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for the reporting period. Public notice of the hearing shall be furnished in a manner deemed appropriate by the director. (2) The director may conduct a public hearing to gather information if the experience of the form filed under paragraph (1) of subdivision (b) for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for the reporting period. Public notice of the hearing shall be furnished in a manner deemed appropriate by the director. (Amended by Stats. 2005, Ch. 206, Sec. 10. Effective January 1, 2006.)
  107. 1358.145.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Issuers must send the department their loss-ratio calculations, and the director may require added actuarial certification.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.145. (a) The calculation of actual or expected loss ratios shall be pursuant to the formula in subdivision (a) of Section 1358.14, and pursuant to definitions, procedures, and other provisions as may be deemed by the director, with due consideration of the circumstances of the particular issuer, to be fair, reasonable, and consistent with the objectives of this chapter. (b) Each issuer shall submit to the department a copy of the calculations for the actual or expected loss ratio as required by Section 1358.14. The calculations shall include the following data: the actual loss ratio for the entire period in which the contract has been in force, as well as for the immediate past three years and for each year in which the contract has been in force, the scale of prepaid or periodic charges for the loss ratio calculation period, a description of all assumptions, the formula used to calculate gross prepaid or periodic charges, the expected level of earned prepaid or periodic charges in the loss ratio calculation period, and the expected level of incurred claims for reimbursement, including paid claims and incurred but not paid claims, in the loss ratio calculation period. The calculations shall be accompanied by an actuarial certification, consisting of a signed declaration of an actuary who is a member in good standing of the American Academy of Actuaries in which the actuary states that the assumptions used in calculating the expected loss ratio are appropriate and reasonable, taking into account that the calculations are in accordance with the provisions of subdivision (a) and the provisions referred to therein. In addition, the director may require the issuer to submit actuarial certification, as described above, by one or more unaffiliated actuaries acceptable to the director. (c) Notwithstanding the calculations required by subdivision (b), contracts shall be deemed to comply with the loss ratio standards if, and shall be deemed not to comply with the loss standards unless: (1) for the most recent year, the ratio of the incurred losses to earned prepaid charges for contracts that have been in force for three years or more is greater than or equal to the applicable percentages contained in this section; and (2) the expected losses in relation to charges over the entire period for which the contract is rated comply with the requirements of this section. An expected third-year loss ratio that is greater than or equal to the applicable percentage shall be demonstrated for contracts in force less than three years. (Added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  108. 1358.146.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Health care service plans must use the specified exhibit format to report loss ratio experience and file the exhibit by June 30 after the related Section 1358.14 filing.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.146. The following format shall be used for reporting loss ratio experience: MEDICARE SUPPLEMENT HEALTH CARE SERVICE PLAN CONTRACT EXPERIENCE EXHIBIT For the year ended December 31, 20__. For the State of California. Of the ____ health care service plan. Address (City, State, and Zip Code) ____ Person Completing this Exhibit ____ To be filed by June 30th following the filing under Section 1358.14 of the Health and Safety Code. Costs for Health Care Services Prepaid or Percentage Periodic of Prepaid Charges or Periodic Classification Earned Amount Charges Earned Experience on Individual Plan Contracts 1. _____ Contracts issued _____ through 20__ _____ Reporting State _____ Nationwide 2. _____ Contracts issued _____ after 20__ _____ Reporting State _____ Nationwide Experience on Group Plan Contracts 1. _____ Contracts Issued _____ through 20__ _____ Reporting State _____ Nationwide 2. _____ Contracts Issued _____ after 20__ _____ Reporting State _____ Nationwide The undersigned officer hereby certifies that the company named above has complied with the requirements contained in the federal Omnibus Budget Reconciliation Act of 1987, Section 4081. Signature Title and name (please type) ## INSTRUCTIONS FOR COMPLETING MEDICARE SUPPLEMENT HEALTH CARE SERVICE PLAN CONTRACT EXPERIENCE EXHIBIT 1. Experience on plan contracts issued more than three years prior to the reporting year should be shown separately as indicated on the form. For example, for the reporting year ended 12/31/88 (filed on June 30, 1989), experience on plan contracts issued in 1985 and prior should be shown separately from that of plan contracts issued in 1986 and later. For group coverage, the year of issue should be based on when the contract was issued if available; otherwise use the master plan contract year of issue. 2. Allocation of reserves on a state-by-state basis should be on sound actuarial principles and be consistent from year to year. 3. Membership or plan contract fees, if any, constitute, and should be included with, prepaid or periodic charges earned. Earned prepaid or periodic charges may be shown on an annual basis net of loadings for nonannual modes. 4. Mass marketing group coverage subject to individual loss ratio standards should be included with individual plan contracts. 5. Any dividends paid to subscribers should be included with costs for health care. 6. Neither costs for health care services nor earned prepaid or periodic charges should be adjusted for changes in plan contract (additional) reserves. ## DEFINITIONS For purposes of this form: 1. “Costs for health care services” means payment for health care services plus the increase in claim reserves. Claim reserves include only those unpaid liabilities for claims that have already been incurred. Costs for health care services in this exhibit do not include plan contract additional reserves. (Added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  109. 1358.15.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Issuers generally may not advertise, sell, issue, or change charges for Medicare supplement contracts unless the contract or charges have been filed with and approved by the director.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.15. (a) An issuer shall not advertise, solicit, or issue for delivery a Medicare supplement contract to a resident of this state unless the contract has been filed with and approved by the director in accordance with filing requirements and procedures prescribed by the director. Until January 1, 2001, or 90 days after approval of Medicare supplement contracts submitted for approval pursuant to this section, whichever is later, issuers may continue to offer and market previously approved Medicare supplement contracts. (b) An issuer shall file any riders or amendments to contract forms to delete outpatient prescription drug benefits, as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173), only in the state where the contract was issued. (c) An issuer shall not use or change prepaid or periodic charges for a Medicare supplement contract unless the charges and supporting documentation have been filed with and approved by the director in accordance with the filing requirements and procedures prescribed by the director. (d) (1) Except as provided in paragraph (2), an issuer shall not file for approval more than one contract of each type for each standard Medicare supplement benefit plan. (2) An issuer may offer, with the approval of the director, up to four additional contracts of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases: (A) The inclusion of new or innovative benefits. (B) The addition of either direct response or agent marketing methods. (C) The addition of either guaranteed issue or underwritten coverage. (D) The offering of coverage to individuals eligible for Medicare by reason of disability. (3) For the purposes of this section, a “type” means an individual contract, a group contract, an individual Medicare Select contract, or a group Medicare Select contract. (e) (1) Except as provided in subdivision (a), an issuer shall continue to make available for purchase any contract issued after January 1, 2001, that has been approved by the director. A contract shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months. (A) An issuer may discontinue the availability of a contract if the issuer provides to the director in writing its decision at least 30 days prior to discontinuing the availability of the form of the contract. After receipt of the notice by the director, the issuer shall no longer offer for sale the contract in this state. (B) An issuer that discontinues the availability of a contract pursuant to subparagraph (A) shall not file for approval a new contract of the same type for the same standard Medicare supplement benefit plan as the discontinued contract for a period of five years after the issuer provides notice to the director of the discontinuance. The period of discontinuance may be reduced if the director determines that a shorter period is appropriate. (2) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this section. (3) A change in the rating structure or methodology shall be considered a discontinuance under paragraph (1) unless the issuer complies with the following requirements: (A) The issuer provides an actuarial memorandum, in a form and manner prescribed by the director, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates. (B) The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The director may approve a change to the differential that is in the public interest. (f) (1) Except as provided in paragraph (2), the experience of all contracts of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in Section 1358.14. (2) Contracts assumed under an assumption reinsurance agreement shall not be combined with the experience of other contracts for purposes of the refund or credit calculation. (g) A Medicare supplement contract shall be deemed not to be fair, just, or consistent with the objectives of this chapter at all times, and shall not be advertised, solicited, or issued for delivery at any time, except during that period of time, if any, beginning with the date of receipt by the plan of notification by the director that the provisions of the contract are deemed to be fair, just, and consistent with the objectives of this chapter, and ending with the earlier to occur of the events indicated in subdivision (h). (h) The period of time indicated in subdivision (g) shall terminate at the earlier to occur of (1) receipt by the plan of written revocation by the director of the immediate past notification referred to in subdivision (g) specifying the basis for the revocation, (2) the last day of the prepaid or periodic charge calculation period, that in no event may exceed one year, or (3) June 30, of the next succeeding calendar year. (i) An issuer shall secure the director’s review of a contract subject to this article by submitting, not less than 30 days prior to any proposed advertising or other use of the contract not already protected by a currently effective notice under subdivision (g), the following for the director’s review: (1) A copy of the contract. (2) A copy of the disclosure form. (3) A representation that the contract complies with the provisions of this chapter and the rules adopted thereunder. (4) A completed copy of the “Medicare Supplement Health Care Service Plan Contract Experience Exhibit” set forth in Section 1358.145. (5) A copy of the calculations for the actual or expected loss ratio. (6) Supporting data used in calculating the actual or expected loss ratio as indicated in Section 1358.14. (7) An actuarial certification, as specified in Section 1358.14, of the loss ratio computations. (8) If required by the director, actuarial certification, as specified in Section 1358.14, of the loss ratio computations by one or more unaffiliated actuaries acceptable to the director. (9) An undertaking by the issuer to notify the subscribers in writing within 60 days of decertification, if the contract is identified as a certified contract at the time of sale and later decertified. (10) A signed statement of the president of the issuer or other officer of the issuer designated by that person attesting that the information submitted for review is accurate and complete and does not misrepresent any material fact. (j) An issuer that submits information pursuant to subdivision (i) shall provide any additional information as may be requested by the director to enable the director to conclude that the contract complies with the provisions of this chapter and rules adopted thereunder. (k) For the purposes of this section, the term “decertified,” as applied to a contract, means that the director by written notice has found that the contract no longer complies with the provisions of this chapter and the rules adopted thereunder and has revoked the prior authorization to display on the contract the emblem indicating certification. (l) Benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible amount and copayment percentage factors and the amount of prepaid charges may be modified, as indicated in paragraph (6) of subdivision (a) of Section 1300.67.4 of Title 28 of the California Code of Regulations, to correspond with those changes. (Amended by Stats. 2005, Ch. 206, Sec. 11. Effective January 1, 2006.)
  110. 1358.16.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section limits commissions and other compensation on Medicare supplement contracts, especially in the first year and when a contract is replaced.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.16. (a) An issuer or other entity may provide a commission or other compensation to a solicitor or other representative for the sale of a Medicare supplement contract only if the first year commission or other first year compensation is no more than 200 percent of the commission or other compensation paid for selling or servicing the contract in the second year or period. (b) The commission or other compensation provided in subsequent renewal years shall be the same as that provided in the second year or period and shall be provided for no fewer than five renewal years. (c) No issuer shall provide compensation to a solicitor or solicitor firm, and no solicitor or solicitor firm shall receive compensation, greater than the renewal compensation payable by the replacing issuer on renewal contracts if an existing contract is replaced. (d) For purposes of this section, “commission” or “compensation” includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of the contract, including, but not limited to, bonuses, gifts, prizes, awards, and finders’ fees. (Amended by Stats. 2005, Ch. 206, Sec. 12. Effective January 1, 2006.)
  111. 1358.17.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Medicare supplement contracts must include required renewal and disclosure language, limit post-issue changes unless the subscriber agrees in writing or the law requires them, and give applicants and enrollees specified notices and coverage outlines.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.17. (a) (1) Medicare supplement contracts shall include a renewal or continuation provision. The language or specifications of the provision shall be consistent with subdivision (a) of Section 1365 and the rules adopted thereunder. The provision shall be appropriately captioned and shall appear on the first page of the contract, and shall include any reservation by the issuer of the right to change prepaid or periodic charges and any automatic renewal increases based on the enrollee’s age. (2) The contract shall contain the provisions required to be set forth by Section 1300.67.4 of Title 28 of the California Code of Regulations. (b) (1) Except for contract amendments by which the issuer effectuates a request made in writing by the enrollee, exercises a specifically reserved right under a Medicare supplement contract, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all amendments to a Medicare supplement contract after the date of issue or upon reinstatement or renewal that reduce or eliminate benefits or coverage in the contract shall require a signed acceptance by the subscriber. After the date of contract issue, any amendment that increases benefits or coverage with a concomitant increase in prepaid or periodic charges during the contract term shall be agreed to in writing signed by the subscriber, unless the benefits are required by the minimum standards for Medicare supplement contracts, or if the increased benefits or coverage is required by law. If a separate additional charge is made for benefits provided in connection with contract amendments, the charge shall be set forth in the contract. (2) An issuer shall not in any way reduce or eliminate any benefit or coverage under a Medicare supplement contract at any time after the date of entering the contract, including dates of reinstatement or renewal, unless and until the change is voluntarily agreed to in writing signed by the subscriber or enrollee, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits. The issuer shall not increase benefits or coverage with a concomitant increase in prepaid or periodic charges during the term of the contract unless and until the change is voluntarily agreed to in writing signed by the subscriber or enrollee or unless the increased benefits or coverage is required by law or regulation. (c) Medicare supplement contracts shall not provide for the payment of benefits based on standards described as “usual and customary,” “reasonable and customary,” or words of similar import. (d) If a Medicare supplement contract contains any limitations with respect to preexisting conditions, those limitations shall appear as a separate paragraph of the contract and be labeled as “Preexisting Condition Limitations.” (e) (1) Medicare supplement contracts shall have a notice prominently printed in no less than 10-point uppercase type, on the cover page of the contract or attached thereto stating that the applicant shall have the right to return the contract within 30 days of its receipt via regular mail, and to have any charges refunded in a timely manner if, after examination of the contract, the covered person is not satisfied for any reason. The return shall void the contract from the beginning, and the parties shall be in the same position as if no contract had been issued. (2) For purposes of this section, a timely manner shall be no later than 30 days after the issuer receives the returned contract. (3) If the issuer fails to refund all prepaid or periodic charges paid in a timely manner, then the applicant shall receive interest on the paid charges at the legal rate of interest on judgments as provided in Section 685.010 of the Code of Civil Procedure. The interest shall be paid from the date the issuer received the returned contract. (f) (1) Issuers of health care service plan contracts that provide hospital or medical expense coverage on an expense incurred or indemnity basis to persons eligible for Medicare shall provide to those applicants a guide to health insurance for people with Medicare in the form developed jointly by the National Association of Insurance Commissioners and the Centers for Medicare and Medicaid Services and in a type size no smaller than 12-point type. Delivery of the guide shall be made whether or not the contracts are advertised, solicited, or issued for delivery as Medicare supplement contracts as defined in this article. Except in the case of direct response issuers, delivery of the guide shall be made to the applicant at the time of application, and acknowledgment of receipt of the guide shall be obtained by the issuer. Direct response issuers shall deliver the guide to the applicant upon request, but not later than at the time the contract is delivered. (2) For the purposes of this section, “form” means the language, format, type size, type proportional spacing, bold character, and line spacing. (g) As soon as practicable, but no later than 30 days prior to the annual effective date of any Medicare benefit changes, an issuer shall notify its enrollees and subscribers of modifications it has made to Medicare supplement contracts in a format acceptable to the director. The notice shall include both of the following: (1) A description of revisions to the Medicare Program and a description of each modification made to the coverage provided under the Medicare supplement contract. (2) Inform each enrollee as to when any adjustment in prepaid or periodic charges is to be made due to changes in Medicare. (h) The notice of benefit modifications and any adjustments of prepaid or periodic charges shall be in outline form and in clear and simple terms so as to facilitate comprehension. (i) The notices shall not contain or be accompanied by any solicitation. (j) (1) Issuers shall provide an outline of coverage to all applicants at the time application is presented to the prospective applicant and, except for direct response policies, shall obtain an acknowledgment of receipt of the outline from the applicant. If an outline of coverage is provided at the time of application and the Medicare supplement contract is issued on a basis which would require revision of the outline, a substitute outline of coverage properly describing the contract shall accompany the contract when it is delivered and contain the following statement, in no less than 12-point type, immediately above the company name: “NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued.” (2) The outline of coverage provided to applicants pursuant to this section consists of four parts: a cover page, information about prepaid or periodic charges, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage shall be in the language and format prescribed below in no less than 12-point type. All Medicare supplement plans authorized by federal law shall be shown on the cover page, and the plans that are offered by the issuer shall be prominently identified. Information about prepaid or periodic charges for plans that are offered shall be shown on the cover page or immediately following the cover page and shall be prominently displayed. The charge and mode shall be stated for all plans that are offered to the prospective applicant. All possible charges for the prospective applicant shall be illustrated. (3) (A) The following shall only apply to contracts sold for effective dates prior to June 1, 2010: (i) The outline of coverage shall include the items, and in the same order, specified in the chart set forth in Section 17 of the Model Regulation to implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act, as adopted by the National Association of Insurance Commissioners in 2004. (ii) The cover page shall contain the 14-plan (A-L) charts. The plans offered by the issuer shall be clearly identified. Innovative benefits shall be explained in a manner approved by the director. (B) The following shall only apply to policies sold for effective dates on or after June 1, 2010: (i) The outline of coverage shall include the items, and in the same order specified in the chart set forth in Section 17 of the Model Regulation to implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act, as adopted by the National Association of Insurance Commissioners in 2008. (ii) The cover page shall contain all Medicare supplement benefit plan charts A to D, inclusive, F, high deductible F, G, and K to N, inclusive. The plans offered by the issuer shall be clearly identified. Innovative benefits shall be explained in a manner approved by the director. The text shall read: “Medicare supplement contracts can be sold in only standard plans. This chart shows the benefits included in each plan. Every insurance company must offer Plan A. Some plans may not be available. Plans E, H, I, and J are no longer available for sale. [This sentence shall not appear after June 1, 2011.]” (4) The disclosure pages shall be in the language and format described below in no less than 12-point type. ## INFORMATION ABOUT PREPAID OR PERIODIC CHARGES [Insert plan’s name] can only raise your charges if it raises the charge for all contracts like yours in this state. [If the charge is based on the increasing age of the enrollee, include information specifying when charges will change.] ## DISCLOSURES Use this outline to compare benefits and charges among policies. [The following additional language shall be included under “DISCLOSURES” for contracts with effective dates on or after June 1, 2010, but shall not appear after June 1, 2011.] This outline shows benefits and premiums of policies sold for effective dates on or after June 1, 2010. Policies sold for effective dates prior to June 1, 2010, have different benefits and premiums. Plans E, H, I, and J are no longer available for sale. ## READ YOUR POLICY VERY CAREFULLY This is only an outline describing the most important features of your Medicare supplement plan contract. This is not the plan contract and only the actual contract provisions will control. You must read the contract itself to understand all of the rights and duties of both you and [insert the health care service plan’s name]. ## RIGHT TO RETURN POLICY If you find that you are not satisfied with your contract, you may return it to [insert plan’s address]. If you send the contract back to us within 30 days after you receive it, we will treat the contract as if it had never been issued and return all of your payments. ## POLICY REPLACEMENT If you are replacing other health coverage, do NOT cancel it until you have actually received your new contract and are sure you want to keep it. ## NOTICE This contract may not fully cover all of your medical costs. Neither [insert the health care service plan’s name] nor its agents are connected with Medicare. This outline of coverage does not give all the details of Medicare coverage. Contact your local social security office or consult “The Medicare Handbook” for further details and limitations applicable to Medicare. ## COMPLETE ANSWERS ARE VERY IMPORTANT When you fill out the application for the new contract, be sure to answer truthfully and completely all questions about your medical and health history. The company may cancel your contract and refuse to pay any claims if you leave out or falsify important medical information. [If the contract is guaranteed issue, this paragraph need not appear.] Review the application carefully before you sign it. Be certain that all information has been properly recorded. [The charts displaying the features of each benefit plan offered by the issuer shall use the uniform format and language shown in the charts set forth in Section 17 of the Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act, as most recently adopted by the National Association of Insurance Commissioners. No more than four benefit plans may be shown on one chart. For purposes of illustration, charts for each benefit plan are set forth below. An issuer may use additional benefit plan designations on these charts.] [Include an explanation of any innovative benefits on the cover page and in the chart, in a manner approved by the director.] (k) Notwithstanding Section 1300.63.2 of Title 28 of the California Code of Regulations, no issuer shall combine the evidence of coverage and disclosure form into a single document relating to a contract that supplements Medicare, or is advertised or represented as a supplement to Medicare, with hospital or medical coverage. (l) The director may adopt regulations to implement this article, including, but not limited to, regulations that specify the required information to be contained in the outline of coverage provided to applicants pursuant to this section, including the format of tables, charts, and other information. (m) (1) Any health care service plan contract, other than a Medicare supplement contract, a contract issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.), a disability income policy, or any other contract identified in subdivision (b) of Section 1358.3, issued for delivery in this state to persons eligible for Medicare, shall notify enrollees under the contract that the contract is not a Medicare supplement contract. The notice shall either be printed or attached to the first page of the outline of coverage delivered to enrollees under the contract, or if no outline of coverage is delivered, to the first page of the contract delivered to enrollees. The notice shall be in no less than 12-point type and shall contain the following language: “THIS CONTRACT IS NOT A MEDICARE SUPPLEMENT. If you are eligible for Medicare, review the Guide to Health Insurance for People with Medicare available from the company.” (2) Applications provided to persons eligible for Medicare for the health insurance contracts described in paragraph (1) shall disclose the extent to which the contract duplicates Medicare in a manner required by the director. The disclosure statement shall be provided as a part of, or together with, the application for the contract. (n) A Medicare supplement contract that does not cover custodial care shall, on the cover page of the outline of coverages, contain the following statement in uppercase type: “THIS POLICY DOES NOT COVER CUSTODIAL CARE IN A SKILLED NURSING CARE FACILITY.” (o) An issuer shall comply with all notice requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173). (Amended by Stats. 2009, Ch. 10, Sec. 10. Effective July 2, 2009.)
  112. 1358.18.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Issuers of Medicare supplement contracts must include required application questions and consumer notices, provide the buyer’s guide, and limit health-information requests in guaranteed-issue or open-enrollment situations.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.18. In the interest of full and fair disclosure, and to ensure the availability of necessary consumer information to potential subscribers or enrollees not possessing a special knowledge of Medicare, health care service plans, or Medicare supplement contracts, an issuer shall comply with the following provisions: (a) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant currently has Medicare supplement, Medicare Advantage, Medi-Cal coverage, or another health insurance policy or certificate or plan contract in force or whether a Medicare supplement contract is intended to replace any other disability policy or certificate, or plan contract, presently in force. A supplementary application or other form to be signed by the applicant and solicitor containing those questions and statements may be used. ## “(Statements) (1) You do not need more than one Medicare supplement policy or contract. (2) If you purchase this contract, you may want to evaluate your existing health coverage and decide if you need multiple coverages. (3) You may be eligible for benefits under Medi-Cal or Medicaid and may not need a Medicare supplement contract. (4) If, after purchasing this contract, you become eligible for Medi-Cal, the benefits and premiums under your Medicare supplement contract can be suspended, if requested, during your entitlement to benefits under Medi-Cal or Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medi-Cal or Medicaid. If you are no longer entitled to Medi-Cal or Medicaid, your suspended Medicare supplement contract or, if that is no longer available, a substantially equivalent contract, will be reinstituted if requested within 90 days of losing Medi-Cal or Medicaid eligibility. If the Medicare supplement contract provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your contract was suspended, the reinstituted contract will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension. (5) If you are eligible for, and have enrolled in, a Medicare supplement contract by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement contract can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement contract under these circumstances and later lose your employer or union-based group health plan, your suspended Medicare supplement contract or, if that is no longer available, a substantially equivalent contract, will be reinstituted if requested within 90 days of losing your employer or union-based group health plan. If the Medicare supplement contract provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your contract was suspended, the reinstituted contract will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension. (6) Counseling services are available in this state to provide advice concerning your purchase of Medicare supplement coverage and concerning medical assistance through the Medi-Cal or Medicaid Program, including benefits as a qualified Medicare beneficiary (QMB) and a specified low-income Medicare beneficiary (SLMB). Information regarding counseling services may be obtained from the California Department of Aging. ## (Questions) If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a Medicare supplement insurance contract or that you had certain rights to buy such a contract, you may be guaranteed acceptance in one or more of our Medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS. [Please mark Yes or No below with an “X.”] To the best of your knowledge, (1) (a) Did you turn 65 years of age in the last 6 months? Yes____ No____ (b) Did you enroll in Medicare Part B in the last 6 months? Yes____ No____ (c) If yes, what is the effective date?___________________ (2) Are you covered for medical assistance through California’s Medi-Cal program? NOTE TO APPLICANT: If you have a share of cost under the Medi-Cal program, please answer NO to this question. Yes____ No____ If yes, (a) Will Medi-Cal pay your premiums for this Medicare supplement contract? Yes____ No____ (b) Do you receive benefits from Medi-Cal OTHER THAN payments toward your Medicare Part B premium? Yes____ No____ (3) (a) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave “END” blank. START __/__/__ END __/__/__ (b) If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new Medicare supplement contract? Yes____ No____ (c) Was this your first time in this type of Medicare plan? Yes____ No____ (d) Did you drop a Medicare supplement contract to enroll in the Medicare plan? Yes____ No____ (4) (a) Do you have another Medicare supplement policy or certificate or contract in force? Yes____ No____ (b) If so, with what company, and what plan do you have? [optional for Direct Mailers] Yes____ No____ (c) If so, do you intend to replace your current Medicare supplement policy or certificate or contract with this contract? Yes____ No____ (5) Have you had coverage under any other health insurance within the past 63 days? (For example, an employer, union, or individual plan) Yes____ No____ (a) If so, with what companies and what kind of policy? ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ (b) What are your dates of coverage under the other policy? START __/__/__ END __/__/__ (If you are still covered under the other policy, leave “END” blank).” (b) Solicitors shall list any other health insurance policies or plan contracts they have sold to the applicant as follows: (1) List policies and contracts sold that are still in force. (2) List policies and contracts sold in the past five years that are no longer in force. (c) An issuer issuing Medicare supplement contracts without a solicitor or solicitor firm (a direct response issuer) shall return to the applicant, upon delivery of the contract, a copy of the application or supplemental forms, signed by the applicant and acknowledged by the issuer. (d) Upon determining that a sale will involve replacement of Medicare supplement coverage, an issuer, other than a direct response issuer, or its agent, shall furnish the applicant, prior to issuance for delivery of the Medicare supplement contract, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the contract the notice regarding replacement of Medicare supplement coverage. (e) The notice required by subdivision (d) for an issuer shall be provided in substantially the following form in no less than 12-point type: ## NOTICE TO APPLICANT REGARDING REPLACEMENT OF MEDICARE SUPPLEMENT COVERAGE OR MEDICARE ADVANTAGE (Company name and address) SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE According to [your application] [information you have furnished], you intend to lapse or otherwise terminate an existing Medicare supplement policy or contract or Medicare Advantage plan and replace it with a contract to be issued by [Plan Name]. Your contract to be issued by [Plan Name] will provide 30 days within which you may decide without cost whether you desire to keep the contract. You should review this new coverage carefully. Compare it with all accident and sickness coverage you now have. Terminate your present policy or contract only if, after due consideration, you find that purchase of this Medicare supplement coverage is a wise decision. STATEMENT TO APPLICANT BY PLAN, SOLICITOR, SOLICITOR FIRM, OR OTHER REPRESENTATIVE: (1) I have reviewed your current medical or health coverage. To the best of my knowledge, the replacement of coverage involved in this transaction does not duplicate coverage or, if applicable, Medicare Advantage coverage because you intend to terminate your existing Medicare supplement coverage or leave your Medicare Advantage plan. The replacement contract is being purchased for the following reason (check one): __ Additional benefits. __ No change in benefits, but lower premiums or charges. __ Fewer benefits and lower premiums or charges. __ Plan has outpatient prescription drug coverage and applicant is enrolled in Medicare Part D. __ Disenrollment from a Medicare Advantage plan. Reasons for disenrollment: __ Other. (please specify) ________. (2) If the issuer of the Medicare supplement contract being applied for does not impose, or is otherwise prohibited from imposing, preexisting condition limitations, please skip to statement 3 below. Health conditions that you may presently have (preexisting conditions) may not be immediately or fully covered under the new contract. This could result in denial or delay of a claim for benefits under the new contract, whereas a similar claim might have been payable under your present contract. (3) State law provides that your replacement Medicare supplement contract may not contain new preexisting conditions, waiting periods, elimination periods, or probationary periods. The plan will waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new coverage for similar benefits to the extent that time was spent (depleted) under the original contract. (4) If you still wish to terminate your present policy or contract and replace it with new coverage, be certain to truthfully and completely answer any and all questions on the application concerning your medical and health history. Failure to include all material medical information on an application requesting that information may provide a basis for the plan to deny any future claims and to refund your prepaid or periodic payment as though your contract had never been in force. After the application has been completed and before you sign it, review it carefully to be certain that all information has been properly recorded. (5) Do not cancel your present Medicare supplement coverage until you have received your new contract and are sure you want to keep it. (Signature of Solicitor, Solicitor Firm, or Other Representative) [Typed Name and Address of Plan, Solicitor, or Solicitor Firm] (Applicant’s Signature) (Date) (f) The application form or other consumer information for persons eligible for Medicare and used by an issuer shall contain, as an attachment, a Medicare supplement buyer’s guide in the form approved by the director. The application or other consumer information, containing, as an attachment, the buyer’s guide, shall be mailed or delivered to each applicant applying for that coverage at or before the time of application and, to establish compliance with this subdivision, the issuer shall obtain an acknowledgment of receipt of the attached buyer’s guide from each applicant. An issuer shall not make use of or otherwise disseminate any buyer’s guide that does not accurately outline current Medicare supplement benefits. An issuer shall not be required to provide more than one copy of the buyer’s guide to any applicant. (g) An issuer may comply with the requirement of this section in the case of group contracts by causing the subscriber (1) to disseminate copies of the disclosure form containing as an attachment the buyer’s guide to all persons eligible under the group contract at the time those persons are offered the Medicare supplement plan, and (2) collecting and forwarding to the issuer an acknowledgment of receipt of the disclosure form containing, as an attachment, the buyer’s guide from each enrollee. (h) An issuer shall not require, request, or obtain health information as part of the application process for an applicant who is eligible for guaranteed issuance of, or open enrollment for, any Medicare supplement coverage pursuant to Section 1358.11 or 1358.12, except for purposes of paragraph (1) or (2) of subdivision (a) of Section 1358.11 when the applicant is first enrolled in Medicare Part B. The application form shall include a clear and conspicuous statement that the applicant is not required to provide health information during a period where guaranteed issue or open enrollment applies, as specified in Section 1358.11 or 1358.12, except for purposes of paragraph (1) or (2) of subdivision (a) of Section 1358.11 when the applicant is first enrolled in Medicare Part B, and shall inform the applicant of those periods of guaranteed issuance of Medicare supplement coverage. This subdivision does not prohibit an issuer from requiring proof of eligibility for a guaranteed issuance of Medicare supplement coverage. (Amended by Stats. 2016, Ch. 86, Sec. 176. (SB 1171) Effective January 1, 2017.)
  113. 1358.19.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    An issuer must give the director a copy of any Medicare supplement advertisement intended for use in California for review or approval.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.19. An issuer shall provide a copy of any Medicare supplement advertisement intended for use in this state whether through written, radio, or television medium to the director for review or approval. (Repealed and added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  114. 1358.2.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This article’s purpose is to standardize and simplify Medicare supplement contracts, improve public understanding and comparison, remove misleading or confusing provisions, and require full disclosure when those contracts are sold to people eligible for Medicare.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.2. The purpose of this article is to provide for the reasonable standardization of coverage and simplification of terms and benefits of Medicare supplement contracts, to facilitate public understanding and comparison of those contracts, to eliminate provisions contained in those contracts that may be misleading or confusing in connection with the purchase of the contracts or with the settlement of claims, and to provide for full disclosures in the sale of Medicare supplement contracts to persons eligible for Medicare. (Repealed and added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  115. 1358.20.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    An issuer selling Medicare supplement contracts must use fair marketing practices, disclose a buyer notice, check for existing coverage, provide a rate-guide statement, and keep auditable compliance procedures; certain deceptive marketing practices and use of Medicare supplement-style terms are prohibited unless the contract complies with the article.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.20. (a) An issuer, directly or through solicitors or other representatives, shall do each of the following: (1) Establish marketing procedures to ensure that any comparison of Medicare supplement coverage by its solicitors or other representatives will be fair and accurate. (2) Establish marketing procedures to ensure that excessive coverage is not sold or issued. (3) Display prominently by type, stamp, or other appropriate means, on the first page of the outline of coverage and contract, the following: “Notice to buyer: This Medicare supplement contract may not cover all of your medical expenses.” (4) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant for a Medicare supplement contract already has health care coverage and the types and amounts of that coverage. (5) Provide, on the application form for Medicare supplement contracts, a statement that reads as follows: “A rate guide is available that compares the policies sold by different insurers. You can obtain a copy of this rate guide by calling the Department of Managed Health Care’s consumer toll-free telephone number (1-888-466-2219), by calling the Health Insurance Counseling and Advocacy Program (HICAP) toll-free telephone number (1-800-434-0222), or by accessing the Department of Managed Health Care’s internet website (www.dmhc.ca.gov).” (6) Establish auditable procedures for verifying compliance with this subdivision. (b) In addition to the practices prohibited by this code or any other law, the following acts and practices are prohibited: (1) Twisting, which means knowingly making any misleading representation or incomplete or fraudulent comparison of any coverages or issuers for the purpose of inducing or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any coverage or to take out coverage with another plan or insurer. (2) High pressure tactics, which means employing any method of marketing having the effect of or tending to induce the purchase of coverage through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of coverage. (3) Cold lead advertising, which means making use directly or indirectly of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is the solicitation of coverage and that contact will be made by a health care service plan or its representative. (c) The terms “Medicare supplement,” “Medigap,” “Medicare Wrap-Around” and words of similar import shall not be used unless the contract is issued in compliance with this article. (Amended by Stats. 2019, Ch. 113, Sec. 1. (AB 1802) Effective January 1, 2020.)
  116. 1358.21.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Issuers and their representatives must use reasonable efforts to judge whether a recommended Medicare supplement purchase or replacement is appropriate, and issuers may not sell or issue certain Medicare supplement coverage in prohibited situations.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.21. (a) In recommending the purchase or replacement of any Medicare supplement coverage, an issuer or its representative shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement. (b) Any sale of a Medicare supplement contract that will provide an individual more than one Medicare supplement policy or certificate, or contract, is prohibited. (c) An issuer shall not issue a Medicare supplement contract to an individual enrolled in Medicare Part C unless the effective date of the coverage is after the termination date of the individual’s coverage under Medicare Part C. (Amended by Stats. 2005, Ch. 206, Sec. 16. Effective January 1, 2006.)
  117. 1358.22.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Each issuer must file an annual report by March 1 with contract numbers and issuance dates for certain California residents with more than one Medicare supplement contract, grouped by enrollee.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.22. (a) On or before March 1 of each year, an issuer shall report the following information for every individual resident of this state for which the issuer has in force more than one Medicare supplement contract: (1) Contract number. (2) Date of issuance. (b) The items set forth above shall be grouped by enrollee. (Added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  118. 1358.225.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Each issuer must file an annual Medicare supplement contract list with the director by June 30, and the director must send a related list to the secretary by September 1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.225. (a) Every issuer shall, by June 30 of each year, file with the director a list of its Medicare supplement contracts offered or issued or outstanding in this state as of the end of the previous calendar year. (b) The list shall identify the filing issuer by name and address, shall identify each type of contract it offers by name and form number, if one is used, and shall differentiate between contracts filed with and approved by the director in years prior to the previous calendar year, and those filed and approved in the previous calendar year. (c) The list shall specifically identify all of the following: (1) Contracts that are issued and outstanding in this state but are no longer offered for sale. (2) Contracts that, for any reason, were not filed and approved by the director. (3) Contracts for which the director’s approval was withdrawn within the previous calendar year. (d) The director shall, on or before the first day of September of each year provide the secretary with a list identifying each contract by name and address and the information required to be submitted by this section. (Added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  119. 1358.23.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    When a Medicare supplement contract replaces another one, the new issuer must carry over prior time spent for certain waiting-period type limits, and if the old coverage was in force at least six months, the new contract may not impose those time periods for similar benefits.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.23. (a) If a Medicare supplement contract replaces another Medicare supplement policy or certificate, or contract, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods in the new Medicare supplement contract for similar benefits to the extent that time was spent under the original policy or certificate, or contract. (b) If a Medicare supplement contract replaces another Medicare supplement policy or certificate, or contract, that has been in effect for at least six months, the replacing contract shall not provide any time period applicable to preexisting conditions, waiting periods, elimination periods and probationary periods for benefits similar to those contained in the original policy or certificate, or contract. (Added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  120. 1358.24.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Issuers of Medicare supplement contracts must follow genetic nondiscrimination rules, including limits on denials, pricing, testing requests, and use of genetic information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.24. This section applies to all contracts that become effective on or after May 21, 2009. (a) In addition to the requirements set forth under Sections 1365.5 and 1374.7, an issuer of a Medicare supplement contract shall adhere to the requirements imposed by the federal Genetic Information Nondiscrimination Act of 2008 (Public Law 110-233), as follows: (1) The issuer shall not deny or condition the issuance or effectiveness of the contract, including the imposition of any exclusion of benefits under the contract based on a preexisting condition, on the basis of the genetic information with respect to that individual or a family member of the individual. (2) The issuer shall not discriminate in the pricing of the contract, including the adjustment of prepaid or periodic charges, of an individual on the basis of the genetic information with respect to that individual or a family member of the individual. (b) Nothing in subdivision (a) shall be construed to limit the ability of an issuer, to the extent otherwise permitted by law, to do any of the following: (1) Deny or condition the issuance or effectiveness of the contract or increase the prepaid or periodic charge for a group based on the manifestation of a disease or disorder of an enrollee, subscriber, or applicant. (2) Increase the prepaid or periodic charge for any contract issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the contract. For purposes of this paragraph, the manifestation of a disease or disorder in one individual shall not also be used as genetic information about other group members and to further increase the prepaid or periodic charge for the group. (c) An issuer of a Medicare supplement contract shall not request or require an individual or a family member of that individual to undergo a genetic test. (d) Subdivision (c) shall not be construed to preclude an issuer of a Medicare supplement contract from obtaining and using the results of a genetic test in making a determination regarding payment, as defined for the purposes of applying the regulations promulgated under Part C of Title XI and Section 264 of the Health Insurance Portability and Accountability Act of 1996, as may be revised from time to time, and consistent with subdivision (a). (e) For purposes of carrying out subdivision (d), an issuer of a Medicare supplement contract may request only the minimum amount of information necessary to accomplish the intended purpose. (f) An issuer of a Medicare supplement contract shall not request, require, seek, or purchase genetic information for underwriting purposes. (g) An issuer of a Medicare supplement contract shall not request, require, seek, or purchase genetic information with respect to any individual or a family member of that individual prior to the individual’s enrollment under the contract in connection with that enrollment. (h) If an issuer of a Medicare supplement contract obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual or a family member of that individual, the request, requirement, or purchase shall not be considered a violation of subdivision (g) if the request, requirement, or purchase is not in violation of subdivision (f). However, the issuer shall not use any genetic information obtained under this section for any prohibited purpose described in this section or in Sections 1365.5 and 1374.7. (i) For the purposes of this section, the following definitions shall apply: (1) “Issuer of a Medicare supplement contract” includes a third-party administrator, or other person acting for or on behalf of an issuer. (2) “Family member” means, with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of the individual. (3) “Genetic information” means, with respect to any individual, information about the individual’s genetic tests, the genetic tests of family members of the individual, and the manifestation of a disease or disorder in family members of the individual. The term includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research which includes genetic services, by the individual or any family member of the individual. Any reference to genetic information concerning an individual or family member of an individual who is a pregnant woman, includes genetic information of any fetus carried by that pregnant woman, or with respect to an individual or family member utilizing reproductive technology, includes genetic information of any embryo legally held by an individual or family member. The term “genetic information” does not include information about the sex or age of any individual. (4) “Genetic services” means a genetic test, genetic education, genetic counseling, including obtaining, interpreting, or assessing genetic information. (5) “Genetic test” means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detect genotypes, mutations, or chromosomal changes. The term “genetic test” does not mean an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes; or an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved. (6) “Underwriting purposes” includes all of the following: (A) Rules for, or determination of, eligibility, including enrollment and continued eligibility, for benefits under the contract. (B) The computation of prepaid or periodic charges or contribution amounts under the contract. (C) The application of any preexisting condition exclusion under the contract. (D) Other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits. (Added by Stats. 2009, Ch. 10, Sec. 13. Effective July 2, 2009.)
  121. 1358.3.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section generally applies Article 3.5 to group and individual Medicare supplement contracts in this state from January 1, 2001, but excludes certain employer/labor organization contracts and policies covered by another insurance code article.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.3. (a) Except as otherwise provided in this section or in Sections 1358.7, 1358.12, 1358.13, 1358.16, and 1358.21, this article shall apply to all group and individual Medicare supplement contracts advertised, solicited, or issued for delivery in this state on or after January 1, 2001. (b) This article shall not apply to a contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees, or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations. (c) This article shall not apply to Medicare supplement policies or certificates subject to Article 6 (commencing with Section 10192.1) of Chapter 1 of Part 1 of Division 2 of the Insurance Code. (Repealed and added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  122. 1358.4.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section defines key terms used in the article on Medicare supplement contracts.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.4. The following definitions apply for the purposes of this article: (a) “Applicant” means: (1) An individual enrollee who seeks to contract for health coverage, in the case of an individual Medicare supplement contract. (2) An enrollee who seeks to obtain health coverage through a group, in the case of a group Medicare supplement contract. (b) “Bankruptcy” means that situation in which a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state. (c) “Continuous period of creditable coverage” means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than 63 days. (d) (1) “Creditable coverage” means, with respect to an individual, coverage of the individual provided under any of the following: (A) Any individual or group contract, policy, certificate, or program that is written or administered by a health care service plan, health insurer, fraternal benefits society, self-insured employer plan, or any other entity, in this state or elsewhere, and that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. The term includes continuation or conversion coverage. (B) Part A or B of Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395c et seq.) (Medicare). (C) Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) (Medicaid), other than coverage consisting solely of benefits under Section 1928 of that act. (D) Chapter 55 of Title 10 of the United States Code (CHAMPUS). (E) A medical care program of the Indian Health Service or of a tribal organization. (F) A state health benefits risk pool. (G) A health plan offered under Chapter 89 of Title 5 of the United States Code (Federal Employees Health Benefits Program). (H) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(I) of the federal Public Health Service Act, as amended by Public Law 104-191, the federal Health Insurance Portability and Accountability Act of 1996. (I) A health benefit plan under Section 5(e) of the federal Peace Corps Act (22 U.S.C. Sec. 2504(e)). (J) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (K) Any other creditable coverage as defined by subsection (c) of Section 2701 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg(c)). (2) “Creditable coverage” shall not include one or more, or any combination of, the following: (A) Coverage for accident-only or disability income insurance, or any combination thereof. (B) Coverage issued as a supplement to liability insurance. (C) Liability insurance, including general liability insurance and automobile liability insurance. (D) Workers’ compensation or similar insurance. (E) Automobile medical payment insurance. (F) Credit-only insurance. (G) Coverage for onsite medical clinics. (H) Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other insurance benefits. (3) “Creditable coverage” shall not include the following benefits if they are provided under a separate policy, certificate, or contract or are otherwise not an integral part of the plan: (A) Limited scope dental or vision benefits. (B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof. (C) Other similar, limited benefits as are specified in federal regulations. (4) “Creditable coverage” shall not include the following benefits if offered as independent, noncoordinated benefits: (A) Coverage only for a specified disease or illness. (B) Hospital indemnity or other fixed indemnity insurance. (5) “Creditable coverage” shall not include the following if offered as a separate policy, certificate, or contract: (A) Medicare supplemental health insurance as defined under Section 1882(g)(1) of the federal Social Security Act. (B) Coverage supplemental to the coverage provided under Chapter 55 of Title 10 of the United States Code. (C) Similar supplemental coverage provided to coverage under a group health plan. (e) “Employee welfare benefit plan” means a plan, fund, or program of employee benefits as defined in Section 1002 of Title 29 of the United States Code (Employee Retirement Income Security Act). (f) “Insolvency” means when an issuer, licensed to transact the business of a health care service plan in this state, has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer’s state of domicile. (g) “Issuer” means a health care service plan delivering, or issuing for delivery, Medicare supplement contracts in this state, but does not include entities subject to Article 6 (commencing with Section 10192.1) of Chapter 1 of Part 2 of Division 2 of the Insurance Code. (h) “Medicare” means the federal Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as amended. (i) “Medicare Advantage Plan” means a plan of coverage for health benefits under Medicare Part C and includes: (1) Coordinated care plans that provide health care services, including, but not limited to, health care service plans (with or without a point-of-service option), plans offered by provider-sponsored organizations, and preferred provider organizations plans. (2) Medical savings account plans coupled with a contribution into a Medicare Advantage medical savings account. (3) Medicare Advantage private fee-for-service plans. (j) “Medicare supplement contract” means a group or individual plan contract of hospital and medical service associations or health care service plans, other than a contract issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. Sec. 1395mm) or an issued contract under a demonstration project specified in Section 1395ss(g)(1) of Title 42 of the United States Code, that is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare. “Contract” means “Medicare supplement contract,” unless the context requires otherwise. “Medicare supplement contract” does not include a Medicare Advantage plan established under Medicare Part C, an outpatient prescription drug plan established under Medicare Part D, or a health care prepayment plan that provides benefits pursuant to an agreement under subparagraph (A) of paragraph (1) of subsection (a) of Section 1833 of the federal Social Security Act. (k) “1990 standardized Medicare supplement benefit plan,” “1990 standardized benefit plan,” or “1990 plan” means a group or individual Medicare supplement contract issued on or after July 21, 1992, and with an effective date prior to June 1, 2010, and includes Medicare supplement contracts renewed on or after that date that are not replaced by the issuer at the request of the enrollee or subscriber. (l) “2010 standardized Medicare supplement benefit plan,” “2010 standardized benefit plan,” or “2010 plan” means a group or individual Medicare supplement contract issued with an effective date on or after June 1, 2010. (m) “Secretary” means the Secretary of the United States Department of Health and Human Services. (Amended by Stats. 2010, Ch. 328, Sec. 116. (SB 1330) Effective January 1, 2011.)
  123. 1358.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Medicare supplement contracts must use required definitions and may not define certain terms more narrowly than Medicare allows.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.5. (a) A contract shall not be advertised, solicited, or issued for delivery as a Medicare supplement contract unless the contract contains definitions or terms that conform to the requirements of this section. (1) (A) “Accident,” “accidental injury,” or “accidental means” shall be defined to employ “result” language and shall not include words that establish an accidental means test or use words such as “external, violent, visible wounds” or other similar words of description or characterization. (B) The definition shall not be more restrictive than the following: “injury or injuries for which benefits are provided means accidental bodily injury sustained by the covered person that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while coverage is in force.” (C) The definition may provide that injuries shall not include injuries for which benefits are provided or available under any workers’ compensation, employer’s liability, or similar law, unless prohibited by law. (2) “Benefit period” or “Medicare benefit period” shall not be defined more restrictively than as defined in the Medicare program. (3) “Convalescent nursing home,” “extended care facility,” or “skilled nursing facility” shall not be defined more restrictively than as defined in the Medicare program. (4) “Health care expenses” means for purposes of Section 1358.14, expenses of health care service plans associated with the delivery of health care services, which expenses are analogous to incurred losses of insurers. (5) “Hospital” may be defined in relation to its status, facilities, and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare Program. (6) “Medicare” shall be defined in the contract. “Medicare” may be substantially defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as amended,” or “Title I, Part I of Public Law 89-97, as enacted by the 89th Congress and popularly known as the Health Insurance for the Aged Act, as amended,” or words of similar import. (7) “Medicare eligible expenses” shall mean expenses of the kinds covered by Medicare Parts A and B, to the extent recognized as reasonable and medically necessary by Medicare. (8) “Physician” shall not be defined more restrictively than as defined in the Medicare Program. (9) (A) “Sickness” shall not be defined more restrictively than as follows: “sickness means illness or disease of an insured person that first manifests itself after the effective date of insurance and while the insurance is in force.” (B) The definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any workers’ compensation, occupational disease, employer’s liability, or similar law. (b) Nothing in this section shall be construed as prohibiting any contract, by definitions or express provisions, from limiting or restricting any or all of the benefits provided under the contract, except in-area and out-of-area emergency services, to those health care services that are delivered by issuer, employed, owned, or contracting providers, and provider facilities, so long as the contract complies with the provisions of Sections 1358.14 and 1367 and with Section 1300.67 of Title 28 of the California Code of Regulations. (c) Nothing in this section shall be construed as prohibiting any contract that limits or restricts any or all of the benefits provided under the contract in the manner contemplated in subdivision (b) from limiting its obligation to deliver services, and disclaiming any liability from any delay or failure to provide those services (1) in the event of a major disaster or epidemic or (2) in the event of circumstances not reasonably within the control of the issuer, such as the partial or total destruction of facilities, war, riot, civil insurrection, disability of a significant part of its health personnel, or similar circumstances so long as the provisions comply with the provisions of subdivision (h) of Section 1367. (Amended by Stats. 2005, Ch. 206, Sec. 2. Effective January 1, 2006.)
  124. 1358.6.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section limits what Medicare supplement contracts may include, bars contracts with certain prohibited provisions, requires specific labeling for preexisting-condition limits, and restricts outpatient prescription drug contracts after January 1, 2006.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.6. (a) (1) Except for permitted preexisting condition clauses as described in Sections 1358.7, 1358.8, and 1358.81, a contract shall not be advertised, solicited, or issued for delivery as a Medicare supplement contract if the contract contains definitions, limitations, exclusions, conditions, reductions, or other provisions that are more restrictive or limiting than that term as officially used in Medicare, except as expressly authorized by this article. (2) No issuer may advertise, solicit, or issue for delivery any Medicare supplement contract with hospital or medical coverage if the contract contains any of the prohibited provisions described in subdivision (b). (b) The following provisions shall be deemed to be unfair, unreasonable, and inconsistent with the objectives of this chapter and shall not be contained in any Medicare supplement contract: (1) Any waiver, exclusion, limitation, or reduction based on or relating to a preexisting disease or physical condition, unless that waiver, exclusion, limitation, or reduction (A) applies only to coverage for specified services rendered not more than six months from the effective date of coverage, (B) is based on or relates only to a preexisting disease or physical condition defined no more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage, (C) does not apply to any coverage under any group contract, and (D) is approved in advance by the director. Any limitations with respect to a preexisting condition shall appear as a separate paragraph of the contract and be labeled “Preexisting Condition Limitations.” (2) Except with respect to a group contract subject to, and in compliance with, Section 1399.62, any provision denying coverage, after termination of the contract, for services provided continuously beginning while the contract was in effect, during the continuous total disability of the subscriber or enrollee, except that the coverage may be limited to a reasonable period of time not less than the duration of the contract benefit period, if any, and may be limited to the maximum benefits provided under the contract. (c) A Medicare supplement contract in force shall not contain benefits that duplicate benefits provided by Medicare. (d) (1) Subject to paragraphs (4) and (5) of subdivision (a) of Section 1358.8, a Medicare supplement contract with benefits for outpatient prescription drugs that was issued prior to January 1, 2006, shall be renewed for current enrollees and subscribers, at their option, who do not enroll in Medicare Part D. (2) A Medicare supplement contract with benefits for outpatient prescription drugs shall not be issued on and after January 1, 2006. (3) On and after January 1, 2006, a Medicare supplement contract with benefits for outpatient prescription drugs shall not be renewed after the enrollee or subscriber enrolls in Medicare Part D unless both of the following conditions exist: (A) The contract is modified to eliminate outpatient prescription drug coverage for outpatient prescription drug expenses incurred after the effective date of the individual’s coverage under a Medicare Part D plan. (B) The premium is adjusted to reflect the elimination of outpatient prescription drug coverage at the time of enrollment in Medicare Part D, accounting for any claims paid if applicable. (Amended by Stats. 2009, Ch. 10, Sec. 2. Effective July 2, 2009.)
  125. 1358.7.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    A Medicare supplement contract may not be advertised, solicited, or issued for delivery before January 1, 2001 unless it meets or exceeds the code requirements that were in effect before that date.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.7. A contract shall not be advertised, solicited, or issued for delivery as a Medicare supplement contract prior to January 1, 2001, unless it meets or exceeds requirements applicable pursuant to this code that were in effect prior to that date. (Repealed and added by Stats. 2000, Ch. 706, Sec. 2. Effective January 1, 2001.)
  126. 1358.8.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Medicare supplement contracts must meet specified benefit standards and cannot include certain restrictive terms, while issuers must give required notices and follow reinstatement and suspension rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.8. The following standards are applicable to all Medicare supplement contracts advertised, solicited, or issued for delivery on or after January 1, 2001, and with an effective date prior to June 1, 2010. A contract shall not be advertised, solicited, or issued for delivery as a Medicare supplement contract unless it complies with these benefit standards. (a) The following general standards apply to Medicare supplement contracts and are in addition to all other requirements of this article: (1) A Medicare supplement contract shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The contract shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage. (2) A Medicare supplement contract shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents. (3) A Medicare supplement contract shall provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Prepaid or periodic charges may be modified to correspond with those changes. (4) A Medicare supplement contract shall not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the covered person, other than the nonpayment of the prepaid or periodic charge. (5) Each Medicare supplement contract shall be guaranteed renewable. (A) The issuer shall not cancel or nonrenew the contract solely on the ground of health status of the individual. (B) The issuer shall not cancel or nonrenew the contract for any reason other than nonpayment of the prepaid or periodic charge or misrepresentation of the risk by the applicant that is shown by the plan to be material to the acceptance for coverage. The contestability period for Medicare supplement contracts shall be two years. (C) If a group Medicare supplement contract is terminated by the subscriber and is not replaced as provided under subparagraph (E), the issuer shall offer enrollees an individual Medicare supplement contract that, at the option of the enrollee, either provides for continuation of the benefits contained in the terminated contract or provides for benefits that otherwise meet the requirements of this subsection. (D) If an individual is an enrollee in a group Medicare supplement contract and the individual membership in the group is terminated, the issuer shall either offer the enrollee the conversion opportunity described in subparagraph (C) or, at the option of the subscriber, shall offer the enrollee continuation of coverage under the group contract. (E) If a group Medicare supplement contract is replaced by another group Medicare supplement contract purchased by the same subscriber, the issuer of the replacement contract shall offer coverage to all persons covered under the old group contract on its date of termination. Coverage under the new contract shall not result in any exclusion for preexisting conditions that would have been covered under the group contract being replaced. (F) If a Medicare supplement contract eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173), the contract as modified as a result of that act shall be deemed to satisfy the guaranteed renewal requirements of this paragraph. (6) Termination of a Medicare supplement contract shall be without prejudice to any continuous loss that commenced while the contract was in force, but the extension of benefits beyond the period during which the contract was in force may be predicated upon the continuous total disability of the covered person, limited to the duration of the contract benefit period, if any, or to payment of the maximum benefits. Receipt of Medicare Part D benefits shall not be considered in determining a continuous loss. (7) (A) (i) A Medicare supplement contract shall provide that benefits and prepaid or periodic charges under the contract shall be suspended at the request of the enrollee for the period, not to exceed 24 months, in which the enrollee has applied for and is determined to be entitled to medical assistance under Title XIX of the federal Social Security Act, but only if the enrollee notifies the issuer of the contract within 90 days after the date the individual becomes entitled to assistance. If suspension occurs and if the enrollee loses entitlement to medical assistance, the contract shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the enrollee provides notice of loss of entitlement within 90 days after the date of loss and pays the prepaid or periodic charge attributable to the period, effective as of the date of termination of entitlement. Upon receipt of timely notice, the issuer shall return directly to the enrollee that portion of the prepaid or periodic charge attributable to the period the enrollee was entitled to medical assistance, subject to adjustment for paid claims. (ii) A Medicare supplement contract shall provide that benefits and premiums under the contract shall be suspended at the request of the enrollee or subscriber for any period that may be provided by federal regulation if the enrollee or subscriber is entitled to benefits under Section 226(b) of the Social Security Act and is covered under a group health plan, as defined in Section 1862(b)(1)(A)(v) of the Social Security Act. If suspension occurs and the enrollee or subscriber loses coverage under the group health plan, the contract shall be automatically reinstituted, effective as of the date of loss of coverage if the enrollee or subscriber provides notice within 90 days of the date of the loss of coverage. (B) Reinstitution of coverages: (i) Shall not provide for any waiting period with respect to treatment of preexisting conditions. (ii) Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension. If the suspended Medicare supplement contract provided coverage for outpatient prescription drugs, reinstitution of the contract for a Medicare Part D enrollee shall not include coverage for outpatient prescription drugs but shall otherwise provide coverage that is substantially equivalent to the coverage in effect before the date of suspension. (iii) Shall provide for classification of prepaid or periodic charges on terms at least as favorable to the enrollee as the prepaid or periodic charge classification terms that would have applied to the enrollee had the coverage not been suspended. (8) If an issuer makes a written offer to the Medicare supplement enrollee or subscriber of one or more of its plan contracts, to exchange during a specified period from his or her 1990 standardized plan, as described in Section 1358.9, to a 2010 standardized plan, as described in Section 1358.91, the offer and subsequent exchange shall comply with the following requirements: (A) An issuer need not provide justification to the director if the enrollee or subscriber replaces a 1990 standardized plan contract with an issue age rated 2010 standardized plan contract at the enrollee or subscriber’s original issue age and duration. If an enrollee or subscriber’s plan contract to be replaced is priced on an issue age rate schedule at the time of that offer, the rate charged to the enrollee or subscriber for the new exchanged plan shall recognize the plan contract reserve buildup, due to the prefunding inherent in the use of an issue age rate basis, for the benefit of the enrollee or subscriber. The method proposed to be used by an issuer shall be filed with the director. (B) The rating class of the new plan contract shall be the class closest to the enrollee or subscriber’s class of the replaced coverage. (C) An issuer may not apply new preexisting condition limitations or a new incontestability period to the new plan contract for those benefits contained in the exchanged 1990 standardized plan contract of the enrollee or subscriber, but may apply preexisting condition limitations of no more than six months to any added benefits contained in the new 2010 standardized plan contract not contained in the exchanged plan contract. This subparagraph shall not apply to an applicant who is guaranteed issue under Section 1358.11 or 1358.12. (D) The new plan contract shall be offered to all enrollees or subscribers within a given plan, except where the offer or issue would be in violation of state or federal law. (9) A Medicare supplement contract shall not be limited to coverage for a single disease or affliction. (10) A Medicare supplement contract shall provide an examination period of 30 days after the receipt of the contract by the applicant for purposes of review, during which time the applicant may return the contract as described in subdivision (e) of Section 1358.17. (11) A Medicare supplement contract shall additionally meet any other minimum benefit standards as established by the director. (12) Within 30 days prior to the effective date of any Medicare benefit changes, an issuer shall file with the director, and notify its subscribers and enrollees of, modifications it has made to Medicare supplement contracts. (A) The notice shall include a description of revisions to the Medicare Program and a description of each modification made to the coverage provided under the Medicare supplement contract. (B) The notice shall inform each subscriber and enrollee as to when any adjustment in the prepaid or periodic charges will be made due to changes in Medicare benefits. (C) The notice of benefit modifications and any adjustments to the prepaid or periodic charges shall be in outline form and in clear and simple terms so as to facilitate comprehension. The notice shall not contain or be accompanied by any solicitation. (13) No modifications to existing Medicare supplement coverage shall be made at the time of, or in connection with, the notice requirements of this article except to the extent necessary to eliminate duplication of Medicare benefits and any modifications necessary under the contract to provide indexed benefit adjustment. (b) With respect to the standards for basic (core) benefits for benefit plans A to J, inclusive, every issuer shall make available a contract including only the following basic “core” package of benefits to each prospective applicant. This “core” package of benefits shall be referred to as standardized Medicare supplement benefit plan “A”. An issuer may make available to prospective applicants any of the other Medicare supplement benefit plans in addition to the basic core package, but not in lieu of that package. (1) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day to the 90th day, inclusive, in any Medicare benefit period. (2) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used. (3) Upon exhaustion of the Medicare hospital inpatient coverage including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the enrollee or subscriber for any balance. (4) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations. (5) Coverage for the coinsurance amount, or in the case of hospital outpatient services, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible. (c) The following additional benefits shall be included in Medicare supplement benefit plans B to J, inclusive, only as provided by Section 1358.9. (1) With respect to the Medicare Part A deductible, coverage for all of the Medicare Part A inpatient hospital deductible amount per benefit period. (2) With respect to skilled nursing facility care, coverage for the actual billed charges up to the coinsurance amount from the 21st day to the 100th day, inclusive, in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A. (3) With respect to the Medicare Part B deductible, coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement. (4) With respect to 80 percent of the Medicare Part B excess charges, coverage for 80 percent of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare Program or state law, and the Medicare-approved Part B charge. (5) With respect to 100 percent of the Medicare Part B excess charges, coverage for all of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare Program or state law, and the Medicare-approved Part B charge. (6) With respect to the basic outpatient prescription drug benefit, coverage for 50 percent of outpatient prescription drug charges, after a two-hundred-fifty-dollar ($250) calendar year deductible, to a maximum of one thousand two hundred fifty dollars ($1,250) in benefits received by the insured per calendar year, to the extent not covered by Medicare. On and after January 1, 2006, no Medicare supplement contract may be sold or issued if it includes a prescription drug benefit. (7) With respect to the extended outpatient prescription drug benefit, coverage for 50 percent of outpatient prescription drug charges, after a two-hundred-fifty-dollar ($250) calendar year deductible, to a maximum of three thousand dollars ($3,000) in benefits received by the insured per calendar year, to the extent not covered by Medicare. On and after January 1, 2006, no Medicare supplement contract may be sold or issued if it includes a prescription drug benefit. (8) With respect to medically necessary emergency care in a foreign country, coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of two hundred fifty dollars ($250), and a lifetime maximum benefit of fifty thousand dollars ($50,000). For purposes of this benefit, “emergency care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset. (9) With respect to the preventive medical care benefit, coverage for the following preventive health services: (A) An annual clinical preventive medical history and physical examination that may include tests and services from subparagraph (B) and patient education to address preventive health care measures. (B) The following screening tests or preventive services that are not covered by Medicare, the selection and frequency of which are determined to be medically appropriate by the attending physician: (i) Fecal occult blood test. (ii) Mammogram. (C) Influenza vaccine administered at any appropriate time during the year. Reimbursement shall be for the actual charges up to 100 percent of the Medicare-approved amount for each service, as if Medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMACPT) codes, to a maximum of one hundred twenty dollars ($120) annually under this benefit. This benefit shall not include payment for any procedure covered by Medicare. (10) With respect to the at-home recovery benefit, coverage for services to provide short-term, at-home assistance with activities of daily living for those recovering from an illness, injury, or surgery. (A) For purposes of this benefit, the following definitions shall apply: (i) “Activities of daily living” include, but are not limited to, bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self-administered, and changing bandages or other dressings. (ii) “Care provider” means a duly qualified or licensed home health aide or homemaker, or a personal care aide or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses registry. (iii) “Home” shall mean any place used by the insured as a place of residence, provided that the place would qualify as a residence for home health care services covered by Medicare. A hospital or skilled nursing facility shall not be considered the insured’s place of residence. (iv) “At-home recovery visit” means the period of a visit required to provide at-home recovery care, without any limit on the duration of the visit, except that each consecutive four hours in a 24-hour period of services provided by a care provider is one visit. (B) With respect to coverage requirements and limitations, the following shall apply: (i) At-home recovery services provided shall be primarily services that assist in activities of daily living. (ii) The covered person’s attending physician shall certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by Medicare. (iii) Coverage is limited to the following: (I) No more than the number and type of at-home recovery visits certified as necessary by the covered person’s attending physician. The total number of at-home recovery visits shall not exceed the number of Medicare-approved home health care visits under a Medicare-approved home care plan of treatment. (II) The actual charges for each visit up to a maximum reimbursement of forty dollars ($40) per visit. (III) One thousand six hundred dollars ($1,600) per calendar year. (IV) Seven visits in any one week. (V) Care furnished on a visiting basis in the insured’s home. (VI) Services provided by a care provider as defined in subparagraph (A). (VII) At-home recovery visits while the covered person is covered under the contract and not otherwise excluded. (VIII) At-home recovery visits received during the period the covered person is receiving Medicare-approved home care services or no more than eight weeks after the service date of the last Medicare-approved home health care visit. (C) Coverage is excluded for the following: (i) Home care visits paid for by Medicare or other government programs. (ii) Care provided by family members, unpaid volunteers, or providers who are not care providers. (d) The standardized Medicare supplement benefit plan “K” shall consist of the following benefits: (1) Coverage of 100 percent of the Medicare Part A hospital coinsurance amount for each day used from the 61st to the 90th day, inclusive, in any Medicare benefit period. (2) Coverage of 100 percent of the Medicare Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st to the 150th day, inclusive, in any Medicare benefit period. (3) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment for this benefit as payment in full and shall not bill the enrollee or subscriber for any balance. (4) With respect to the Medicare Part A deductible, coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation described in paragraph (10) is met. (5) With respect to skilled nursing facility care, coverage for 50 percent of the coinsurance amount for each day used from the 21st day to the 100th day, inclusive, in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation described in paragraph (10) is met. (6) With respect to hospice care, coverage for 50 percent of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation described in paragraph (10) is met. (7) Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations, until the out-of-pocket limitation described in paragraph (10) is met. (8) Except for coverage provided in paragraph (9), coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the enrollee or subscriber pays the Part B deductible, until the out-of-pocket limitation is met as described in paragraph (10). (9) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services, after the enrollee or subscriber pays the Medicare Part B deductible. (10) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of four thousand dollars ($4,000) in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary. (e) The standardized Medicare supplement benefit plan “L” shall consist of the following benefits: (1) The benefits described in paragraphs (1), (2), (3), and (9) of subdivision (d). (2) With respect to the Medicare Part A deductible, coverage for 75 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation described in paragraph (8) is met. (3) With respect to skilled nursing facility care, coverage for 75 percent of the coinsurance amount for each day used from the 21st day to the 100th day, inclusive, in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation described in paragraph (8) is met. (4) With respect to hospice care, coverage for 75 percent of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation described in paragraph (8) is met. (5) Coverage for 75 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations, until the out-of-pocket limitation described in paragraph (8) is met. (6) Except for coverage provided in paragraph (7), coverage for 75 percent of the cost sharing otherwise applicable under Medicare Part B after the enrollee or subscriber pays the Part B deductible until the out-of-pocket limitation described in paragraph (8) is met. (7) Coverage for 100 percent of the cost sharing for Medicare Part B preventive services after the enrollee or subscriber pays the Part B deductible. (8) Coverage of 100 percent of the cost sharing for Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of two thousand dollars ($2,000) in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary. (f) A contract shall not contain any provision delaying the effective date of coverage beyond the first day of the month following the date of receipt by the issuer of the applicant’s properly completed application, except that the effective date of coverage may be delayed until the 65th birthday of an applicant who is to become eligible for Medicare by reason of age if the application is received any time during the three months immediately preceding the applicant’s 65th birthday. (Amended by Stats. 2009, Ch. 10, Sec. 3. Effective July 2, 2009.)
  127. 1358.81.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    Medicare supplement contracts must meet listed benefit standards, including limits on preexisting-condition exclusions, guaranteed renewability, notice rules, suspension/reinstatement options, and required core benefits.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.81. The following standards are applicable to all Medicare supplement contracts delivered or issued for delivery in this state with an effective date on or after June 1, 2010. No contract may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement contract unless it complies with these benefit standards. No issuer may offer any 1990 standardized Medicare supplement contract for sale with an effective date on or after June 1, 2010. Benefit standards applicable to Medicare supplement contracts issued with an effective date before June 1, 2010, remain subject to the requirements of Section 1358.8. (a) The following general standards apply to Medicare supplement contracts and are in addition to all other requirements of this article. (1) A Medicare supplement contract shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The contract shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by, or received from, a physician within six months before the effective date of coverage. (2) A Medicare supplement contract shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents. (3) A Medicare supplement contract shall provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Prepaid or periodic charges may be modified to correspond with those changes. (4) A Medicare supplement contract shall not provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the enrollee or subscriber, other than the nonpayment of prepaid or periodic charges. (5) Each Medicare supplement contract shall be guaranteed renewable. (A) The issuer shall not cancel or nonrenew the contract solely on the ground of health status of the individual. (B) The issuer shall not cancel or nonrenew the contract for any reason other than nonpayment of prepaid or periodic charges or misrepresentation of the risk by the applicant that is shown by the plan to be material to the acceptance for coverage. The contestability period for Medicare supplement contracts shall be two years. (C) If the Medicare supplement contract is terminated by the group contractholder and is not replaced as provided under subparagraph (E), the issuer shall offer enrollees or subscribers an individual Medicare supplement contract which, at the option of the enrollee or subscriber, does one of the following: (i) Provides for continuation of the benefits contained in the group contract. (ii) Provides for benefits that otherwise meet the requirements of one of the standardized contracts defined in this article. (D) If an individual is an enrollee or subscriber in a group Medicare supplement contract and the individual terminates membership in the group, the issuer shall do one of the following: (i) Offer the enrollee or subscriber the conversion opportunity described in subparagraph (C). (ii) At the option of the group contractholder, offer the enrollee or subscriber continuation of coverage under the group contract. (E) (i) If a group Medicare supplement contract is replaced by another group Medicare supplement contract purchased by the same group contractholder, the issuer of the replacement contract shall offer coverage to all persons covered under the old group contract on its date of termination. Coverage under the new contract shall not result in any exclusion for preexisting conditions that would have been covered under the group contract being replaced. (ii) If a Medicare supplement contract replaces another Medicare supplement contract that has been in force for six months or more, the replacing issuer shall not impose an exclusion or limitation based on a preexisting condition. If the original coverage has been in force for less than six months, the replacing issuer shall waive any time period applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new contract to the extent the time was spent under the original coverage. (6) Termination of a Medicare supplement contract shall be without prejudice to any continuous loss that commenced while the contract was in force, but the extension of benefits beyond the period during which the contract was in force may be predicated upon the continuous total disability of the enrollee or subscriber, limited to the duration of the contract benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits shall not be considered in determining a continuous loss. (7) (A) (i) A Medicare supplement contract shall provide that benefits and prepaid or periodic charges under the contract shall be suspended at the request of the enrollee or subscriber for the period, not to exceed 24 months, in which the enrollee or subscriber has applied for, and is determined to be entitled to, medical assistance under Medi-Cal under Title XIX of the federal Social Security Act, but only if the enrollee or subscriber notifies the issuer of the contract within 90 days after the date the individual becomes entitled to assistance. Upon receipt of timely notice, the insurer shall return directly to the enrollee or subscriber that portion of the prepaid or periodic charge attributable to the period of Medi-Cal eligibility, subject to adjustment for paid claims. (ii) If suspension occurs and if the enrollee or subscriber loses entitlement to medical assistance under Medi-Cal, the Medicare supplement contract shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the enrollee or subscriber provides notice of loss of entitlement within 90 days after the date of loss and pays the prepaid or periodic charge attributable to the period, effective as of the date of termination of entitlement or equivalent coverage shall be provided if the prior contract is no longer available. (iii) Each Medicare supplement contract shall provide that benefits and prepaid or periodic charges under the contract shall be suspended (for any period that may be provided by federal regulation) at the request of the enrollee or subscriber if the enrollee or subscriber is entitled to benefits under Section 226(b) of the Social Security Act and is covered under a group health plan (as defined in Section 1862(b)(1)(A)(v) of the Social Security Act). If suspension occurs and if the enrollee or subscriber loses coverage under the group health plan, the contract shall be automatically reinstituted (effective as of the date of loss of coverage) if the enrollee or subscriber provides notice of loss of coverage within 90 days after the date of the loss and pays the applicable prepaid or periodic charge. (B) Reinstitution of coverages shall comply with all of the following requirements: (i) Not provide for any waiting period with respect to treatment of preexisting conditions. (ii) Provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension. (iii) Provide for classification of prepaid or periodic charges on terms at least as favorable to the enrollee or subscriber as the classification of the prepaid or periodic charge that would have applied to the enrollee or subscriber had the coverage not been suspended. (8) A Medicare supplement contract shall not be limited to coverage for a single disease or affliction. (9) A Medicare supplement contract shall provide an examination period of 30 days after the receipt of the contract by the applicant for purposes of review, during which time the applicant may return the contract as described in subdivision (e) of Section 1358.17. (10) A Medicare supplement contract shall additionally meet any other minimum benefit standards as established by the director. (11) Within 30 days prior to the effective date of any Medicare benefit changes, an issuer shall file with the director, and notify its subscribers and enrollees of, modifications it has made to Medicare supplement contracts. (A) The notice shall include a description of revisions to the Medicare Program and a description of each modification made to the coverage provided under the Medicare supplement contract. (B) The notice shall inform each subscriber and enrollee as to when any adjustment in the prepaid or periodic charges will be made due to changes in Medicare benefits. (C) The notice of benefit modifications and any adjustments to the prepaid or periodic charges shall be in outline form and in clear and simple terms so as to facilitate comprehension. The notice shall not contain or be accompanied by any solicitation. (12) No modifications to existing Medicare supplement coverage shall be made at the time of, or in connection with, the notice requirements of this article except to the extent necessary to eliminate duplication of Medicare benefits and any modifications necessary under the contract to provide indexed benefit adjustment. (b) With respect to the standards for basic (core) benefits for benefit plans A, B, C, D, F, high deductible F, G, M, and N, every issuer of Medicare supplement benefit plans shall make available a contract including only the following basic “core” package of benefits to each prospective enrollee or subscriber. An issuer may make available to prospective enrollees or subscribers any of the other Medicare supplement benefit plans in addition to the basic core package, but not in lieu of that package. (1) Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day, inclusive, in any Medicare benefit period. (2) Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used. (3) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance. (4) Coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations. (5) Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible. (6) Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses. (c) The following additional benefits shall be included in Medicare supplement benefit plans B, C, D, F, high deductible F, G, M, and N, consistent with the plan type and benefits for each plan as provided in Section 1358.91: (1) With respect to the Medicare Part A deductible, coverage for 100 percent of the Medicare Part A inpatient hospital deductible amount per benefit period. (2) With respect to the Medicare Part A deductible, coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period. (3) With respect to skilled nursing facility care, coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A. (4) With respect to the Medicare Part B deductible, coverage for 100 percent of the Medicare Part B deductible amount per calendar year regardless of hospital confinement. (5) With respect to 100 percent of the Medicare Part B excess charges, coverage for all of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge. (6) With respect to medically necessary emergency care in a foreign country, coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of two hundred fifty dollars ($250), and a lifetime maximum benefit of fifty thousand dollars ($50,000). For purposes of this benefit, “emergency care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset. (Added by Stats. 2009, Ch. 10, Sec. 4. Effective July 2, 2009.)
  128. 1358.9.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section sets required standards for Medicare supplement contracts and limits what benefit packages and plan designs issuers may offer.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.9. The following standards are applicable to all Medicare supplement contracts delivered or issued for delivery in this state on or after July 21, 1992, and with an effective date prior to June 1, 2010. (a) An issuer shall make available to each prospective enrollee a contract form containing only the basic (core) benefits, as defined in subdivision (b) of Section 1358.8. (b) No groups, packages, or combinations of Medicare supplement benefits other than those listed in this section shall be offered for sale in this state, except as may be permitted by subdivision (f) and by Section 1358.10. (c) Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans A to L, inclusive, listed in subdivision (e), and shall conform to the definitions in Section 1358.4. Each benefit shall be structured in accordance with the format provided in subdivisions (b), (c), (d), and (e) of Section 1358.8 and list the benefits in the order listed in subdivision (e). For purposes of this section, “structure, language, and format” means style, arrangement, and overall content of a benefit. (d) An issuer may use, in addition to the benefit plan designations required in subdivision (c), other designations to the extent permitted by law. (e) With respect to the makeup of benefit plans, the following shall apply: (1) Standardized Medicare supplement benefit plan A shall be limited to the basic (core) benefit common to all benefit plans, as defined in subdivision (b) of Section 1358.8. (2) Standardized Medicare supplement benefit plan B shall include only the following: the core benefit, plus the Medicare Part A deductible as defined in paragraph (1) of subdivision (c) of Section 1358.8. (3) Standardized Medicare supplement benefit plan C shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (3), and (8) of subdivision (c) of Section 1358.8, respectively. (4) Standardized Medicare supplement benefit plan D shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, medically necessary emergency care in a foreign country, and the at-home recovery benefit as defined in paragraphs (1), (2), (8), and (10) of subdivision (c) of Section 1358.8, respectively. (5) Standardized Medicare supplement benefit plan E shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, medically necessary emergency care in a foreign country, and preventive medical care as defined in paragraphs (1), (2), (8), and (9) of subdivision (c) of Section 1358.8, respectively. (6) Standardized Medicare supplement benefit plan F shall include only the following: the core benefit, plus the Medicare Part A deductible, the skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section 1358.8, respectively. (7) Standardized Medicare supplement benefit high deductible plan F shall include only the following: 100 percent of covered expenses following the payment of the annual high deductible plan F deductible. The covered expenses include the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (3), (5), and (8) of subdivision (c) of Section 1358.8, respectively. The annual high deductible plan F deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan F policy, and shall be in addition to any other specific benefit deductibles. The annual high deductible Plan F deductible shall be one thousand five hundred dollars ($1,500) for 1998 and 1999, and shall be based on the calendar year, as adjusted annually thereafter by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10). (8) Standardized Medicare supplement benefit plan G shall include only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, 80 percent of the Medicare Part B excess charges, medically necessary emergency care in a foreign country, and the at-home recovery benefit as defined in paragraphs (1), (2), (4), (8), and (10) of subdivision (c) of Section 1358.8, respectively. (9) Standardized Medicare supplement benefit plan H shall consist of only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, basic outpatient prescription drug benefit, and medically necessary emergency care in a foreign country as defined in paragraphs (1), (2), (6), and (8) of subdivision (c) of Section 1358.8, respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement contract sold on or after January 1, 2006. (10) Standardized Medicare supplement benefit plan I shall consist of only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, basic outpatient prescription drug benefit, medically necessary emergency care in a foreign country, and at-home recovery benefit as defined in paragraphs (1), (2), (5), (6), (8), and (10) of subdivision (c) of Section 1358.8, respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement contract sold on or after January 1, 2006. (11) Standardized Medicare supplement benefit plan J shall consist of only the following: the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care, and at-home recovery benefit as defined in paragraphs (1), (2), (3), (5), (7), (8), (9), and (10) of subdivision (c) of Section 1358.8, respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement contract sold on or after January 1, 2006. (12) Standardized Medicare supplement benefit high deductible plan J shall consist of only the following: 100 percent of covered expenses following the payment of the annual high deductible plan J deductible. The covered expenses include the core benefit, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care benefit, and at-home recovery benefit as defined in paragraphs (1), (2), (3), (5), (7), (8), (9), and (10) of subdivision (c) of Section 1358.8, respectively. The annual high deductible plan J deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan J policy, and shall be in addition to any other specific benefit deductibles. The annual deductible shall be one thousand five hundred dollars ($1,500) for 1998 and 1999, and shall be based on a calendar year, as adjusted annually thereafter by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10). The outpatient prescription drug benefit shall not be included in a Medicare supplement contract sold on or after January 1, 2006. (13) Standardized Medicare supplement benefit plan K shall consist of only those benefits described in subdivision (d) of Section 1358.8. (14) Standardized Medicare supplement benefit plan L shall consist of only those benefits described in subdivision (e) of Section 1358.8. (f) An issuer may, with the prior approval of the director, offer contracts with new or innovative benefits in addition to the benefits provided in a contract that otherwise complies with the applicable standards. The new or innovative benefits may include benefits that are appropriate to Medicare supplement contracts, that are not otherwise available and that are cost-effective and offered in a manner that is consistent with the goal of simplification of Medicare supplement contracts. On and after January 1, 2006, the innovative benefit shall not include an outpatient prescription drug benefit. (Amended by Stats. 2009, Ch. 10, Sec. 5. Effective July 2, 2009.)
  129. 1358.91.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section sets standards for Medicare supplement contracts and limits what benefit plans may be sold or advertised. Issuers must offer certain standard contract options, and some new or innovative benefits need prior director approval.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.91. The following standards are applicable to all Medicare supplement contracts delivered or issued for delivery in this state with an effective date on or after June 1, 2010. No contract may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement contract unless it complies with these benefit plan standards. Benefit plan standards applicable to Medicare supplement contracts issued with an effective date before June 1, 2010, remain subject to the requirements of Section 1358.9. (a) (1) An issuer shall make available to each prospective enrollee and subscriber a contract containing only the basic (core) benefits, as defined in subdivision (b) of Section 1358.81. (2) If an issuer makes available any of the additional benefits described in subdivision (c) of Section 1358.81, or offers standardized benefit plan K or L, as described in paragraphs (8) and (9) of subdivision (e), then the issuer shall make available to each prospective enrollee and subscriber, in addition to a contract with only the basic (core) benefits as described in paragraph (1), a contract containing either standardized benefit plan C, as described in paragraph (3) of subdivision (e), or standardized benefit plan F, as described in paragraph (5) of subdivision (e). (b) No groups, packages, or combinations of Medicare supplement benefits other than those listed in this section shall be offered for sale in this state, except as may be permitted in subdivision (f) and by Section 1358.10. (c) Benefit plans shall be uniform in structure, language, designation, and format to the standard benefit plans listed in subdivision (e) and conform to the definitions in Section 1358.4. Each benefit shall be structured in accordance with the format provided in subdivisions (b) and (c) of Section 1358.81; or, in the case of plan K or L, in paragraph (8) or (9) of subdivision (e) of Section 1358.91 and list the benefits in the order shown in subdivision (e). For purposes of this section, “structure, language, and format” means style, arrangement, and overall content of a benefit. (d) In addition to the benefit plan designations required in subdivision (c), an issuer may use other designations to the extent permitted by law. (e) With respect to the makeup of 2010 standardized benefit plans, the following shall apply: (1) Standardized Medicare supplement benefit plan A shall include only the following: the basic (core) benefits as defined in subdivision (b) of Section 1358.81. (2) Standardized Medicare supplement benefit plan B shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 1358.81, plus 100 percent of the Medicare Part A deductible as defined in paragraph (1) of subdivision (c) of Section 1358.81. (3) Standardized Medicare supplement benefit plan C shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 1358.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), (4), and (6) of subdivision (c) of Section 1358.81, respectively. (4) Standardized Medicare supplement benefit plan D shall include only the following: the basic (core) benefit, as defined in subdivision (b) of Section 1358.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), and (6) of subdivision (c) of Section 1358.81, respectively. (5) Standardized Medicare supplement benefit plan F shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 1358.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), (4), (5), and (6) of subdivision (c) of Section 1358.81, respectively. (6) Standardized Medicare supplement benefit high deductible plan F shall include only the following: 100 percent of covered expenses following the payment of the annual deductible set forth in subparagraph (B). (A) The basic (core) benefit as defined in subdivision (b) of Section 1358.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), (4), (5), and (6) of subdivision (c) of Section 1358.81, respectively. (B) The annual deductible in high deductible plan F shall consist of out-of-pocket expenses, other than premiums, for services covered by plan F, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be one thousand five hundred dollars ($1,500) and shall be adjusted annually from 1999 by the Secretary of the United States Department of Health and Human Services to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10). (7) (A) Standardized Medicare supplement benefit plan G shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 1358.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), (5), and (6) of subdivision (c) of Section 1358.81, respectively. (B) Effective January 1, 2020, the standardized benefit plans described in paragraph (4) of subdivision (a) of Section 1358.92 (redesignated high deductible plan G) may be offered to any individual who was eligible for Medicare prior to January 1, 2020. (8) Standardized Medicare supplement benefit plan K shall include only the following: (A) Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period. (B) Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period. (C) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance. (D) Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subparagraph (J). (E) Coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for posthospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subparagraph (J). (F) Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in subparagraph (J). (G) Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subparagraph (J). (H) Except for coverage provided in subparagraph (I), coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the enrollee or subscriber pays the Part B deductible until the out-of-pocket limitation is met as described in subparagraph (J). (I) Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the enrollee or subscriber pays the Part B deductible. (J) Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of four thousand dollars ($4,000) in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the United States Department of Health and Human Services. (9) Standardized Medicare supplement benefit plan L shall include only the following: (A) The benefits described in subparagraphs (A), (B), (C), and (I) of paragraph (8). (B) The benefits described in subparagraphs (D), (E), (F), (G), and (H) of paragraph (8), but substituting 75 percent for 50 percent. (C) The benefit described in subparagraph (J) of paragraph (8), but substituting two thousand dollars ($2,000) for four thousand dollars ($4,000). (10) Standardized Medicare supplement benefit plan M shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 1358.81, plus 50 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country, as defined in paragraphs (2), (3), and (6) of subdivision (c) of Section 1358.81, respectively. (11) Standardized Medicare supplement benefit plan N shall include only the following: the basic (core) benefit as defined in subdivision (b) of Section 1358.81, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country, as defined in paragraphs (1), (3), and (6) of subdivision (c) of Section 1358.81, respectively, with copayments in the following amounts: (A) The lesser of twenty dollars ($20) or the Medicare Part B coinsurance or copayment for each covered health care provider office visit, including visits to medical specialists. (B) The lesser of fifty dollars ($50) or the Medicare Part B coinsurance or copayment for each covered emergency room visit; however, this copayment shall be waived if the enrollee or subscriber is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense. (f) (1) (A) An issuer may, with the prior approval of the director, offer contracts with new or innovative benefits, in addition to the standardized benefits provided in a contract that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement contracts, are new or innovative, are not otherwise available, and are cost effective. Approval of new or innovative benefits shall not adversely impact the goal of Medicare supplement simplification. (B) New or innovative benefits shall exclude an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing, in any standardized plan. (C) Commencing July 1, 2020, the portion of the premium attributed to the new or innovative benefits shall be identified as a separate line item on the payment invoice or bill. (2) In the interest of full and fair disclosure, and to ensure the availability of necessary consumer information to current and potential enrollees or subscribers, for purposes of implementing this paragraph, the department shall collaborate with the Department of Insurance, consumer group representatives, and issuers to develop and implement policies and procedures, as necessary, including, but not limited to, all of the following: (A) The development and dissemination of information and material about any new or innovative benefits approved for sale. (B) The revision of materials described in Sections 1358.15 and 1358.18 of this code, and Sections 10192.15 and 10192.18 of the Insurance Code, as may be necessary. (C) The standardization of new or innovative benefits, as appropriate, for purposes of allowing consumer comparison of benefits, out-of-pocket costs, and premiums. (3) On or before July 1, 2020, the director may issue guidance to issuers regarding compliance with this section and that guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Any guidance issued pursuant to this subdivision shall be effective only through December 31, 2022, or until the director adopts and effects regulations pursuant to the Administrative Procedure Act, whichever occurs first. (Amended (as amended by Stats. 2019, Ch. 157, Sec. 1) by Stats. 2019, Ch. 549, Sec. 1. (SB 407) Effective January 1, 2020.)
  130. 1358.92.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. )

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    This section sets Medicare supplement plan rules for people newly eligible for Medicare on or after January 1, 2020.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 3.5. Additional Requirements for Medicare Supplement Contracts [1358.1 - 1358.24] ( Article 3.5 repealed and added by Stats. 2000, Ch. 706, Sec. 2. ) ## 1358.92. The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state to individuals newly eligible for Medicare on or after January 1, 2020. No policy or certificate that provides coverage of the Medicare Part B deductible may be advertised, solicited, delivered or issued for delivery in the state as a Medicare supplement policy or certificate to individuals newly eligible for Medicare on or after January 1, 2020. All policies must comply with the following benefit standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued to individuals eligible for Medicare before January 1, 2020, remain subject to the requirements of Section 1358.91 or 1358.9, as applicable. (a) The standards and requirements of Section 1358.91 shall apply to all Medicare supplement policies or certificates delivered or issued for delivery to individuals newly eligible for Medicare on or after January 1, 2020, with the following exceptions: (1) Standardized Medicare supplement benefit plan C is redesignated as plan D and shall provide the benefits described in paragraph (3) of subdivision (e) of Section 1358.91 but shall not provide coverage for 100 percent, or any portion, of the Medicare Part B deductible. (2) Standardized Medicare supplement benefit plan F is redesignated as plan G and shall provide the benefits described in paragraph (5) of subdivision (e) of Section 1358.91, but shall not provide coverage for 100 percent, or any portion, of the Medicare Part B deductible. (3) Standardized Medicare supplement benefit plans C, F, and high deductible plan F may not be offered to individuals newly eligible for Medicare on or after January 1, 2020. (4) Standardized Medicare supplement benefit high deductible plan F is redesignated as high deductible plan G and shall provide the benefits described for standardized Medicare supplement benefit high deductible plan F in paragraph (6) of subdivision (e) of Section 1358.91, but shall not provide coverage for 100 percent, or any portion, of the Medicare Part B deductible. The Medicare Part B deductible paid by the beneficiary shall be considered an out-of-pocket expense in meeting the annual deductible under high deductible plan G. (5) The reference to standardized Medicare supplement benefit plan C or F in paragraph (2) of subdivision (a) of Section 1358.91 shall, for purposes of this section, be deemed a reference to standardized Medicare supplement benefit plan D or G, respectively. (b) This section applies only to individuals who are newly eligible for Medicare on or after January 1, 2020. For purposes of this section, “newly eligible Medicare beneficiary” means an individual who satisfies either of the following: (1) The individual has attained 65 years of age on or after January 1, 2020. (2) The individual is entitled to benefits under Medicare Part A pursuant to Section 226(b) or 226A of the federal Social Security Act, or is deemed eligible for benefits under Section 226(a) of the federal Social Security Act, on or after January 1, 2020. (c) For purposes of subdivision (e) of Section 1358.12, in the case of an individual newly eligible for Medicare on or after January 1, 2020, any reference to standardized Medicare supplement benefit plan C, plan F, or high deductible plan F shall be deemed to be a reference to standardized Medicare supplement benefit plan D, plan G, or high deductible plan G, respectively, that meet the requirements of subdivision (a). (d) On or after January 1, 2020, the standardized Medicare supplement benefit plans described in paragraph (4) of subdivision (a) may be offered to any individual who was eligible for Medicare prior to January 1, 2020, in addition to the standardized Medicare supplement benefit plans described in subdivision (e) of Section 1358.91. (Amended by Stats. 2020, Ch. 370, Sec. 193. (SB 1371) Effective January 1, 2021.)
  131. 1359.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    The director may set standards for solicitors and related supervisory persons, classify them, require examinations, and set reasonable fees to cover the section’s costs.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1359. (a) The director may require that solicitors and solicitor firms, and principal persons engaged in the supervision of solicitation for plans of solicitor firms, meet such reasonable and appropriate standards with respect to training, experience, and other qualifications as the director finds necessary and appropriate in the public interest or for the protection of subscribers, enrollees, and plans. For such purposes, the director may do the following: (1) Appropriately classify such persons and individuals. (2) Specify that all or any portion of such standards shall be applicable to any such class. (3) Require individuals in any such class to pass examinations prescribed in accordance with such rules. (b) The director may prescribe by rule reasonable fees and charges to defray the costs of carrying out this section, including, but not limited to, fees for any examination administered by the director or under his or her direction. (Amended by Stats. 1999, Ch. 525, Sec. 85. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  132. 1360.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Plans, solicitors, solicitor firms, and representatives must not use misleading, untrue, or deceptive advertising, solicitation, evidence of coverage, verbal statements, or coverage/cost representations.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1360. (a) No plan, solicitor, solicitor firm, or representative shall use or permit the use of any advertising or solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. For purposes of this article: (1) A written or printed statement or item of information shall be deemed untrue if it does not conform to fact in any respect which is, or may be significant to an enrollee or subscriber, or potential enrollee or subscriber in a plan. (2) A written or printed statement or item of information shall be deemed misleading whether or not it may be literally true, if, in the total context in which the statement is made or such item of information is communicated, such statement or item of information may be understood by a person not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage, or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee, or potential enrollee or subscriber, in a plan, and such is not the case. (3) An evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole and with consideration given to typography and format, as well as language, shall be such as to cause a reasonable person, not possessing special knowledge of plans, and evidence of coverage therefor to expect benefits, service charges, or other advantages which the evidence of coverage does not provide or which the plan issuing such coverage or evidence of coverage does not regularly make available to enrollees or subscribers covered under such evidence of coverage. (b) No plan, or solicitor, or representative shall use or permit the use of any verbal statement which is untrue, misleading, or deceptive or make any representations about coverage offered by the plan or its cost that does not conform to fact. All verbal statements are to be held to the same standards as those for printed matter provided in subdivision (a). (Added by Stats. 1975, Ch. 941.)
  133. 1360.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    A covered person or plan must not say or imply that the director sponsored, recommended, approved, or passed upon it; a true license statement is allowed outside paid advertisements if it is not misleading.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1360.1. It is unlawful for any person, including a plan, subject to this chapter to represent or imply in any manner that the person or plan has been sponsored, recommended, or approved, or that the person’s or plan’s abilities or qualifications have in any respect been passed upon, by the director. Nothing in this section prohibits a statement (other than in a paid advertisement) that a person or plan holds a license under this chapter, if such statement is true and if the effect of such licensing is not misrepresented. (Amended by Stats. 1999, Ch. 525, Sec. 86. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  134. 1360.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    A solicitor, solicitor firm, or health care service plan must not say it represents or provides services on behalf of the Exchange unless it has a valid agreement with the Exchange.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1360.5. (a) For purposes of this section, “Exchange” means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code. (b) It is an unfair business practice for a solicitor or solicitor firm to hold himself, herself, or itself out as representing, constituting, or otherwise providing services on behalf of the Exchange unless the solicitor or solicitor firm has a valid agreement with the Exchange to engage in those activities. (c) It is an unfair business practice for a health care service plan to hold itself out as representing, constituting, or otherwise providing services on behalf of the Exchange unless the plan has a valid agreement with the Exchange to engage in those activities. (Added by Stats. 2012, Ch. 876, Sec. 2. (AB 1761) Effective January 1, 2013.)
  135. 1361.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans face rules for publishing advertisements: most ads must be filed with the director before use, some long-licensed plans can publish first if they meet conditions, and the director can order corrections or retractions for noncompliant ads.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1361. (a) Except as provided in subdivision (b), no plan shall publish or distribute, or allow to be published or distributed on its behalf, any advertisement not subject to Section 1352.1 unless (1) a true copy thereof has first been filed with the director, at least 30 days prior to any such use, or any shorter period as the director by rule or order may allow, and (2) the director by notice has not found the advertisement, wholly or in part, to be untrue, misleading, deceptive, or otherwise not in compliance with this chapter or the rules thereunder, and specified the deficiencies, within the 30 days or any shorter time as the director by rule or order may allow. (b) Except as provided in subdivision (c), a licensed plan which has been continuously licensed under this chapter for the preceding 18 months may publish or distribute or allow to be published or distributed on its behalf an advertisement not subject to Section 1352.1 without having filed the same for the director’s prior approval, if the plan and the material comply with each of the following conditions: (1) The advertisement or a material provision thereof has not been previously disapproved by the director by written notice to the plan and the plan reasonably believes that the advertisement does not violate any requirement of this chapter or the rules thereunder. (2) The plan files a true copy of each new or materially revised advertisement, used by it or by any person acting on behalf of the plan, with the director not later than 10 business days after publication or distribution of the advertisement or within such additional period as the director may allow by rule or order. (c) If the director finds that any advertisement of a plan has materially failed to comply with this chapter or the rules thereunder, the director may, by order, require the plan to publish in the same or similar medium, an approved correction or retraction of any untrue, misleading, or deceptive statement contained in the advertising, and may prohibit the plan from publishing or distributing, or allowing to be published or distributed on its behalf the advertisement or any new materially revised advertisement without first having filed a copy thereof with the director, 30 days prior to the publication or distribution thereof, or any shorter period specified in the order. An order issued under this subdivision shall be effective for 12 months from its issuance, and may be renewed by order if the advertisements submitted under this subdivision indicate difficulties of voluntary compliance with the applicable provisions of this chapter and the rules thereunder. (d) A licensed plan or other person regulated under this chapter may, within 30 days after receipt of any notice or order under this section, file a written request for a hearing with the director. (e) The director by rule or order may classify plans and advertisements and exempt certain classes, wholly or in part, either unconditionally or upon specified terms and conditions or for specified periods, from the application of subdivisions (a) and (b). (Amended by Stats. 1999, Ch. 525, Sec. 87. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  136. 1361.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Certain health care plan solicitors and representatives may not use cold lead advertising or appointment misuse to sell, solicit, or negotiate health care coverage products.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1361.1. (a) It is an unfair business practice for a solicitor, solicitor firm, or representative of a health care service plan to sell, solicit, or negotiate the purchase of health care coverage products by any of the following methods: (1) The use of a marketing technique known as cold lead advertising when marketing a Medicare product. As used in this section, “cold lead advertising” means making use directly or indirectly of a method of marketing that fails to disclose in a conspicuous manner that a purpose of the marketing is health care service plan sales solicitation and that contact will be made by a solicitor, solicitor firm, or representative of a health care service plan. (2) The use of an appointment that was made to discuss a particular Medicare product or to solicit the sale of a particular Medicare product in order to solicit the sale of another Medicare product or other health care coverage products, unless the consumer specifically agrees in advance of the appointment to discuss that other Medicare product or other types of health care coverage products during the same appointment. (b) As used in this section, “Medicare product” includes Medicare Parts A, B, C, and D, and Medicare supplement plans. (Amended by Stats. 2009, Ch. 140, Sec. 97. (AB 1164) Effective January 1, 2010.)
  137. 1362.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    This section defines key terms used in Sections 1363 and 1364, including benefits and coverage, exception, reduction, limitation, presenting for examination or sale, and disclosure form.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1362. As used in Sections 1363 and 1364: (a) “Benefits and coverage” means the health care services available under a plan contract. (b) “Exception” means any provision in a plan contract whereby coverage for a specified hazard or condition is entirely eliminated. (c) “Reduction” means any provision in a plan contract which reduces the amount of a plan benefit to some amount or period less than would be otherwise payable for medically authorized expenses or services had such a reduction not been used. (d) “Limitation” means any provision other than an exception or a reduction which restricts coverage under the plan. (e) “Presenting for examination or sale” means either (1) publication and dissemination of any brochure, mailer, advertisement, or form which constitutes a presentation of the provisions of the plan and which provides a plan enrollment or application form, or (2) consultations or discussions between prospective plan members or their contract agents and solicitors or representatives of a plan, when such consultations or discussions include presentation of formal, organized information about the plan which is intended to influence or inform the prospective member or contract holder, such as brochures, summaries, charts, slides, or other modes of information. (f) “Disclosure form” means the disclosure form, material, or information required pursuant to Section 1363. (g) For the purposes of Sections 1363 and 1364, where the definition of the term “hospital” in the plan contract omits care in any “health facility” defined pursuant to subdivision (a) or (b) of Section 1250 of this code, the omitted coverage shall constitute a limitation; and where the definition of the term “nursing home” in the plan omits care in any “health facility” defined pursuant to subdivision (c) or (d) of Section 1250 of this code, the omitted coverage shall constitute a limitation. (Added by Stats. 1975, Ch. 941.)
  138. 1363.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans must give required disclosure materials, and the department/director must set templates and disclosure requirements.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363. (a) (1) The director shall require the use by each plan of disclosure forms or materials containing information regarding the benefits, services, and terms of the plan contract as the director may require, so as to afford the public, subscribers, and enrollees with a full and fair disclosure of the provisions of the plan in readily understood language and in a clearly organized manner. Health care service plans shall present the materials in the uniform manner established by the department pursuant to paragraph (2) so as to facilitate comparisons between plan contracts of the same or other types of plans. Nothing contained in this chapter shall preclude the director from permitting the disclosure form to be included with the evidence of coverage or plan contract. (2) The department shall develop standard templates for the disclosure form and evidence of coverage. The standard templates for the disclosure form and evidence of coverage may be consolidated into a single standard template. The standard template or templates may include standard definitions, notice and explanatory language, benefit and limitation descriptions, and any other information or formatting in the template that the director determines, consistent with the goals of this section. The department shall consult with the Department of Insurance and interested stakeholders in developing standard templates under this section. (b) The disclosure form shall provide for at least the following information, in concise and specific terms, relative to the plan, together with additional information as may be required by the director, in connection with the plan or plan contract: (1) The principal benefits and coverage of the plan, including coverage for acute care and subacute care. (2) The exceptions, reductions, and limitations that apply to the plan. (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 in obtaining coverage under the plan. (5) The terms under which the plan may be renewed by the plan member, including any reservation by the plan of any right to change premiums. (6) A statement that the disclosure form is a summary only, and that the plan contract itself should be consulted to determine governing contractual provisions. The first page of the disclosure form shall contain a notice that conforms with all of the following conditions: (A) (i) States that the evidence of coverage discloses the terms and conditions of coverage. (ii) States, with respect to individual plan contracts, small group plan contracts, and any other group plan contracts for which health care services are not negotiated, that the applicant has a right to view the evidence of coverage prior to enrollment, and, if the evidence of coverage is not combined with the disclosure form, the notice shall specify where the evidence of coverage can be obtained prior to enrollment. (B) Includes a statement that the disclosure and the evidence of coverage should be read completely and carefully and that individuals with special health care needs should read carefully those sections that apply to them. (C) Includes the plan’s telephone number or numbers that may be used by an applicant to receive additional information about the benefits of the plan or a statement where the telephone number or numbers are located in the disclosure form. (D) For individual contracts, and small group plan contracts as defined in Article 3.1 (commencing with Section 1357), the disclosure form shall state where the health plan benefits and coverage matrix is located. (E) Is printed in type no smaller than that used for the remainder of the disclosure form and is displayed prominently on the page. (7) A statement as to when benefits shall cease in the event of nonpayment of the prepaid or periodic charge and the effect of nonpayment upon an enrollee who is hospitalized or undergoing treatment for an ongoing condition. (8) To the extent that the plan permits a free choice of provider to its subscribers and enrollees, the statement shall disclose the nature and extent of choice permitted and the financial liability that is, or may be, incurred by the subscriber, enrollee, or a third party by reason of the exercise of that choice. (9) A summary of the provisions required by subdivision (g) of Section 1373, if applicable. (10) If the plan utilizes arbitration to settle disputes, a statement of that fact. (11) A summary of, and a notice of the availability of, the process the plan uses to authorize, modify, or deny health care services under the benefits provided by the plan, pursuant to Sections 1363.5 and 1367.01. (12) A description of any limitations on the patient’s choice of primary care physician, specialty care physician, or nonphysician health care practitioner, based on service area and limitations on the patient’s choice of acute care hospital care, subacute or transitional inpatient care, or skilled nursing facility. (13) General authorization requirements for referral by a primary care physician to a specialty care physician or a nonphysician health 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 opinion pursuant to Section 1383.15. (16) Information concerning the right of an enrollee to request an independent review in accordance with Article 5.55 (commencing with Section 1374.30). (17) A notice as required by Section 1364.5. (c) (1) As of July 1, 1999, the director shall require each plan offering a contract to an individual or small group to provide with the disclosure form for individual and small group plan contracts a uniform health plan benefits and coverage matrix containing the plan’s major provisions in order to facilitate comparisons between plan contracts. The uniform matrix shall include the following category descriptions together with the corresponding copayments and 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: THIS MATRIX IS INTENDED TO BE USED TO HELP YOU COMPARE COVERAGE BENEFITS AND IS A SUMMARY ONLY. THE EVIDENCE OF COVERAGE AND PLAN CONTRACT SHOULD BE CONSULTED FOR A DETAILED DESCRIPTION OF COVERAGE BENEFITS AND LIMITATIONS. (3) (A) A health care service plan contract subject to Section 2715 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-15), shall satisfy the requirements of this subdivision by providing the uniform summary of benefits and coverage required under Section 2715 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-15) and any rules or regulations issued thereunder. A health care service plan that issues the uniform summary of benefits referenced in this paragraph shall do both of the following: (i) Ensure that all applicable benefit disclosure requirements specified in this chapter and in Title 28 of the California Code of Regulations are met in other health plan documents provided to enrollees under the provisions of this chapter. (ii) Consistent with applicable law, advise applicants and enrollees, in a prominent place in the plan documents referenced in subdivision (a), that enrollees are not financially responsible in payment of emergency care services, in any amount that the health care service plan is obligated to pay, beyond the enrollee’s copayments, coinsurance, and deductibles as provided in the enrollee’s health care service plan contract. (B) Commencing October 1, 2016, the uniform summary of benefits and coverage referenced in this paragraph shall constitute a vital document for the purposes of Section 1367.04. Not later than July 1, 2016, the department shall develop written translations of the template uniform summary of benefits and coverage for all language groups identified by the State Department of Health Care Services in all plan letters as of August 27, 2014, for translation services pursuant to Section 14029.91 of the Welfare and Institutions Code, except for any language group for which the United States Department of Labor has already prepared a written translation. Not later than July 1, 2016, the department shall make available on its internet website written translations of the template uniform summary of benefits and coverage developed by the department, and written translations prepared by the United States Department of Labor, if available, for any language group to which this subparagraph applies. (C) Subdivision (d) shall not apply to a health care service plan contract subject to subparagraph (A). (4) A health care service plan may satisfy the requirements of this subdivision for the dental services offered under a contract subject to Section 1363.04 by providing the uniform benefit disclosure benefits and coverage disclosure matrix consistent with the requirements of that section. (d) Nothing in this section shall prevent a plan from using appropriate footnotes or disclaimers to reasonably and fairly describe coverage arrangements in order to clarify any part of the matrix that may be unclear. (e) All plans, solicitors, and representatives of a plan shall, when presenting any plan contract for examination or sale to an individual prospective plan member, provide the individual with a properly completed disclosure form, as prescribed by the director pursuant to this section for each plan so examined or sold. (f) In the case of group contracts, the completed disclosure form and evidence of coverage shall be presented to the contractholder upon delivery of the completed health care service plan agreement. (g) Group contractholders shall disseminate copies of the completed disclosure form to all persons eligible to be a subscriber under the group contract at the time those persons are offered the plan. 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 be disseminated copies of the evidence of coverage to all applicants, upon request, prior to enrollment and to all subscribers enrolled under the group contract. (h) In the case of conflicts between the group contract and the evidence of coverage, the provisions of the evidence of coverage shall be binding upon the plan notwithstanding any provisions in the group contract that may be less favorable to subscribers or enrollees. (i) In addition to the other disclosures required by this section, every health care service plan and any agent or employee of the plan shall, when presenting a plan for examination or sale to any individual purchaser or the representative of a group consisting of 25 or fewer individuals, disclose in writing the ratio of premium costs to health services paid for plan contracts with individuals and with groups of the same or similar size for the plan’s preceding fiscal year. A plan may report that information by geographic area, provided the plan identifies the geographic area and reports information applicable to that geographic area. (j) Subdivision (c) shall not apply to any coverage provided by a plan for the Medi-Cal program or the Medicare Program pursuant to Title XVIII and Title XIX of the federal Social Security Act. (k) Medi-Cal managed care plan contracts entered into with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code shall not be required to use the standard templates developed by the department pursuant to this section. (l) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of issuing and modifying templates and all-plan letters or similar instructions, without taking regulatory action. (Amended by Stats. 2023, Ch. 42, Sec. 13. (AB 118) Effective July 10, 2023.)
  139. 1363.01.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health plans that cover prescription drug benefits must give enrollees and the public certain notices and formulary information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.01. (a) Every plan that covers prescription drug benefits shall provide notice in the evidence of coverage and disclosure form to enrollees regarding whether the plan uses a formulary. The notice shall be in language that is easily understood and in a format that is easy to understand. The notice shall include an explanation of what a formulary is, how the plan determines which prescription drugs are included or excluded, and how often the plan reviews the contents of the formulary. (b) Every plan that covers prescription drug benefits shall provide to members of the public, upon request, information regarding whether a specific drug or drugs are on the plan’s formulary. Notice of the opportunity to secure this information from the plan, including the plan’s telephone number for making a request of this nature and the Internet Web site where the formulary is posted under Section 1367.205, shall be included in the evidence of coverage and disclosure form to enrollees. (c) Every plan shall notify enrollees, and members of the public who request formulary information, that the presence of a drug on the plan’s formulary does not guarantee that an enrollee will be prescribed that drug by his or her prescribing provider for a particular medical condition. (Amended by Stats. 2014, Ch. 575, Sec. 2. (SB 1052) Effective January 1, 2015.)
  140. 1363.02.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Certain health care service plans must add a reproductive-services notice to provider directories and related coverage documents.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.02. (a) The Legislature finds and declares that the right of every patient to receive basic information necessary to give full and informed consent is a fundamental tenet of good public health policy and has long been the established law of this state. Some hospitals and other providers do not provide a full range of reproductive health services and may prohibit or otherwise not provide sterilization, infertility treatments, abortion, or contraceptive services, including emergency contraception. It is the intent of the Legislature that every patient be given full and complete information about the health care services available to allow patients to make well informed health care decisions. (b) On or before July 1, 2001, a health care service plan that covers hospital, medical, and surgical benefits shall do both of the following: (1) Include the following statement, in at least 12-point boldface type, at the beginning of each provider directory: “Some hospitals and other providers do not provide one or more of the following services that may be covered under your plan contract and that you or your family member might need: family planning; contraceptive services, including emergency contraception; sterilization, including tubal ligation at the time of labor and delivery; infertility treatments; or abortion. You should obtain more information before you enroll. Call your prospective doctor, medical group, independent practice association, or clinic, or call the health plan at (insert the health plan’s membership services number or other appropriate number that individuals can call for assistance) to ensure that you can obtain the health care services that you need.” (2) Place the statement described in paragraph (1) in a prominent location on any provider directory posted on the health plan’s website, if any, and include this statement in a conspicuous place in the plan’s evidence of coverage and disclosure forms. (c) A health care service plan shall not be required to provide the statement described in paragraph (1) of subdivision (b) in a service area in which none of the hospitals, health facilities, clinics, medical groups, or independent practice associations with which it contracts limit or restrict any of the reproductive services described in the statement. (d) This section shall not apply to specialized health care service plans or Medicare supplement plans. (Added by Stats. 2000, Ch. 347, Sec. 2. Effective January 1, 2001.)
  141. 1363.03.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans that cover prescription drug benefits and issue cards for claims processing must give enrollees a uniform prescription drug information card with specified content.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.03. (a) Every health care service plan that covers prescription drug benefits and that issues a card to enrollees for claims processing purposes shall issue to each of its enrollees a uniform card containing uniform prescription drug information. The uniform prescription drug information card shall, at a minimum, include the following information: (1) The name or logo of the benefit administrator or health care service plan issuing the card, which shall be displayed on the front side of the card. (2) The enrollee’s identification number, or the subscriber’s identification number when the enrollee is a dependent who accesses services using the subscriber’s identification number, which shall be displayed on the front side of the card. (3) A telephone number that pharmacy providers may call for assistance. (4) Information required by the benefit administrator or health care service plan that is necessary to commence processing the pharmacy claim, except as provided for in paragraph (5). (5) A health care service plan shall not be required to print any of the following information on a member card: (A) Any number that is the same for all of its members, provided that the health care service plan provides this number to the pharmacy on an annual basis. (B) Any information that may result in fraudulent use of the card. (C) Any information that is otherwise prohibited from being included on the card. (b) Beginning July 1, 2002, the new uniform prescription drug information card required by subdivision (a) shall be issued by a health care service plan to an enrollee upon enrollment or upon any change in the enrollee’s coverage that impacts the data content or format of the card. (c) Nothing in this section requires a health care service plan to issue a separate card for prescription drug coverage if the plan issues a card for health care coverage in general and the card is able to accommodate the information required by subdivision (a). (d) This bill shall not apply to a nonprofit health care service plan with at least 3.5 million enrollees that owns or operates its own pharmacies and that provides health care services to enrollees in a specific geographic area through a mutually exclusive contract with a single medical group. (e) “Card” as used in this section includes other technology that performs substantially the same function as a card. (f) For purposes of this section, if a health care service plan delegates responsibility for issuing the uniform prescription drug information card to a contractor or agent, then the contract between the health care service plan and its contractor or agent shall require compliance with this section. (Added by Stats. 2001, Ch. 622, Sec. 1. Effective January 1, 2002.)
  142. 1363.04.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans covering dental services must use and provide a uniform benefits and coverage disclosure matrix, and several related parties must make it available in specified situations.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.04. (a) For plan years on and after January 1, 2021, or 12 months after regulations are adopted under subdivision (f), whichever occurs later, a health care service plan that issues, sells, renews, or offers a contract that covers dental services in this state, in addition to any other applicable disclosure requirements, shall utilize a uniform benefits and coverage disclosure matrix, which shall be developed by the department, in conjunction with the Department of Insurance, and in consultation with stakeholders. At a minimum, the benefits and coverage disclosure matrix shall require the health care service plan to make available all of the following information relating to covered dental services, together with the corresponding copayments or coinsurance and limitations: (1) The annual overall plan deductible. (2) The annual benefit limit. (3) Coverage for the following categories: (A) Preventive and diagnostic services. (B) Basic services. (C) Major services. (D) Orthodontia services. (4) Dental plan reimbursement levels and estimated enrollee cost share for services. (5) Waiting periods. (6) Examples to illustrate coverage and estimated enrollee costs of commonly used benefits. The examples shall include at least one service from each of the following categories listed in paragraph (3): (A) Preventive and diagnostic services. (B) Basic services. (C) Major services. (b) All plans, solicitors, and representatives of a plan that issue, sell, renew, or offer a health care plan contract that covers dental services shall, when presenting any plan contract for examination or sale to an individual prospective plan member, make available to the individual a properly completed benefits and coverage disclosure matrix, as prescribed by the director pursuant to this section for each dental plan examined or sold. (c) In the case of group contracts for dental services, the completed benefits and coverage disclosure matrix and evidence of coverage shall be made available to the contractholder upon delivery of the completed health care service plan agreement. (d) Group contractholders shall make available the completed benefits and coverage disclosure matrix to all persons eligible to be a subscriber under the group contract at the time those persons are offered the dental plan. If the individual group members are offered a choice of dental plans, separate matrices shall be made available for each dental plan offered. Each group contractholder shall also make available copies of the evidence of coverage to all applicants, upon request, prior to enrollment and to all subscribers enrolled under the group contract. (e) The health care service plan offering a dental product in the individual, small, or large group market shall make available the benefits and coverage disclosure matrix to all individuals newly enrolling for coverage, experiencing a special enrollment event, and renewing coverage, and shall make available the benefits and coverage disclosure matrix to all other enrollees upon request. (f) (1) The department shall adopt emergency regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code to implement this section. The department shall consult with the Department of Insurance in adopting the emergency regulations, as appropriate. The adoption of regulations pursuant to this section shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health, or safety. (2) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, emergency regulations adopted pursuant to this section shall not be subject to the review and approval of the Office of Administrative Law. The regulations shall become effective immediately upon filing with the Secretary of State. The regulations shall not remain in effect more than 120 days unless the adopting agency complies with all of the provisions of Chapter 3.5 (commencing with Section 11340) as required by subdivision (c) of Section 11346.1 of the Government Code. (g) This section does not apply to Medi-Cal dental managed care contracts authorized under Chapter 7 (commencing with Section 14000) and Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code. (Added by Stats. 2018, Ch. 933, Sec. 2. (SB 1008) Effective January 1, 2019.)
  143. 1363.05.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Plans offering or supplementing Medicare benefits must add a required HICAP statement to disclosure forms and notify certain existing enrollees by the stated deadline.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.05. (a) For every plan contract that provides or supplements Medicare benefits, a plan shall include within its disclosure form the following statement in at least 12-point type: “For additional information concerning covered benefits, contact the Health Insurance Counseling and Advocacy Program (HICAP) or your agent. HICAP provides health insurance counseling for California senior citizens. Call the HICAP toll-free telephone number, 1-800-434-0222, for a referral to your local HICAP office. HICAP is a service provided free of charge by the State of California.” (b) For every plan contract that provides or supplements Medicare benefits, a plan shall modify its disclosure forms to comply with subdivision (a) no later than January 1, 1998. (c) Every health care service plan that provides or supplements Medicare benefits shall notify those current enrollees who enrolled prior to the modification of disclosure forms to include the disclosure statement required by subdivision (a) of the availability of the HICAP program. That notification shall include the same language as is required by subdivision (a). That notification may be by free standing document and shall be made no later than January 1, 1998. (Added by Stats. 1996, Ch. 1113, Sec. 1. Effective January 1, 1997.)
  144. 1363.06.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    The department and the Department of Insurance must create and publish comparative benefit matrices, and health care service plans must submit required benefit information and updates.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.06. (a) The Department of Managed Health Care and the Department of Insurance shall compile information as required by this section and Section 10127.14 of the Insurance Code into two comparative benefit matrices. The first matrix shall compare benefit packages offered pursuant to Section 1373.62 and Section 10127.15 of the Insurance Code. The second matrix shall compare benefit packages offered pursuant to Sections 1366.35, 1373.6, and 1399.804 and Sections 10785, 10901.2, and 12682.1 of the Insurance Code. (b) The comparative benefit matrix shall include: (1) Benefit information submitted by health care service plans pursuant to subdivision (d) and by health insurers pursuant to Section 10127.14 of the Insurance Code. (2) The following statements in at least 12-point type at the top of the matrix: (A) “This benefit summary is intended to help you compare coverage and benefits and is a summary only. For a more detailed description of coverage, benefits, and limitations, please contact the health care service plan or health insurer.” (B) “The comparative benefit summary is updated annually, or more often if necessary to be accurate.” (C) “The most current version of this comparative benefit summary is available on (address of the plan’s or insurer’s Internet Web site).” This subparagraph applies only to those plans or insurers that maintain an Internet Web site. (3) The telephone number or numbers that may be used by an applicant to contact either the department or the Department of Insurance, as appropriate, for further assistance. (c) The Department of Managed Health Care and the Department of Insurance shall jointly prepare two standardized templates for use by health care service plans and health insurers in submitting the information required pursuant to subdivision (d) and subdivision (d) of Section 10127.14 of the Insurance Code. The templates shall be exempt from the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (d) Health care service plans, except specialized health care service plans, shall submit the following to the department by January 31, 2003, and annually thereafter: (1) A summary explanation of the following for each product described in subdivision (a). (A) Eligibility requirements. (B) The full premium cost of each benefit package in the service area in which the individual and eligible dependents work or reside. (C) When and under what circumstances benefits cease. (D) The terms under which coverage may be renewed. (E) Other coverage that may be available if benefits under the described benefit package cease. (F) The circumstances under which choice in the selection of physicians and providers is permitted. (G) Lifetime and annual maximums. (H) Deductibles. (2) A summary explanation of coverage for the following, together with the corresponding copayments and limitations, for each product described in subdivision (a): (A) Professional services. (B) Outpatient services. (C) Hospitalization services. (D) Emergency health coverage. (E) Ambulance services. (F) Prescription drug coverage. (G) Durable medical equipment. (H) Mental health services. (I) Residential treatment. (J) Chemical dependency services. (K) Home health services. (L) Custodial care and skilled nursing facilities. (3) The telephone number or numbers that may be used by an applicant to access a health care service plan customer service representative and to request additional information about the plan contract. (4) Any other information specified by the department in the template. (e) Each health care service plan shall provide the department with updates to the information required by subdivision (d) at least annually, or more often if necessary to maintain the accuracy of the information. (f) The department and the Department of Insurance shall make the comparative benefit matrices available on their respective Internet Web sites and to the health care service plans and health insurers for dissemination as required by Section 1373.6 and Section 12682.1 of the Insurance Code, after confirming the accuracy of the description of the matrices with the health care service plans and health insurers. (g) As used in this section and Section 1363.07, “benefit matrix” shall have the same meaning as benefit summary. (h) (1) This section shall be inoperative on January 1, 2014. (2) If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this section shall become operative on the date of that repeal or amendment. (3) For purposes of this subdivision, “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care Education and Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued pursuant to that law. (Amended by Stats. 2013, Ch. 441, Sec. 1. (AB 1180) Effective October 1, 2013. Inoperative, by its own provisions, on January 1, 2014, subject to condition for resuming operation.)
  145. 1363.07.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans must distribute and make available the comparative benefit matrix, and websites must provide a downloadable copy if the plan has a website.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.07. (a) Each health care service plan shall send copies of the comparative benefit matrix prepared pursuant to Section 1363.06 on an annual basis, or more frequently as the matrix is updated by the department and the Department of Insurance, to solicitors and solicitor firms and employers with whom the plan contracts. (b) Each health care service plan shall require its representatives and solicitors and soliciting firms with which it contracts, to provide a copy of the comparative benefit matrix to individuals when presenting any benefit package for examination or sale. (c) Each health care service plan that maintains an Internet Web site shall make a downloadable copy of the comparative benefit matrix described in Section 1363.06 available through a link on its site to the Internet Web sites of the department and the Department of Insurance. (d) (1) This section shall be inoperative on January 1, 2014. (2) If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this section shall become operative on the date of that repeal or amendment. (3) For purposes of this subdivision, “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care Education and Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued pursuant to that law. (Amended by Stats. 2013, Ch. 441, Sec. 2. (AB 1180) Effective October 1, 2013. Inoperative, by its own provisions, on January 1, 2014, subject to condition for resuming operation.)
  146. 1363.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Certain health care service plans must give a clear disclosure about binding arbitration and jury-trial waivers.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.1. Any health care service plan that includes terms that require binding arbitration to settle disputes and that restrict, or provide for a waiver of, the right to a jury trial shall include, in clear and understandable language, a disclosure that meets all of the following conditions: (a) The disclosure shall clearly state whether the plan uses binding arbitration to settle disputes, including specifically whether the plan uses binding arbitration to settle claims of medical malpractice. (b) The disclosure shall appear as a separate article in the agreement issued to the employer group or individual subscriber and shall be prominently displayed on the enrollment form signed by each subscriber or enrollee. (c) The disclosure shall clearly state whether the subscriber or enrollee is waiving his or her right to a jury trial for medical malpractice, other disputes relating to the delivery of service under the plan, or both, and shall be substantially expressed in the wording provided in subdivision (a) of Section 1295 of the Code of Civil Procedure. (d) In any contract or enrollment agreement for a health care service plan, the disclosure required by this section shall be displayed immediately before the signature line provided for the representative of the group contracting with a health care service plan and immediately before the signature line provided for the individual enrolling in the health care service plan. (Added by Stats. 1994, Ch. 653, Sec. 3. Effective January 1, 1995.)
  147. 1363.2.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    By July 1, 1999, the disclosure form under Section 1363 must include a statement encouraging enrollees to use 911 for emergency medical conditions when appropriate.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.2. On or before July 1, 1999, the disclosure form required pursuant to Section 1363 shall also contain a statement that enrollees are encouraged to use appropriately the “911” emergency response system, in areas where the system is established and operating, when they have an emergency medical condition that requires an emergency response. (Added by Stats. 1998, Ch. 979, Sec. 2. Effective January 1, 1999.)
  148. 1363.3.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    The department may create standard templates for certain health plan documents, and the director may require filing of documents made with those templates for compliance review.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.3. (a) The department may develop standard templates for a schedule of benefits, an explanation of benefits, a cost-sharing summary, or any similar document. The standard template or templates may include standard definitions, notice and explanatory language, benefit and limitation descriptions, and any other information or formatting in the template that the director determines would provide the public, subscribers, and enrollees with a full and fair disclosure of the provisions of the plan in readily understood language and in a clearly organized manner. The department shall consult with the Department of Insurance and interested stakeholders in developing standard templates under this section. (b) The department may require health care service plans to utilize the standard templates developed by the department pursuant to subdivision (a) for any schedule of benefits, explanation of benefits, cost-sharing summaries, or similar documents published or distributed. (c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of issuing and modifying templates and all-plan letters or similar instructions, without taking regulatory action. (d) The director may require a health care service plan to file any document the health care service plan developed using a standard template developed by the department for compliance review. (Added by Stats. 2023, Ch. 42, Sec. 14. (AB 118) Effective July 10, 2023.)
  149. 1363.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans must disclose their authorization, modification, and denial processes and related criteria or guidelines, and some disclosures must be accompanied by a notice.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1363.5. (a) A plan shall disclose or provide for the disclosure to the director and to network providers the process the plan, its contracting provider groups, or any entity with which the plan contracts for services that include utilization review or utilization management functions, uses to authorize, modify, or deny health care services under the benefits provided by the plan, including coverage for subacute care, transitional inpatient care, or care provided in skilled nursing facilities. A plan shall also disclose those processes to enrollees or persons designated by an enrollee, or to any other person or organization, upon request. The disclosure to the director shall include the policies, procedures, and the description of the process that are filed with the director pursuant to subdivision (b) of Section 1367.01. (b) The criteria or guidelines used by plans, or any entities with which plans contract for services that include utilization review or utilization management functions, to determine whether to authorize, modify, or deny health care services shall: (1) Be developed with involvement from actively practicing health care providers. (2) Be consistent with sound clinical principles and processes. (3) Be evaluated, and updated if necessary, at least annually. (4) If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the enrollee in that specified case. (5) Be available to the public upon request. A plan shall only be required to disclose the criteria or guidelines for the specific procedures or conditions requested. A plan may charge reasonable fees to cover administrative expenses related to disclosing criteria or guidelines pursuant to this paragraph, limited to copying and postage costs. The plan may also make the criteria or guidelines available through electronic communication means. (c) The disclosure required by paragraph (5) of subdivision (b) shall be accompanied by the following notice: “The materials provided to you are guidelines used by this plan to authorize, modify, or deny care for persons with similar illnesses or conditions. Specific care and treatment may vary depending on individual need and the benefits covered under your contract.” (Amended by Stats. 2000, Ch. 1067, Sec. 6. Effective January 1, 2001.)
  150. 1364.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    A plan’s advertising and consumer information used to attract members must include any supplemental disclosure information the director requires when needed for full and fair disclosure.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1364. Where the director finds it necessary in the interest of full and fair disclosure, all advertising and other consumer information disseminated by a plan for the purpose of influencing persons to become members of a plan shall contain such supplemental disclosure information as the director may require. (Amended by Stats. 1999, Ch. 525, Sec. 90. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  151. 1364.1.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    A health care service plan must notify affected enrollees within 30 days after receiving the specified notice about a hospital reducing or eliminating emergency services.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1364.1. Within 30 days of receiving the notice required by Section 1255.1, a health care service plan shall notify, or provide for the notification of, enrollees who have selected a medical group or independent practice association that uses a hospital that the hospital will reduce or eliminate its emergency services. The plan may require that its contracting medical groups and independent practice associations that use the hospital provide this notice. The notice shall include a list of alternate hospitals that may be used by enrollees for emergency services. (Added by Stats. 1998, Ch. 995, Sec. 5. Effective January 1, 1999.)
  152. 1364.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans must file privacy policies with the director, provide a confidentiality statement on request, and include a required notice in coverage materials.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1364.5. (a) On or before July 1, 2001, every health care service plan shall file with the director a copy of their policies and procedures to protect the security of patient medical information to ensure compliance with the Confidentiality of Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code). Any amendment to the policies and procedures shall be filed in accordance with Section 1352. (b) On and after July 1, 2001, every health care service plan shall, upon request, provide to enrollees and subscribers a written statement that describes how the contracting organization or health care service plan maintains the confidentiality of medical information obtained by and in the possession of the contracting organization or the health care service plan. (c) The statement required by subdivision (b) shall be in at least 12-point type and meet the following requirements: (1) The statement shall describe how the contracting organization or health care service plan protects the confidentiality of medical information pursuant to this article and inform patients or enrollees and subscribers that any disclosure of medical information beyond the provisions of the law is prohibited. (2) The statement shall describe the types of medical information that may be collected and the type of sources that may be used to collect the information, the purposes for which the contracting organization or plan will obtain medical information from other health care providers. (3) The statement shall describe the circumstances under which medical information may be disclosed without prior authorization, pursuant to Section 56.10 of the Civil Code. (4) The statement shall describe how patients or enrollees and subscribers may obtain access to medical information created by and in the possession of the contracting organization or health care service plan, including copies of medical information. (d) On and after July 1, 2001, every health care service plan shall include in its evidence of coverage or disclosure form the following notice, in 12-point type: A STATEMENT DESCRIBING (NAME OR PLAN OR “OUR”) POLICIES AND PROCEDURES FOR PRESERVING THE CONFIDENTIALITY OF MEDICAL RECORDS IS AVAILABLE AND WILL BE FURNISHED TO YOU UPON REQUEST. (Amended by Stats. 2000, Ch. 1067, Sec. 7. Effective January 1, 2001.)
  153. 1365.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    A health care service plan may cancel or not renew enrollment only for listed reasons, and must keep coverage and follow review/reinstatement procedures in some cases.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1365. (a) An enrollment or a subscription shall not be canceled or not renewed except for the following reasons: (1) (A) Except as otherwise specified in subparagraph (C), for nonpayment of the required premiums by the individual, employer, or contractholder if the individual, employer, or contractholder has been duly notified and billed for the charge and at least a 30-day grace period has elapsed since the date of notification or, if longer, the period of time required for notice and any other requirements pursuant to Section 2703, 2712, or 2742 of the federal Public Health Service Act (42 U.S.C. Secs. 300gg-2, 300gg-12, and 300gg-42) and any subsequent rules or regulations has elapsed. (B) Pursuant to subparagraph (A), a health care service plan shall continue to provide coverage as required by the individual’s, employer’s, or contractholder’s health care service plan contract during the 30-day period described in subparagraph (A). (C) (i) For nonpayment of the required premiums by an individual who receives advance payments of the premium tax credit authorized by Section 36B of the Internal Revenue Code or advanced premium assistance subsidy authorized by Section 100800 of the Government Code, or both, if the individual has been duly notified and billed for the charge and a grace period of three consecutive months has elapsed since the last day of paid coverage. (ii) During the first month of the three-month grace period described in clause (i), a health care service plan shall continue to do both of the following: (I) Collect advance payments of the federal premium tax credit or state advanced premium assistance subsidy, or both, on behalf of the enrollee. (II) Provide coverage as required by the individual’s health care service plan contract. (iii) If the individual exhausts the three-month grace period described in clause (i) without paying all outstanding premiums due, the health care service plan shall return both of the following: (I) Advance payments of the premium tax credit paid on behalf of the individual for the second and third months of the three-month grace period described in clause (i), pursuant to Section 156.270(e)(2) of Title 45 of the Code of Federal Regulations. (II) The advanced premium assistance subsidy paid on behalf of the individual for the second and third months of the three-month grace period described in clause (i), pursuant to subdivision (a) of Section 100805 of the Government Code. (iv) A health care service plan shall comply with all federal and state laws and regulations relating to cancellations, terminations, or nonrenewals of coverage due to nonpayment of premiums by individuals who receive advance payments of the federal premium tax credit or state advanced premium assistance subsidy. For a health care service plan contract issued, amended, or renewed on or after January 1, 2020, all requirements applicable to cancellations, terminations, or nonrenewals of coverage due to nonpayment of premiums by individuals who receive advance payments of premium tax credit authorized by Section 36B of the Internal Revenue Code shall apply to cancellations, terminations, or nonrenewals of coverage due to nonpayment of premiums by individuals who receive advanced premium assistance subsidy authorized by Section 100800 of the Government Code. (2) The plan demonstrates fraud or an intentional misrepresentation of material fact under the terms of the health care service plan contract by the individual contractholder or employer. (3) In the case of an individual health care service plan contract, the individual subscriber no longer resides, lives, or works in the plan’s service area, but only if the coverage is terminated uniformly without regard to any health status-related factor of covered individuals. (4) In the case of a group health care service plan contract, violation of a material contract provision relating to employer contribution or group participation rates by the contractholder or employer. (5) If the plan ceases to provide or arrange for the provision of health benefits for new health care service plan contracts in the individual or group market, or all markets, in this state, provided, however, that the following conditions are satisfied: (A) Notice of the decision to cease new or existing health benefit plans in the state is provided to the director, the individual or group contractholder or employer, and the enrollees covered under those contracts, at least 180 days prior to discontinuation of those contracts. (B) Health benefit plans shall not be canceled for 180 days after the date of the notice required under subparagraph (A) and, for that business of a plan that remains in force, any plan that ceases to offer for sale new health benefit plans shall continue to be governed by this section with respect to business conducted under this section. (C) Except as authorized under subdivision (b) of Section 1357.09 and Section 1357.10, a plan that ceases to write new health benefit plans in the individual or group market, or all markets, in this state shall be prohibited from offering for sale health benefit plans in that market or markets in this state for a period of five years from the date of the discontinuation of the last coverage not so renewed. (6) If the plan withdraws a health benefit plan from the market, provided that all of the following conditions are satisfied: (A) The plan notifies all affected subscribers, contractholders, employers, and enrollees and the director at least 90 days prior to the discontinuation of the plan. (B) The plan makes available to the individual or group contractholder or employer all health benefit plans that it makes available to new individual or group business, respectively. (C) In exercising the option to discontinue a health benefit plan under this paragraph and in offering the option of coverage under subparagraph (B), the plan acts uniformly without regard to the claims experience of the individual or contractholder or employer, or any health status-related factor relating to enrollees or potential enrollees. (D) For small employer health care service plan contracts offered under Article 3.1 (commencing with Section 1357), the premium for the new plan contract complies with the renewal increase requirements set forth in Section 1357.12. This subparagraph shall not apply after December 31, 2013. (7) In the case of a group health benefit plan, if an individual or employer ceases to be a member of a guaranteed association, as defined in subdivision (n) of Section 1357, but only if that coverage is terminated under this paragraph uniformly without regard to any health status-related factor relating to any enrollee. (b) (1) An enrollee or subscriber who alleges that an enrollment or subscription has been or will be improperly canceled, rescinded, or not renewed may request a review by the director pursuant to Section 1368. (2) If the director determines that a proper complaint exists, the director shall notify the plan and the enrollee or subscriber who requested the review. (3) If, after review, the director determines that the cancellation, rescission, or failure to renew is contrary to existing law, the director shall order the plan to reinstate the enrollee or subscriber. Within 15 days after receipt of that order, the health care service plan shall request a hearing or reinstate the enrollee or subscriber. (4) If an enrollee or subscriber requests a review of the health care service plan’s determination to cancel or rescind or failure to renew the enrollee’s or subscriber’s health care service plan contract pursuant to this section, the health care service plan shall continue to provide coverage to the enrollee or subscriber under the terms of the contract until a final determination of the enrollee’s or subscriber’s request for review has been made by the director. This paragraph shall not apply if the health care service plan cancels or does not renew the enrollee’s or subscriber’s health care service plan contract for nonpayment of premiums pursuant to paragraph (1) of subdivision (a). (5) A reinstatement pursuant to this subdivision shall be retroactive to the time of cancellation, rescission, or failure to renew and the plan shall be liable for the expenses incurred by the subscriber or enrollee for covered health care services from the date of cancellation, rescission, or nonrenewal to and including the date of reinstatement. The health care service plan shall reimburse the enrollee or subscriber for any expenses incurred pursuant to this paragraph within 30 days of receipt of the completed claim. (c) This section shall not abrogate any preexisting contracts entered into prior to the effective date of this chapter between a subscriber or enrollee and a health care service plan or a specialized health care service plan, including, but not limited to, the financial liability of the plan, except that each plan shall, if directed to do so by the director, exercise its authority, if any, under those preexisting contracts to conform them to existing law. (d) As used in this section, “health benefit plan” means any individual or group insurance policy or health care service plan contract that provides medical, hospital, and surgical benefits. The term does not include accident only, credit, or disability income coverage, coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, long-term care insurance, dental or vision coverage, coverage issued as a supplement to liability insurance, insurance arising out of workers’ compensation law or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (e) On or before July 1, 2011, the director may issue guidance to health care service plans regarding compliance with this section and that guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Any guidance issued pursuant to this subdivision shall only be effective through December 31, 2013, or until the director adopts and effects regulations pursuant to the Administrative Procedure Act, whichever occurs first. (Amended by Stats. 2019, Ch. 38, Sec. 15. (SB 78) Effective June 27, 2019.)
  154. 1365.5.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans may not refuse, cancel, renew, reinstate, or change contracts because of protected characteristics, with a narrow age-based pricing exception.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1365.5. (a) No health care service plan or specialized health care service plan shall refuse to enter into any contract or shall cancel or decline to renew or reinstate any contract because of the race, color, national origin, ancestry, religion, sex, marital status, sexual orientation, or age of any contracting party, prospective contracting party, or person reasonably expected to benefit from that contract as a subscriber, enrollee, member, or otherwise. (b) The terms of any contract shall not be modified, and the benefits or coverage of any contract shall not be subject to any limitations, exceptions, exclusions, reductions, copayments, coinsurance, deductibles, reservations, or premium, price, or charge differentials, or other modifications because of the race, color, national origin, ancestry, religion, sex, marital status, sexual orientation, or age of any contracting party, potential contracting party, or person reasonably expected to benefit from that contract as a subscriber, enrollee, member, or otherwise; except that premium, price, or charge differentials because of the age of any individual when based on objective, valid, and up-to-date statistical and actuarial data are not prohibited. (c) It shall be deemed a violation of subdivision (a) for any health care service plan to utilize marital status, living arrangements, occupation, sex, beneficiary designation, ZIP Codes or other territorial classification, or any combination thereof for the purpose of establishing sexual orientation. Nothing in this section shall be construed to alter in any manner the existing law prohibiting health care service plans from conducting tests for the presence of human immunodeficiency virus or evidence thereof. (d) This section shall not be construed to limit the authority of the director to adopt or enforce regulations prohibiting discrimination because of sex, marital status, or sexual orientation. (e) “Sex” as used in this section shall have the same meaning as “gender,” as defined in Section 422.56 of the Penal Code. (f) The changes made to this section by the act adding this subdivision shall only apply to contracts issued, amended, or renewed on or after January 1, 2011. (Amended by Stats. 2009, Ch. 365, Sec. 1. (AB 119) Effective January 1, 2010.)
  155. 1366.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans, and solicitor firms, are restricted from using deceptive or insurance-like names.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1366. (a) No plan may use in its name, any of the words “insurance,” “casualty,” “surety,” “mutual,” or any other words descriptive of the insurance, casualty, or surety business or use any name similar to the name or description of any insurance or surety corporation doing business in this state unless such plan controls or is controlled by an entity licensed as an insurer pursuant to the provisions of the Insurance Code and the plan employs a name related to that of such controlled or controlling entity. (b) Section 2415 of the Business and Professions Code, pertaining to fictitious names, shall not apply to plans, except specialized health care service plans. (c) No plan or solicitor firm may adopt a name style that is deceptive, or one that could cause the public to believe the plan is affiliated with, or recommended by any governmental or private entity unless such affiliation or endorsement exists. (Amended by Stats. 1980, Ch. 1313.)
  156. 1366.2.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    A full health care service plan must give a group subscriber, on request, the termination date of major provider contracts that cover the subscriber’s area and have a specified termination date.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1366.2. (a) A full health care service plan shall make available to a group subscriber, upon request, the termination date of all major health care provider contracts that are for services in the geographic area for which the group subscriber has secured coverage and that include a specified termination date. (b) For purposes of this section, the following terms have the following meanings: (1) “Enrollee” means a person who is enrolled in a health care service plan and who is a recipient of services from the plan. (2) “Full health care service plan” means a plan that meets the definition set forth in subdivision (f) of Section 1345, and that has a total enrolled membership exceeding 499,999 enrollees. (3) “Hospital” means a general acute care hospital. (4) “Major health care provider contract” means a contract between a full service plan and provider group or hospital covering more than 25,000 of that plan’s enrollees. “Major health care provider contract” does not mean a provider contract between a specialized health care service plan and a provider group or hospital. (5) “Provider group” means a medical group, independent practice association, or other similar group of providers with a total enrolled membership exceeding 99,999 enrollees. (Added by Stats. 2004, Ch. 411, Sec. 1. Effective September 9, 2004.)
  157. 1366.20.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    This section names the Cal-COBRA article and lets the director, with the Insurance Commissioner, adopt emergency regulations to implement it if federal assistance becomes available to qualified beneficiaries.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.20. (a) This article shall be known as the California Continuation Benefits Replacement Act, or “Cal-COBRA.” (b) It is the intent of the Legislature that continued access to health insurance coverage is provided to employees, and their dependents, of employers with 2 to 19 eligible employees who are not currently offered continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985. (c) It is the intent of the Legislature that any federal assistance that is or may become available to qualified beneficiaries under this article be effectively and promptly implemented by the department. (d) The director, in consultation with the Insurance Commissioner, may adopt emergency regulations to implement this article in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code by making a finding of emergency and demonstrating the need for immediate action in the event that any federal assistance is or becomes available to qualified beneficiaries under this article. The adoption of these regulations shall be considered by the Office of Administrative Law to be necessary to avoid serious harm to the public peace, health, safety, or general welfare. Any regulations adopted pursuant to this subdivision shall be substantially similar to those adopted by the Insurance Commissioner under subdivision (d) of Section 10128.50 of the Insurance Code. (Amended by Stats. 2009, Ch. 3, Sec. 1. Effective May 12, 2009.)
  158. 1366.21.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    This section defines the terms used in the California Cobra Program article.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.21. The definitions contained in this section govern the construction of this article. (a) “Continuation coverage” means extended coverage under the group benefit plan in which an eligible employee or eligible dependent is currently enrolled, or, in the case of a termination of the group benefit plan or an employer open enrollment period, extended coverage under the group benefit plan currently offered by the employer. (b) “Group benefit plan” means any health care service plan contract provided pursuant to Article 3.1 (commencing with Section 1357) to an employer with 2 to 19 eligible employees, as defined in Section 1357, as well as a specialized health care service plan contract provided to an employer with 2 to 19 eligible employees, as defined in Section 1357. (c) (1) “Qualified beneficiary” means any individual who, on the day before the qualifying event, is an enrollee in a group benefit plan offered by a health care service plan pursuant to Article 3.1 (commencing with Section 1357) and has a qualifying event, as defined in subdivision (d). (2) “Qualified beneficiary eligible for premium assistance under ARRA” means a qualified beneficiary, as defined in paragraph (1), who (A) was or is eligible for continuation coverage as a result of the involuntary termination of the covered employee’s employment during the period specified in subparagraph (A) of paragraph (3) of subdivision (a) of Section 3001 of ARRA, (B) elects continuation coverage, and (C) meets the definition of “qualified beneficiary” set forth in paragraph (3) of Section 1167 of Title 29 of the United States Code, as used in subparagraph (E) of paragraph (10) of subdivision (a) of Section 3001 of ARRA or any subsequent rules or regulations issued pursuant to that law. (3) “ARRA” means Title III of Division B of the federal American Recovery and Reinvestment Act of 2009 or any amendment to that federal law extending federal premium assistance to qualified beneficiaries. (d) “Qualifying event” means any of the following events that, but for the election of continuation coverage under this article, would result in a loss of coverage under the group benefit plan to a qualified beneficiary: (1) The death of the covered employee. (2) The termination of employment or reduction in hours of the covered employee’s employment, except that termination for gross misconduct does not constitute a qualifying event. (3) The divorce or legal separation of the covered employee from the covered employee’s spouse. (4) The loss of dependent status by a dependent enrolled in the group benefit plan. (5) With respect to a covered dependent only, the covered employee’s entitlement to benefits under Title XVIII of the United States Social Security Act (Medicare). (e) “Employer” means any employer that meets the definition of “small employer” as set forth in Section 1357 and (1) employed 2 to 19 eligible employees on at least 50 percent of its working days during the preceding calendar year, or, if the employer was not in business during any part of the preceding calendar year, employed 2 to 19 eligible employees on at least 50 percent of its working days during the preceding calendar quarter, (2) has contracted for health care coverage through a group benefit plan offered by a health care service plan, and (3) is not subject to Section 4980B of the United States Internal Revenue Code or Chapter 18 of the Employee Retirement Income Security Act, 29 U.S.C. Section 1161 et seq. (f) “Core coverage” means coverage of basic health care services, as defined in subdivision (b) of Section 1345, and other hospital, medical, or surgical benefits provided by the group benefit plan that a qualified beneficiary was receiving immediately prior to the qualifying event, other than noncore coverage. (g) “Noncore coverage” means coverage for vision and dental care. (Amended by Stats. 2010, Ch. 24, Sec. 1. (SB 838) Effective June 3, 2010.)
  159. 1366.22.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    This section says the article’s continuation coverage rules do not apply to several categories of individuals, including people with Medicare, other qualifying coverage, federal COBRA or Public Health Service Act coverage, or qualified beneficiaries who miss notice, premium, or plan-contract requirements.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.22. The continuation coverage requirements of this article do not apply to the following individuals: (a) Individuals who are entitled to Medicare benefits or become entitled to Medicare benefits pursuant to Title XVIII of the United States Social Security Act, as amended or superseded. Entitlement to Medicare Part A only constitutes entitlement to benefits under Medicare. (b) Individuals who have other hospital, medical, or surgical coverage or who are covered or become covered under another group benefit plan, including a self-insured employee welfare benefit plan, that provides coverage for individuals and that does not impose any exclusion or limitation with respect to any preexisting condition of the individual, other than a preexisting condition limitation or exclusion that does not apply to or is satisfied by the qualified beneficiary pursuant to Sections 1357 and 1357.06. A group conversion option under any group benefit plan shall not be considered as an arrangement under which an individual is or becomes covered. (c) Individuals who are covered, become covered, or are eligible for federal COBRA coverage pursuant to Section 4980B of the United States Internal Revenue Code or Chapter 18 of the Employee Retirement Income Security Act, 29 U.S.C. Section 1161 et seq. (d) Individuals who are covered, become covered, or are eligible for coverage pursuant to Chapter 6A of the Public Health Service Act, 42 U.S.C. Section 300bb-1 et seq. (e) Qualified beneficiaries who fail to meet the requirements of subdivision (b) of Section 1366.24 or subdivision (h) of Section 1366.25 regarding notification of a qualifying event or election of continuation coverage within the specified time limits. (f) Except as provided in Section 3001 of ARRA, qualified beneficiaries who fail to submit the correct premium amount required by subdivision (b) of Section 1366.24 and Section 1366.26, in accordance with the terms and conditions of the plan contract, or fail to satisfy other terms and conditions of the plan contract. (Amended by Stats. 2010, Ch. 24, Sec. 2. (SB 838) Effective June 3, 2010.)
  160. 1366.23.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    Health care service plans must offer continuation coverage in specified situations and let eligible beneficiaries keep coverage on the statute’s terms.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.23. (a) Every health care service plan, including a specialized health care service plan contract, that provides coverage under a group benefit plan to an employer, as defined in Section 1366.21, shall offer continuation coverage, pursuant to this section, to a qualified beneficiary under the contract upon a qualifying event without evidence of insurability. The qualified beneficiary shall, upon election, be able to continue his or her coverage under the group benefit plan, subject to the contract’s terms and conditions, and subject to the requirements of this article. Except as otherwise provided in this article, continuation coverage shall be provided under the same terms and conditions that apply to similarly situated individuals under the group benefit plan. (b) Every health care service plan shall also offer the continuation coverage to a qualified beneficiary who (1) elects continuation coverage under a group benefit plan, as defined in this article or in Section 10128.51 of the Insurance Code, but whose continuation coverage is terminated pursuant to subdivision (b) of Section 1366.27, prior to any other termination date specified in Section 1366.27, or (2) who elects coverage through the health care service plan during any employer open enrollment, and the employer has contracted with the health care service plan to provide coverage to the employer’s active employees. This continuation coverage shall be provided only for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan had the employer not terminated the group contract with the previous health care service plan or insurer. (c) Every health care service plan or specialized health care service plan shall offer a qualified beneficiary the ability to elect the same core, noncore, or core and noncore coverage that the qualified beneficiary had immediately prior to the qualifying event. (d) Any child who is born to a former employee who is a qualified beneficiary who has elected continuation coverage pursuant to this article or a child who is placed for adoption with a former employee who is a qualified beneficiary who has elected continuation coverage pursuant to this article during the period of continuation coverage provided by this article shall be considered a qualified beneficiary entitled to receive benefits pursuant to this article for the remainder of the period that the former employee is covered pursuant to this article, if the child is enrolled under a group benefit plan as a dependent of that former employee who is a qualified beneficiary within 30 days of the child’s birth or placement for adoption. (e) An individual who becomes a qualified beneficiary pursuant to this article shall continue to receive coverage pursuant to this article until continuation coverage is terminated at the qualified beneficiary’s election or pursuant to Section 1366.27, whichever comes first, even if the employer that sponsored the group benefit plan that is continued subsequently becomes subject to Section 4980B of the United States Internal Revenue Code or Chapter 18 of the Employee Retirement Income Security Act, 29 U.S.C. Sec. 1161 et seq. (f) A qualified beneficiary electing coverage pursuant to this section shall be considered part of the group contract and treated as similarly situated employees for contract purposes, unless otherwise specified in this article. (Amended by Stats. 1998, Ch. 107, Sec. 8. Effective July 6, 1998.)
  161. 1366.24.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    Health care service plans must give continuation-coverage notices and explain key deadlines for qualified beneficiaries.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.24. (a) Every health care service plan evidence of coverage, provided for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section. (b) This disclosure shall state that all enrollees who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 1366.21, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the health care service plan, or the employer if the employer contracts to perform the administrative services as provided for in Section 1366.25, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 1366.21 within 60 days of the date of the qualifying event. This disclosure shall inform enrollees that failure to make the notification to the health care service plan, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must request the continuation in writing and deliver the written request, by first-class mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 1366.25, within the 60-day period following the later of (1) the date that the enrollee’s coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the enrollee was sent notice pursuant to subdivision (e) of Section 1366.25 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the health care service plan, in accordance with the terms and conditions of the plan contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 1366.25, the amount of the required premium payment, as set forth in Section 1366.26. The disclosure shall further require that the qualified beneficiary’s first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the employer has contracted with the plan to perform the administrative services pursuant to subdivision (d) of Section 1366.25, within 45 days of the date the qualified beneficiary provided written notice to the health care service plan or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must equal an amount sufficient to pay any required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. (c) The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to subdivision (b) of Section 1366.27 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan. (d) Prior to August 1, 1998, every health care service plan shall provide to all covered employees of employers subject to this article a written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this section a new or amended evidence of coverage that includes the disclosures required by this section. Any specialized health care service plan that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchasers of benefits. (e) Every plan disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an enrollee may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the plan’s evidence of coverage. (f) Every disclosure issued, amended, or renewed on and after July 1, 2006, for a group benefit plan subject to this article shall include the following notice: “Please examine your options carefully before declining this coverage. You should be aware that companies selling individual health insurance typically require a review of your medical history that could result in a higher premium or you could be denied coverage entirely.” (Amended by Stats. 2005, Ch. 526, Sec. 2. Effective January 1, 2006.)
  162. 1366.25.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    This section requires employers and health care service plans to send several continuation-coverage notices on tight deadlines, and allows some ARRA-related election and premium-assistance notices and procedures.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.25. (a) Every group contract between a health care service plan and an employer subject to this article that is issued, amended, or renewed on or after July 1, 1998, shall require the employer to notify the plan, in writing, of any employee who has had a qualifying event, as defined in paragraph (2) of subdivision (d) of Section 1366.21, within 30 days of the qualifying event. The group contract shall also require the employer to notify the plan, in writing, within 30 days of the date, when the employer becomes subject to Section 4980B of the United States Internal Revenue Code or Chapter 18 of the Employee Retirement Income Security Act, 29 U.S.C. Sec. 1161 et seq. (b) Every group contract between a plan and an employer subject to this article that is issued, amended, or renewed on or after July 1, 1998, shall require the employer to notify qualified beneficiaries currently receiving continuation coverage, whose continuation coverage will terminate under one group benefit plan prior to the end of the period the qualified beneficiary would have remained covered, as specified in Section 1366.27, of the qualified beneficiary’s ability to continue coverage under a new group benefit plan for the balance of the period the qualified beneficiary would have remained covered under the prior group benefit plan. This notice shall be provided either 30 days prior to the termination or when all enrolled employees are notified, whichever is later. Every health care service plan and specialized health care service plan shall provide to the employer replacing a health care service plan contract issued by the plan, or to the employer’s agent or broker representative, within 15 days of any written request, information in possession of the plan reasonably required to administer the notification requirements of this subdivision and subdivision (c). (c) Notwithstanding subdivision (a), the group contract between the health care service plan and the employer shall require the employer to notify the successor plan in writing of the qualified beneficiaries currently receiving continuation coverage so that the successor plan, or contracting employer or administrator, may provide those qualified beneficiaries with the necessary premium information, enrollment forms, and instructions consistent with the disclosure required by subdivision (c) of Section 1366.24 and subdivision (e) of this section to allow the qualified beneficiary to continue coverage. This information shall be sent to all qualified beneficiaries who are enrolled in the plan and those qualified beneficiaries who have been notified, pursuant to Section 1366.24, of their ability to continue their coverage and may still elect coverage within the specified 60-day period. This information shall be sent to the qualified beneficiary’s last known address, as provided to the employer by the health care service plan or disability insurer currently providing continuation coverage to the qualified beneficiary. The successor plan shall not be obligated to provide this information to qualified beneficiaries if the employer or prior plan or insurer fails to comply with this section. (d) A health care service plan may contract with an employer, or an administrator, to perform the administrative obligations of the plan as required by this article, including required notifications and collecting and forwarding premiums to the health care service plan. Except for the requirements of subdivisions (a), (b), and (c), this subdivision shall not be construed to permit a plan to require an employer to perform the administrative obligations of the plan as required by this article as a condition of the issuance or renewal of coverage. (e) Every health care service plan, or employer or administrator that contracts to perform the notice and administrative services pursuant to this section, shall, within 14 days of receiving a notice of a qualifying event, provide to the qualified beneficiary the necessary benefits information, premium information, enrollment forms, and disclosures consistent with the notice requirements contained in subdivisions (b) and (c) of Section 1366.24 to allow the qualified beneficiary to formally elect continuation coverage. This information shall be sent to the qualified beneficiary’s last known address. (f) Every health care service plan, or employer or administrator that contracts to perform the notice and administrative services pursuant to this section, shall, during the 180-day period ending on the date that continuation coverage is terminated pursuant to paragraphs (1), (3), and (5) of subdivision (a) of Section 1366.27, notify a qualified beneficiary who has elected continuation coverage pursuant to this article of the date that his or her coverage will terminate, and shall notify the qualified beneficiary of any conversion coverage available to that qualified beneficiary. This requirement shall not apply when the continuation coverage is terminated because the group contract between the plan and the employer is being terminated. (g) (1) A health care service plan shall provide to a qualified beneficiary who has a qualifying event during the period specified in subparagraph (A) of paragraph (3) of subdivision (a) of Section 3001 of ARRA, a written notice containing information on the availability of premium assistance under ARRA. This notice shall be sent to the qualified beneficiary’s last known address. The notice shall include clear and easily understandable language to inform the qualified beneficiary that changes in federal law provide a new opportunity to elect continuation coverage with a 65-percent premium subsidy and shall include all of the following: (A) The amount of the premium the person will pay. For qualified beneficiaries who had a qualifying event between September 1, 2008, and May 12, 2009, inclusive, if a health care service plan is unable to provide the correct premium amount in the notice, the notice may contain the last known premium amount and an opportunity for the qualified beneficiary to request, through a toll-free telephone number, the correct premium that would apply to the beneficiary. (B) Enrollment forms and any other information required to be included pursuant to subdivision (e) to allow the qualified beneficiary to elect continuation coverage. This information shall not be included in notices sent to qualified beneficiaries currently enrolled in continuation coverage. (C) A description of the option to enroll in different coverage as provided in subparagraph (B) of paragraph (1) of subdivision (a) of Section 3001 of ARRA. This description shall advise the qualified beneficiary to contact the covered employee’s former employer for prior approval to choose this option. (D) The eligibility requirements for premium assistance in the amount of 65 percent of the premium under Section 3001 of ARRA. (E) The duration of premium assistance available under ARRA. (F) A statement that a qualified beneficiary eligible for premium assistance under ARRA may elect continuation coverage no later than 60 days of the date of the notice. (G) A statement that a qualified beneficiary eligible for premium assistance under ARRA who rejected or discontinued continuation coverage prior to receiving the notice required by this subdivision has the right to withdraw that rejection and elect continuation coverage with the premium assistance. (H) A statement that reads as follows: “IF YOU ARE HAVING ANY DIFFICULTIES READING OR UNDERSTANDING THIS NOTICE, PLEASE CONTACT [name of health plan] at [insert appropriate telephone number].” (2) With respect to qualified beneficiaries who had a qualifying event between September 1, 2008, and May 12, 2009, inclusive, the notice described in this subdivision shall be provided by the later of May 26, 2009, or seven business days after the date the plan receives notice of the qualifying event. (3) With respect to qualified beneficiaries who had or have a qualifying event between May 13, 2009, and the later date specified in subparagraph (A) of paragraph (3) of subdivision (a) of Section 3001 of ARRA, inclusive, the notice described in this subdivision shall be provided within the period of time specified in subdivision (e). (4) Nothing in this section shall be construed to require a health care service plan to provide the plan’s evidence of coverage as a part of the notice required by this subdivision, and nothing in this section shall be construed to require a health care service plan to amend its existing evidence of coverage to comply with the changes made to this section by the enactment of Assembly Bill 23 of the 2009–10 Regular Session or by the act amending this section during the second year of the 2009–10 Regular Session. (5) The requirement under this subdivision to provide a written notice to a qualified beneficiary and the requirement under paragraph (1) of subdivision (h) to provide a new opportunity to a qualified beneficiary to elect continuation coverage shall be deemed satisfied if a health care service plan previously provided a written notice and additional election opportunity under Section 3001 of ARRA to that qualified beneficiary prior to the effective date of the act adding this paragraph. (h) (1) Notwithstanding any other provision of law, a qualified beneficiary eligible for premium assistance under ARRA may elect continuation coverage no later than 60 days after the date of the notice required by subdivision (g). (2) For a qualified beneficiary who elects to continue coverage pursuant to this subdivision, the period beginning on the date of the qualifying event and ending on the effective date of the continuation coverage shall be disregarded for purposes of calculating a break in coverage in determining whether a preexisting condition provision applies under subdivision (c) of Section 1357.06 or subdivision (e) of Section 1357.51. (3) For a qualified beneficiary who had a qualifying event between September 1, 2008, and February 16, 2009, inclusive, and who elects continuation coverage pursuant to paragraph (1), the continuation coverage shall commence on the first day of the month following the election. (4) For a qualified beneficiary who had a qualifying event between February 17, 2009, and May 12, 2009, inclusive, and who elects continuation coverage pursuant to paragraph (1), the effective date of the continuation coverage shall be either of the following, at the option of the beneficiary, provided that the beneficiary pays the applicable premiums: (A) The date of the qualifying event. (B) The first day of the month following the election. (5) Notwithstanding any other provision of law, a qualified beneficiary who is eligible for the special election opportunity described in paragraph (17) of subdivision (a) of Section 3001 of ARRA may elect continuation coverage no later than 60 days after the date of the notice required under subdivision (j). For a qualified beneficiary who elects coverage pursuant to this paragraph, the continuation coverage shall be effective as of the first day of the first period of coverage after the date of termination of employment, except, if federal law permits, coverage shall take effect on the first day of the month following the election. However, for purposes of calculating the duration of continuation coverage pursuant to Section 1366.27, the period of that coverage shall be determined as though the qualifying event was a reduction of hours of the employee. (6) Notwithstanding any other provision of law, a qualified beneficiary who is eligible for any other special election opportunity under ARRA may elect continuation coverage no later than 60 days after the date of the special election notice required under ARRA. (i) A health care service plan shall provide a qualified beneficiary eligible for premium assistance under ARRA written notice of the extension of that premium assistance as required under Section 3001 of ARRA. (j) A health care service plan, or an administrator or employer if administrative obligations have been assumed by those entities pursuant to subdivision (d), shall give the qualified beneficiaries described in subparagraph (C) of paragraph (17) of subdivision (a) of Section 3001 of ARRA the written notice required by that paragraph by implementing the following procedures: (1) The health care service plan shall, within 14 days of the effective date of the act adding this subdivision, send a notice to employers currently contracting with the health care service plan for a group benefit plan subject to this article. The notice shall do all of the following: (A) Advise the employer that employees whose employment is terminated on or after March 2, 2010, who were previously enrolled in any group health care service plan or health insurance policy offered by the employer may be entitled to special health coverage rights, including a subsidy paid by the federal government for a portion of the premium. (B) Ask the employer to provide the health care service plan with the name, address, and date of termination of employment for any employee whose employment is terminated on or after March 2, 2010, and who was at any time covered by any health care service plan or health insurance policy offered to their employees on or after September 1, 2008. (C) Provide employers with a format and instructions for submitting the information to the health care service plan, or their administrator or employer who has assumed administrative obligations pursuant to subdivision (d), by telephone, fax, electronic mail, or mail. (2) Within 14 days of receipt of the information specified in paragraph (1) from the employer, the health care service plan shall send the written notice specified in paragraph (17) of subdivision (a) of Section 3001 of ARRA to those individuals. (3) If an individual contacts his or her health care service plan and indicates that he or she experienced a qualifying event that entitles him or her to the special election period described in paragraph (17) of subdivision (a) of Section 3001 of ARRA or any other special election provision of ARRA, the plan shall provide the individual with the written notice required under paragraph (17) of subdivision (a) of Section 3001 of ARRA or any other applicable provision of ARRA, regardless of whether the plan receives information from the individual’s previous employer regarding that individual pursuant to Section 24100. The plan shall review the individual’s application for coverage under this special election notice to determine if the individual qualifies for the special election period and the premium assistance under ARRA. The plan shall comply with paragraph (5) if the individual does not qualify for either the special election period or premium assistance under ARRA. (4) The requirement under this subdivision to provide the written notice described in paragraph (17) of subdivision (a) of Section 3001 of ARRA to a qualified beneficiary and the requirement under paragraph (5) of subdivision (h) to provide a new opportunity to a qualified beneficiary to elect continuation coverage shall be deemed satisfied if a health care service plan previously provided the written notice and additional election opportunity described in paragraph (17) of subdivision (a) of Section 3001 of ARRA to that qualified beneficiary prior to the effective date of the act adding this paragraph. (5) If an individual does not qualify for either a special election period or the premium assistance under ARRA, the health care service plan shall provide a written notice to that individual that shall include information on the right to appeal as set forth in Section 3001 of ARRA. (6) A health care service plan shall provide information on its publicly accessible Internet Web site regarding the premium assistance made available under ARRA and any special election period provided under that law. A plan may fulfill this requirement by linking or otherwise directing consumers to the information regarding COBRA continuation coverage premium assistance located on the Internet Web site of the United States Department of Labor. The information required by this paragraph shall be located in a section of the plan’s Internet Web site that is readily accessible to consumers, such as the Web site’s Frequently Asked Questions section. (k) For purposes of implementing federal premium assistance for continuation coverage, the department may designate a model notice or notices that may be used by health care service plans. Use of the model notice or notices shall not require prior approval of the department. Any model notice or notices designated by the department for purposes of this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (l) Notwithstanding any other provision of law, a qualified beneficiary eligible for premium assistance under ARRA may elect to enroll in different coverage subject to the criteria provided under subparagraph (B) of paragraph (1) of subdivision (a) of Section 3001 of ARRA. (m) A qualified beneficiary enrolled in continuation coverage as of February 17, 2009, who is eligible for premium assistance under ARRA may request application of the premium assistance as of March 1, 2009, or later, consistent with ARRA. (n) A health care service plan that receives an election notice from a qualified beneficiary eligible for premium assistance under ARRA, pursuant to subdivision (h), shall be considered a person entitled to reimbursement, as defined in Section 6432(b)(3) of the Internal Revenue Code, as amended by paragraph (12) of subdivision (a) of Section 3001 of ARRA. (o) (1) For purposes of compliance with ARRA, in the absence of guidance from, or if specifically required for state-only continuation coverage by, the United States Department of Labor, the Internal Revenue Service, or the Centers for Medicare and Medicaid Services, a health care service plan may request verification of the involuntary termination of a covered employee’s employment from the covered employee’s former employer or the qualified beneficiary seeking premium assistance under ARRA. (2) A health care service plan that requests verification pursuant to paragraph (1) directly from a covered employee’s former employer shall do so by providing a written notice to the employer. This written notice shall be sent by mail or facsimile to the covered employee’s former employer within seven business days from the date the plan receives the qualified beneficiary’s election notice pursuant to subdivision (h). Within 10 calendar days of receipt of written notice required by this paragraph, the former employer shall furnish to the health care service plan written verification as to whether the covered employee’s employment was involuntarily terminated. (3) A qualified beneficiary requesting premium assistance under ARRA may furnish to the health care service plan a written document or other information from the covered employee’s former employer indicating that the covered employee’s employment was involuntarily terminated. This document or information shall be deemed sufficient by the health care service plan to establish that the covered employee’s employment was involuntarily terminated for purposes of ARRA, unless the plan makes a reasonable and timely determination that the documents or information provided by the qualified beneficiary are legally insufficient to establish involuntary termination of employment. (4) If a health care service plan requests verification pursuant to this subdivision and cannot verify involuntary termination of employment within 14 business days from the date the employer receives the verification request or from the date the plan receives documentation or other information from the qualified beneficiary pursuant to paragraph (3), the health care service plan shall either provide continuation coverage with the federal premium assistance to the qualified beneficiary or send the qualified beneficiary a denial letter which shall include notice of his or her right to appeal that determination pursuant to ARRA. (5) No person shall intentionally delay verification of involuntary termination of employment under this subdivision. (p) The provision of information and forms related to the premium assistance available pursuant to ARRA to individuals by a health care service plan shall not be considered a violation of this chapter provided that the plan complies with all of the requirements of this article. (Amended by Stats. 2010, Ch. 24, Sec. 3. (SB 838) Effective June 3, 2010.)
  163. 1366.26.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    A qualified beneficiary who elects continuation coverage must pay the plan on time, monthly at most, and generally no more than 110% of the applicable rate; a disabled beneficiary may be charged up to 150% after 18 months. The plan may not charge the employer an extra Cal-COBRA administration fee.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.26. A qualified beneficiary electing continuation coverage shall pay to the health care service plan, on or before the due date of each payment but not more frequently than on a monthly basis, not more than 110 percent of the applicable rate charged for a covered employee or, in the case of dependent coverage, not more than 110 percent of the applicable rate charged to a similarly situated individual under the group benefit plan being continued under the group contract. In the case of a qualified beneficiary who is determined to be disabled pursuant to Title II or Title XVI of the United States Social Security Act, the qualified beneficiary shall be required to pay to the health care service plan an amount no greater than 150 percent of the group rate after the first 18 months of continuation coverage provided pursuant to this section. In no case shall a health care service plan charge an employer an additional fee for administering Cal-COBRA other than those incorporated in the risk adjusted employee risk rate as provided for in subdivision (i) of Section 1357. (Amended by Stats. 1998, Ch. 107, Sec. 10. Effective July 6, 1998.)
  164. 1366.27.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    Continuation coverage ends when the first listed termination event happens, including 36 months after a qualifying event in some cases, nonpayment of premiums, loss of article requirements, moving out of the service area, fraud or deception, or the employer stopping group benefits.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.27. (a) The continuation coverage provided pursuant to this article shall terminate at the first to occur of the following: (1) In the case of a qualified beneficiary who is eligible for continuation coverage pursuant to paragraph (2) of subdivision (d) of Section 1366.21, the date 36 months after the date the qualified beneficiary’s benefits under the contract would otherwise have terminated because of a qualifying event. (2) Except as provided in Section 3001 of ARRA, the end of the period for which premium payments were made, if the qualified beneficiary ceases to make payments or fails to make timely payments of a required premium, in accordance with the terms and conditions of the plan contract. In the case of nonpayment of premiums, reinstatement shall be governed by the terms and conditions of the plan contract and by Section 3001 of ARRA, if applicable. (3) In the case of a qualified beneficiary who is eligible for continuation coverage pursuant to paragraph (1), (3), (4), or (5) of subdivision (d) of Section 1366.21, the date 36 months after the date the qualified beneficiary’s benefits under the contract would otherwise have terminated by reason of a qualifying event. (4) The requirements of this article no longer apply to the qualified beneficiary pursuant to the provisions of Section 1366.22. (5) In the case of a qualified beneficiary who is eligible for continuation coverage pursuant to paragraph (2) of subdivision (d) of Section 1366.21, and determined, under Title II or Title XVI of the Social Security Act, to be disabled at any time during the first 60 days of continuation coverage, and the spouse or dependent who has elected coverage pursuant to this article, the date 36 months after the date the qualified beneficiary’s benefits under the contract would otherwise have terminated because of a qualifying event. The qualified beneficiary shall notify the plan, or the employer or administrator that contracts to perform administrative services, of the social security determination within 60 days of the date of the determination letter and prior to the end of the original 36-month continuation coverage period in order to be eligible for coverage pursuant to this subdivision. If the qualified beneficiary is no longer disabled under Title II or Title XVI of the Social Security Act, the benefits provided in this paragraph shall terminate on the later of the date provided by paragraph (1), or the month that begins more than 31 days after the date of the final determination under Title II or Title XVI of the United States Social Security Act that the qualified beneficiary is no longer disabled. A qualified beneficiary eligible for 36 months of continuation coverage as a result of a disability shall notify the plan, or the employer or administrator that contracts to perform the notice and administrative services, within 30 days of a determination that the qualified beneficiary is no longer disabled. (6) In the case of a qualified beneficiary who is initially eligible for and elects continuation coverage pursuant to paragraph (2) of subdivision (d) of Section 1366.21, but who has another qualifying event, as described in paragraph (1), (3), (4), or (5) of subdivision (d) of Section 1366.21, within 36 months of the date of the first qualifying event, and the qualified beneficiary has notified the plan, or the employer or administrator under contract to provide administrative services, of the second qualifying event within 60 days of the date of the second qualifying event, the date 36 months after the date of the first qualifying event. (7) The employer, or any successor employer or purchaser of the employer, ceases to provide any group benefit plan to his or her employees. (8) The qualified beneficiary moves out of the plan’s service area or the qualified beneficiary commits fraud or deception in the use of plan services. (b) If the group contract between the plan and the employer is terminated prior to the date the qualified beneficiary’s continuation coverage would terminate pursuant to this section, coverage under the prior plan shall terminate and the qualified beneficiary may elect continuation coverage under the subsequent group benefit plan, if any, pursuant to the requirements of subdivision (b) of Section 1366.23 and subdivision (c) of Section 1366.24. (c) The amendments made to this section by Assembly Bill 1401 of the 2001–02 Regular Session shall apply to individuals who begin receiving continuation coverage under this article on or after January 1, 2003. (Amended by Stats. 2010, Ch. 24, Sec. 4. (SB 838) Effective June 3, 2010.)
  165. 1366.28.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    A health care service plan does not have to provide continuation coverage if the enrollee does not give the required notice or the employer does not comply with Section 1366.25.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.28. A health care service plan subject to this article shall not be obligated to provide continuation coverage to a qualified beneficiary pursuant to this article if an enrollee fails to make the notification required by Section 1366.24, or if the employer of the enrollee fails to comply with Section 1366.25. (Added by Stats. 1997, Ch. 665, Sec. 1. Effective January 1, 1998.)
  166. 1366.29.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. )

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    A health care service plan must offer certain COBRA-exhausted enrollees continued coverage for up to 36 months and include notice of that coverage in the COBRA termination notice.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.5. California Cobra Program [1366.20 - 1366.29] ( Article 4.5 added by Stats. 1997, Ch. 665, Sec. 1. ) ## 1366.29. (a) A health care service plan shall offer an enrollee who has exhausted continuation coverage under COBRA the opportunity to continue coverage for up to 36 months from the date the enrollee’s continuation coverage began, if the enrollee is entitled to less than 36 months of continuation coverage under COBRA. The health care service plan shall offer coverage pursuant to the terms of this article, including the rate limitations contained in Section 1366.26. (b) Notification of the coverage available under this section shall be included in the notice of the pending termination of COBRA coverage that is required to be provided to COBRA beneficiaries and that is required to be provided under Section 1366.24. (c) For purposes of this section, “COBRA” means Section 4980B of Title 26 of the United States Code, Sections 1161 et seq. of Title 29 of the United States Code, and Section 300bb of Title 42 of the United States Code. (d) This section shall not apply to specialized health care service plans providing noncore coverage, as defined in subdivision (g) of Section 1366.21. (e) This section shall become operative on September 1, 2003, and shall apply to individuals who begin receiving COBRA coverage on or after January 1, 2003. (Added by Stats. 2002, Ch. 794, Sec. 4. Effective January 1, 2003. Section operative September 1, 2003, by its own provisions.)
  167. 1366.3.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Health care service plans that stop offering individual coverage must keep covering affected subscribers under specified terms, with some exceptions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1366.3. (a) On and after January 1, 2005, a health care service plan issuing individual plan contracts that ceases to offer individual coverage in this state shall offer coverage to the subscribers who had been covered by those contracts at the time of withdrawal under the same terms and conditions as provided in paragraph (3) of subdivision (a), paragraphs (2) to (4), inclusive, of subdivision (b), subdivisions (c) to (e), inclusive, and subdivision (h) of Section 1373.6. (b) A health care service plan that ceases to offer individual coverage in a service area shall offer the coverage required by subdivision (a) to subscribers who had been covered by those contracts at the time of withdrawal, if the plan continues to offer group coverage in that service area. This subdivision shall not apply to coverage provided pursuant to a preferred provider organization. (c) The department may adopt regulations to implement this section. (d) This section shall not apply when a plan participating in Medi-Cal, Healthy Families, Access for Infants and Mothers, or any other contract between the plan and a government entity no longer contracts with the government entity to provide health coverage in the state, or a specified area of the state, nor shall this section apply when a plan ceases entirely to market, offer, and issue any and all forms of coverage in any part of this state after the effective date of this section. (e) (1) On and after January 1, 2014, and except as provided in paragraph (2), the reference to Section 1373.6 in subdivision (a) shall not apply to any health plan contracts. (2) If Section 5000A of the Internal Revenue Code, as added by Section 1501 of 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), is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Section 300gg-91), paragraph (1) shall become inoperative on the date of that repeal or amendment. (Amended by Stats. 2013, Ch. 441, Sec. 3. (AB 1180) Effective October 1, 2013.)
  168. 1366.35.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.6. Coverage for Federally Eligible Defined Individuals [1366.35 - 1366.50] ( Article 4.6 added by Stats. 2000, Ch. 810, Sec. 1. )

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    Health care service plans must not refuse enrollment, deny coverage, or add preexisting condition exclusions for federally eligible defined individuals, and they must follow the section’s disclosure, compensation, and federal-compliance rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.6. Coverage for Federally Eligible Defined Individuals [1366.35 - 1366.50] ( Article 4.6 added by Stats. 2000, Ch. 810, Sec. 1. ) ## 1366.35. (a) A health care service plan providing coverage for hospital, medical, or surgical benefits under an individual health care service plan contract may not, with respect to a federally eligible defined individual desiring to enroll in individual health insurance coverage, decline to offer coverage to, or deny enrollment of, the individual or impose any preexisting condition exclusion with respect to the coverage. (b) For purposes of this section, “federally eligible defined individual” means an individual who, as of the date on which the individual seeks coverage under this section, meets all of the following conditions: (1) Has had 18 or more months of creditable coverage, and whose most recent prior creditable coverage was under a group health plan, a federal governmental plan maintained for federal employees, or a governmental plan or church plan as defined in the federal Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1002). (2) Is not eligible for coverage under a group health plan, Medicare, or Medi-Cal, and does not have other health insurance coverage. (3) Was not terminated from his or her most recent creditable coverage due to nonpayment of premiums or fraud. (4) If offered continuation coverage under COBRA or Cal-COBRA, has elected and exhausted that coverage. (c) Every health care service plan shall comply with applicable federal statutes and regulations regarding the provision of coverage to federally eligible defined individuals, including any relevant application periods. (d) A health care service plan shall offer the following health benefit plan contracts under this section that are designed for, made generally available to, are actively marketed to, and enroll, individuals: (1) either the two most popular products as defined in Section 300gg-41(c)(2) of Title 42 of the United States Code and Section 148.120(c)(2) of Title 45 of the Code of Federal Regulations or (2) the two most representative products as defined in Section 300gg-41(c)(3) of the United States Code and Section 148.120(c)(3) of Title 45 of the Code of Federal Regulations, as determined by the plan in compliance with federal law. A health care service plan that offers only one health benefit plan contract to individuals, excluding health benefit plans offered to Medi-Cal or Medicare beneficiaries, shall be deemed to be in compliance with this article if it offers that health benefit plan contract to federally eligible defined individuals in a manner consistent with this article. (e) (1) In the case of a health care service plan that offers health insurance coverage in the individual market through a network plan, the plan may do both of the following: (A) Limit the individuals who may be enrolled under that coverage to those who live, reside, or work within the service area for the network plan. (B) Within the service area of the plan, deny coverage to individuals if the plan has demonstrated to the director that the plan will not have the capacity to deliver services adequately to additional individual enrollees because of its obligations to existing group contractholders and enrollees and individual enrollees, and that the plan is applying this paragraph uniformly to individuals without regard to any health status-related factor of the individuals and without regard to whether the individuals are federally eligible defined individuals. (2) A health care service plan, upon denying health insurance coverage in any service area in accordance with subparagraph (B) of paragraph (1), may not offer coverage in the individual market within that service area for a period of 180 days after the coverage is denied. (f) (1) A health care service plan may deny health insurance coverage in the individual market to a federally eligible defined individual if the plan has demonstrated to the director both of the following: (A) The plan does not have the financial reserves necessary to underwrite additional coverage. (B) The plan is applying this subdivision uniformly to all individuals in the individual market and without regard to any health status-related factor of the individuals and without regard to whether the individuals are federally eligible defined individuals. (2) A health care service plan, upon denying individual health insurance coverage in any service area in accordance with paragraph (1), may not offer that coverage in the individual market within that service area for a period of 180 days after the date the coverage is denied or until the issuer has demonstrated to the director that the plan has sufficient financial reserves to underwrite additional coverage, whichever is later. (g) The requirement pursuant to federal law to furnish a certificate of creditable coverage shall apply to health insurance coverage offered by a health care service plan in the individual market in the same manner as it applies to a health care service plan in connection with a group health benefit plan. (h) A health care service plan shall compensate a life agent or fire and casualty broker-agent whose activities result in the enrollment of federally eligible defined individuals in the same manner and consistent with the renewal commission amounts as the plan compensates life agents or fire and casualty broker-agents for other enrollees who are not federally eligible defined individuals and who are purchasing the same individual health benefit plan contract. (i) Every health care service plan shall disclose as part of its COBRA or Cal-COBRA disclosure and enrollment documents, an explanation of the availability of guaranteed access to coverage under the Health Insurance Portability and Accountability Act of 1996, including the necessity to enroll in and exhaust COBRA or Cal-COBRA benefits in order to become a federally eligible defined individual. (j) No health care service plan may request documentation as to whether or not a person is a federally eligible defined individual other than is permitted under applicable federal law or regulations. (k) This section shall not apply to coverage defined as excepted benefits pursuant to Section 300gg(c) of Title 42 of the United States Code. (l) This section shall apply to health care service plan contracts offered, delivered, amended, or renewed on or after January 1, 2001. (m) (1) This section shall be inoperative on January 1, 2014. (2) If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Section 300gg-91), this section shall become operative on the date of that repeal or amendment. (3) For purposes of this subdivision, “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care Education and Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued pursuant to that law. (Amended by Stats. 2013, Ch. 441, Sec. 4. (AB 1180) Effective October 1, 2013. Inoperative, by its own provisions, on January 1, 2014, subject to condition for resuming operation.)
  169. 1366.4.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. )

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    Certain health care contracting parties may work with licensed nonphysician providers, and plans may manage credentialing and directory listings, subject to stated limits.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4. Solicitation and Enrollment [1359 - 1366.6] ( Article 4 added by Stats. 1975, Ch. 941. ) ## 1366.4. (a) A medical group, physician, or independent practice association that contracts with a health care service plan may enter into contracts with licensed nonphysician providers to provide services, as defined in Section 1300.67(a)(1) of Title 28 of the California Code of Regulations, to plan enrollees covered by the contract between the plan and the group, physician, or association. (b) The licensed nonphysician provider described in subdivision (a) that contracts with a medical group, physician, or independent practice association may directly bill, if direct billing is otherwise permitted by law, a health care service plan for covered services pursuant to a contract with the health care service plan that specifies direct billing. Direct billing pursuant to this subdivision is permitted only to the extent that the same services are not billed for by the medical group, physician, or independent practice association. (c) A health care service plan may require the nonphysician provider to complete an appropriate credentialing process. (d) Every health care service plan may either list licensed nonphysician providers that contract with medical groups, physicians, and independent practice associations pursuant to subdivision (b) in any listing or directory of plan health care providers that is provided to enrollees or to the public, or may include a notification in the plan’s evidence of coverage or provider list that the health care service plan has contracts with nonphysician providers, pursuant to subdivision (b), and may list the types of contracted nonphysician providers. The notification may inform an enrollee that he or she may obtain a list of the nonphysician providers by contacting his or her primary or specialist medical group. The listing may indicate whether licensed nonphysician providers may be accessed directly by enrollees. (e) Nothing in this section shall be construed to authorize, or otherwise require the director to approve, a risk-sharing arrangement between a plan and a provider. (Amended by Stats. 2009, Ch. 298, Sec. 4. (AB 1540) Effective January 1, 2010.)
  170. 1366.50.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.6. Coverage for Federally Eligible Defined Individuals [1366.35 - 1366.50] ( Article 4.6 added by Stats. 2000, Ch. 810, Sec. 1. )

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    Health plans must give certain members a notice when coverage ends, and later must send the Exchange contact information unless the person opts out.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 4.6. Coverage for Federally Eligible Defined Individuals [1366.35 - 1366.50] ( Article 4.6 added by Stats. 2000, Ch. 810, Sec. 1. ) ## 1366.50. (a) (1) On and after January 1, 2014, a health care service plan providing individual or group health care coverage shall provide to enrollees or subscribers who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange (Exchange) established under Title 22 (commencing with Section 100500) of the Government Code or no-cost coverage through Medi-Cal. The notice shall include information on obtaining coverage pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2013, in consultation with the Department of Insurance and the Exchange. The notice shall also include information that individuals eligible for the Medicare Program should examine their options carefully, as delaying Medicare enrollment may result in substantial financial implications, as well as information on how to find enrollment advice or assistance. (2) The notice described in paragraph (1) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health care service plan. (b) (1) A health care service plan providing individual or group health care coverage shall annually notify an enrollee or subscriber that if the enrollee or subscriber ceases to be enrolled in coverage, the health care service plan will provide information, including the enrollee’s or subscriber’s name, address, and other contact information, such as email address, to the Exchange so that the enrollee or subscriber may obtain other coverage. An enrollee or subscriber may opt out of this transfer of information to the Exchange. This notice may be incorporated into or sent simultaneously with other notices sent by the health care service plan. (2) Beginning January 1, 2021, a health care service plan providing individual or group health care coverage that has notified its enrollees or subscribers consistent with paragraph (1) shall provide to the Exchange the name, address, and other contact information of an enrollee or subscriber who ceased to be enrolled in coverage and who did not opt out of the information transfer. The information shall be provided in a manner prescribed by the Exchange. (3) The Exchange may use any contact method to communicate with and inform an enrollee or subscriber who ceases to be enrolled in coverage of available coverage options. (c) This section does not apply to a specialized health care service plan contract or a Medicare supplemental plan contract. (Amended by Stats. 2019, Ch. 845, Sec. 2. (SB 260) Effective January 1, 2020.)
  171. 1367.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must meet listed standards for facilities, staff, equipment, service access, contracts, dispute resolution, and required benefits, with some director-controlled exceptions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 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. (Amended by Stats. 2013, Ch. 316, Sec. 2. (SB 639) Effective January 1, 2014.)
  172. 1367.001.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plan contracts may not set lifetime or annual dollar limits on covered benefits for an enrollee, subject to stated exceptions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.001. (a) An individual or group health care service plan contract shall not establish either of the following: (1) Lifetime limits on the dollar value of any covered benefits for an enrollee, whether provided in network or out of network. (2) Annual limits on the dollar value of any covered benefits for an enrollee, whether provided in network or out of network. (b) Subdivision (a) does not prevent a group health care service plan contract from placing annual or lifetime per-enrollee limits on specific covered benefits that are not essential health benefits, as defined under Section 1367.005, to the extent that those limits are otherwise permitted under state law. (c) This section does not apply to a health care service plan contract or insurance policy issued, sold, renewed, or offered for health care services or coverage provided in the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code), the Medi-Cal Access Program (Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code), or the California Major Risk Medical Insurance Program (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code). (d) This section does not apply to a specialized health care service plan that does not cover an essential health benefit, as defined under Section 1367.005, or a Medicare supplement policy. (Repealed and added by Stats. 2020, Ch. 302, Sec. 2. (SB 406) Effective September 29, 2020.)
  173. 1367.002.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Certain health care service plan contracts must cover specified preventive services and cannot charge cost sharing for them.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.002. (a) A group or individual nongrandfathered health care service plan contract shall, at a minimum, provide coverage for and shall not impose any cost-sharing requirements for any of the following: (1) Evidence-based items or services that had in effect on January 1, 2025, a rating of “A” or “B” in the recommendations of the United States Preventive Services Task Force or any modification or supplement to that recommendation adopted pursuant to Section 120164. (2) Immunizations that had in effect on January 1, 2025, a recommendation from the Advisory Committee on Immunization Practices of the federal Centers for Disease Control and Prevention or any modification or supplement to that recommendation adopted pursuant to Section 120164 with respect to the individual involved. (3) With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided in the comprehensive guidelines, as periodically updated, supported by the United States Health Resources and Services Administration, as of January 1, 2025, or any modification or supplement to that recommendation adopted pursuant to Section 120164. (4) With respect to women, those additional preventive care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by the United States Health Resources and Services Administration as of January 1, 2025, or any modification or supplement to that recommendation adopted pursuant to Section 120164. (5) For the purposes of this section: (A) The recommendations of the United States Preventive Services Task Force as of January 1, 2025, or any modification or supplement to that recommendation adopted pursuant to Section 120164, regarding breast cancer screening, mammography, and prevention shall be considered the most current other than those issued in or around November 2009. (B) A health care service plan contract issued, amended, or renewed on or after January 1, 2025, shall not impose any cost-sharing requirements for any items or services that are integral to the provision of an item or service that is required by this section, regardless of whether or not the integral item or service is billed separately from an item or service that is required by this section. (6) For the purposes of this section, a health care service plan contract shall not impose cost sharing for office visits associated with the preventive care services described in this section if the preventive care service is not billed separately, or is not tracked as an individual encounter separately, from the office visit and the primary purpose of the office visit is the delivery of the preventive care service. (b) This section does not prohibit a health care service plan contract from providing coverage for preventive items or services in addition to those required by subdivision (a). (c) A health care service plan shall provide coverage pursuant to subdivision (a) for plan years that begin on or after the date that is one year after the date the recommendation or guideline is issued. (1) A health care service plan that is required to provide coverage for any items and services specified in a recommendation or guideline described in subdivision (a) on the first day of a plan year shall provide coverage through the last day of the plan year, even if the recommendation or guideline changes or is no longer described in subdivision (a) during the plan year. (2) Notwithstanding paragraph (1) and consistent with the authority granted to the State Department of Public Health pursuant to Section 120164, if any item or service associated with any recommendation or guideline specified in subdivision (a) is subject to a safety recall or is otherwise determined to pose a significant safety concern by a federal agency authorized to regulate the item or service during a plan year, a health care service plan is not required to cover the item or service through the last day of the plan year. (d) A health care service plan contract issued, amended, or renewed on or after January 1, 2025, shall cover items and services pursuant to this section in accordance with any applicable requirement of this chapter, including, but not limited to, Section 1342.74 on prophylaxis of HIV infection, Section 1367.34 as added by Section 3 of Chapter 486 of the Statutes of 2021 on home test kits for sexually transmitted diseases, Section 1367.66 on cervical cancer screening, and Section 1367.668 on colorectal cancer screening. (e) This section does not apply to a specialized health care service plan that does not cover an essential health benefit, as defined in Section 1367.005. This section shall only apply to a health savings account-eligible health care service plan to the extent it does not fail to be treated as a high deductible health plan under Section 223 of Title 26 of the United States Code. (f) The department shall coordinate with the Department of Insurance if it adopts regulations to implement this section. (Amended by Stats. 2025, Ch. 105, Sec. 18. (AB 144) Effective September 17, 2025.)
  174. 1367.003.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans covered by this section must pay annual pro rata rebates to enrollees when their medical loss ratio falls below the applicable threshold, and they must meet the stated minimum medical loss ratios.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.003. (a) A health care service plan that issues, sells, renews, or offers health care service plan contracts for health care coverage in this state, including a grandfathered health plan, but not including specialized health care service plan contracts that provide only dental or vision services, shall provide an annual rebate to each enrollee under that coverage, on a pro rata basis, if the ratio of the amount of premium revenue expended by the health care service plan on the costs for reimbursement for clinical services provided to enrollees under that coverage and for activities that improve health care quality to the total amount of premium revenue, excluding federal and state taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance, is less than the following: (1) With respect to a health care service plan offering coverage in the large group market, 85 percent. (2) With respect to a health care service plan offering coverage in the small group market or in the individual market, 80 percent. (b) A health care service plan that issues, sells, renews, or offers health care service plan contracts for health care coverage in this state, including a grandfathered health plan, shall comply with the following minimum medical loss ratios: (1) With respect to a health care service plan offering coverage in the large group market, 85 percent. (2) With respect to a health care service plan offering coverage in the small group market or in the individual market, 80 percent. (c) (1) The total amount of an annual rebate required under this section shall be calculated in an amount equal to the product of the following: (A) The amount by which the percentage described in paragraph (1) or (2) of subdivision (a) exceeds the ratio described in paragraph (1) or (2) of subdivision (a). (B) The total amount of premium revenue, excluding federal and state taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance. (2) A health care service plan shall provide a rebate owing to an enrollee no later than September 30 of the calendar year following the year for which the ratio described in subdivision (a) was calculated. (d) The director may adopt 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) that are necessary to implement the medical loss ratio as described under Section 2718 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-18), and any federal rules or regulations issued under that section. (e) The requirements of this section shall be implemented as described in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-91) and the requirements of Section 2718 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-18) and any rules or regulations issued under those sections as in effect on January 1, 2017. (f) This section does not apply to provisions of this chapter pertaining to financial statements, assets, liabilities, and other accounting items to which subdivision (s) of Section 1345 applies. (g) This section does not apply to a health care service plan contract or insurance policy issued, sold, renewed, or offered for health care services or coverage provided in the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code). (Amended by Stats. 2018, Ch. 678, Sec. 1. (AB 2499) Effective January 1, 2019.)
  175. 1367.004.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans that issue, sell, renew, or offer dental service contracts must file an annual MLR report by July 31, and the department must post it within 45 days of receiving it.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.004. (a) A health care service plan that issues, sells, renews, or offers a contract covering dental services shall file a report with the department by July 31 of each year, which shall be known as the MLR annual report. The MLR annual report shall be organized by market and product type and shall contain the same information required in the 2013 federal Medical Loss Ratio (MLR) Annual Reporting Form (CMS-10418). The department shall post a health care service plan’s MLR annual report on its Internet Web site within 45 days after receiving the report. (b) The MLR reporting year shall be for the calendar year during which dental coverage is provided by the plan. As applicable, all terms used in the MLR annual report shall have the same meaning as used in the federal Public Health Service Act (42 U.S.C. Sec. 300gg-18), Part 158 (commencing with Section 158.101) of Title 45 of the Code of Federal Regulations, and Section 1367.003. (c) If the director decides to conduct a financial examination, as described in Section 1382, because the director finds it necessary to verify the health care service plan’s representations in the MLR annual report, the department shall provide the health care service plan with a notification 30 days before the commencement of the financial examination. (d) The health care service plan shall have 30 days from the date of notification to electronically submit to the department all requested records, books, and papers specified in subdivision (a) of Section 1381. The director may extend the time for a health care service plan to comply with this subdivision upon a finding of good cause. (e) The department shall make available to the public all of the data provided to the department pursuant to this section. (f) This section does not apply to a health care service plan contract issued, sold, renewed, or offered for health care services or coverage provided in the Medi-Cal program (Chapter 7 (commencing with Section 14000) and Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code), the Medi-Cal Access Program (Chapter 2 (commencing with Section 15810) of Part 3.3 of Division 9 of the Welfare and Institutions Code), or the California Major Risk Medical Insurance Program (Chapter 4 (commencing with Section 15870) of Part 3.3 of Division 9 of the Welfare and Institutions Code), to the extent consistent with the federal Patient Protection and Affordable Care Act (Public Law 111-148). (g) The department may issue guidance to specialized health care service plans subject to this section regarding compliance with this section. The guidance shall not be subject to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), and shall be effective only until the department adopts regulations pursuant to that act. The department shall consult with the Department of Insurance in issuing the guidance specified in this section. (Amended by Stats. 2018, Ch. 933, Sec. 3. (SB 1008) Effective January 1, 2019.)
  176. 1367.005.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plan contracts issued, amended, or renewed on or after January 1, 2017 must include essential health benefits and follow the section’s coverage rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.005. (a) An individual or small group health care service plan contract issued, amended, or renewed on or after January 1, 2017, shall include, at a minimum, coverage for essential health benefits pursuant to the federal Patient Protection and Affordable Care Act (PPACA) and as outlined in this section. For purposes of this section, “essential health benefits” means all of the following: (1) Health benefits within the categories identified in Section 1302(b) of PPACA: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care. (2) (A) The health benefits covered by the Kaiser Foundation Health Plan Small Group HMO 30 plan (federal health product identification number 40513CA035) as this plan was offered during the first quarter of 2014, as follows, regardless of whether the benefits are specifically referenced in the evidence of coverage or plan contract for that plan: (i) Medically necessary basic health care services, as defined in subdivision (b) of Section 1345 and Section 1300.67 of Title 28 of the California Code of Regulations. (ii) The health benefits mandated to be covered by the plan pursuant to statutes enacted before December 31, 2011, as described in the following sections: Sections 1367.002, 1367.06, and 1367.35 (preventive services for children); Section 1367.25 (prescription drug coverage for contraceptives); Section 1367.45 (AIDS vaccine); Section 1367.46 (HIV testing); Section 1367.51 (diabetes); Section 1367.54 (alpha-fetoprotein testing); Section 1367.6 (breast cancer screening); Section 1367.61 (prosthetics for laryngectomy); Section 1367.62 (maternity hospital stay); Section 1367.63 (reconstructive surgery); Section 1367.635 (mastectomies); Section 1367.64 (prostate cancer); Section 1367.65 (mammography); Section 1367.66 (cervical cancer); Section 1367.665 (cancer screening tests); Section 1367.67 (osteoporosis); Section 1367.68 (surgical procedures for jaw bones); Section 1367.71 (anesthesia for dental); Section 1367.9 (conditions attributable to diethylstilbestrol); Section 1368.2 (hospice care); Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency response ambulance or ambulance transport services); subdivision (b) of Section 1373 (sterilization operations or procedures); Section 1373.4 (inpatient hospital and ambulatory maternity); Section 1374.56 (phenylketonuria); Section 1374.17 (organ transplants for HIV); Section 1374.72 (mental health parity); and Section 1374.73 (autism/behavioral health treatment). (iii) Any other benefits mandated to be covered by the plan pursuant to statutes enacted before December 31, 2011, as described in those statutes. (iv) The health benefits covered by the plan that are not otherwise required to be covered under this chapter, to the extent required pursuant to Sections 1367.18, 1367.21, 1367.215, 1367.22, 1367.24, and 1367.25, and Section 1300.67.24 of Title 28 of the California Code of Regulations. (v) Any other health benefits covered by the plan that are not otherwise required to be covered under this chapter. (B) If there are any conflicts or omissions in the plan identified in subparagraph (A) as compared with the requirements for health benefits under this chapter that were enacted prior to December 31, 2011, the requirements of this chapter shall be controlling, except as otherwise specified in this section. (C) Notwithstanding subparagraph (B) or any other provision of this section, the home health services benefits covered under the plan identified in subparagraph (A) shall be deemed to not be in conflict with this chapter. (D) For purposes of this section, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Public Law 110-343) shall apply to a contract subject to this section. Coverage of mental health and substance use disorder services pursuant to this paragraph, along with any scope and duration limits imposed on the benefits, shall be in compliance with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Public Law 110-343), and all rules, regulations, or guidance issued pursuant to Section 2726 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-26). (E) Commencing January 1, 2027, if the United States Department of Health and Human Services approves a new essential health benefits benchmark plan for the State of California pursuant to submissions to the department made on behalf of the state in 2025 for this purpose, the benchmark plan described in subparagraph (A) shall additionally include all of the following benefits: (i) Services to evaluate, diagnose, and treat infertility that include all of the following: (I) Artificial insemination. (II) Three attempts to retrieve gametes. (III) Three attempts to create embryos. (IV) Three rounds of pretransfer testing. (V) Cryopreservation of gametes and embryos. (VI) Two years of storage for cryopreserved embryos. (VII) Unlimited storage for cryopreserved gametes. (VIII) Unlimited embryo transfers. (IX) Two vials of donor sperm. (X) Ten donor eggs. (XI) Surrogacy coverage for the services described above. (XII) Health testing of the surrogate for each attempted round of covered services. (ii) All of the following durable medical equipment: (I) Mobility devices, including, but not limited to, walkers and manual and power wheelchairs and scooters. (II) Augmented communications devices, including, but not limited to, speech generating devices, communications boards, and computer applications. (III) Continuous positive airway pressure machines. (IV) Portable oxygen. (V) Hospital beds. (iii) (I) An annual hearing exam. (II) One hearing aid per ear every three years. (3) With respect to habilitative services, in addition to any habilitative services and devices identified in paragraph (2), coverage shall also be provided as required by federal rules, regulations, and guidance issued pursuant to Section 1302(b) of PPACA. Habilitative services and devices shall be covered under the same terms and conditions applied to rehabilitative services and devices under the plan contract. Limits on habilitative and rehabilitative services and devices shall not be combined. (4) With respect to pediatric vision care, the same health benefits for pediatric vision care covered under the Federal Employees Dental and Vision Insurance Program vision plan with the largest national enrollment as of the first quarter of 2014. The pediatric vision care benefits covered pursuant to this paragraph shall be in addition to, and shall not replace, any vision services covered under the plan identified in paragraph (2). (5) With respect to pediatric oral care, the same health benefits for pediatric oral care covered under the dental benefit received by children under the Medi-Cal program as of 2014, including the provision of medically necessary orthodontic care provided pursuant to the federal Children’s Health Insurance Program Reauthorization Act of 2009. The pediatric oral care benefits covered pursuant to this paragraph shall be in addition to, and shall not replace, any dental or orthodontic services covered under the plan identified in paragraph (2). (b) Treatment limitations imposed on health benefits described in this section shall be no greater than the treatment limitations imposed by the corresponding plans identified in subdivision (a), subject to the requirements set forth in paragraph (2) of subdivision (a). (c) Except as provided in subdivision (d), this section does not permit a health care service plan to make substitutions for the benefits required to be covered under this section, regardless of whether those substitutions are actuarially equivalent. (d) To the extent permitted under Section 1302 of PPACA and any rules, regulations, or guidance issued pursuant to that section, and to the extent that substitution would not create an obligation for the state to defray costs for any individual, a plan may substitute its prescription drug formulary for the formulary provided under the plan identified in subdivision (a) if the coverage for prescription drugs complies with the sections referenced in clauses (ii) and (iv) of subparagraph (A) of paragraph (2) of subdivision (a) that apply to prescription drugs. (e) A health care service plan, or its agent, solicitor, or representative, shall not issue, deliver, renew, offer, market, represent, or sell any product, contract, or discount arrangement as compliant with the essential health benefits requirement in federal law, unless it meets all of the requirements of this section. (f) This section applies regardless of whether the plan contract is offered inside or outside the California Health Benefit Exchange created by Section 100500 of the Government Code. (g) This section does not exempt a plan or a plan contract from meeting other applicable requirements of law. (h) This section does not prohibit a plan contract from covering additional benefits, including, but not limited to, spiritual care services that are tax deductible under Section 213 of the Internal Revenue Code. (i) Subdivision (a) does not apply to any of the following: (1) A specialized health care service plan contract. (2) A Medicare supplement plan. (3) A plan contract that qualifies as a grandfathered health plan under Section 1251 of PPACA or any rules, regulations, or guidance issued pursuant to that section. (j) This section shall not be implemented in a manner that conflicts with a requirement of PPACA. (k) An essential health benefit is required to be provided under this section only to the extent that federal law does not require the state to defray the costs of the benefit. (l) This section does not obligate the state to incur costs for the coverage of benefits that are not essential health benefits as defined in this section. (m) A plan is not required to cover, under this section, changes to health benefits that are the result of statutes enacted on or after December 31, 2011. (n) (1) On or before January 1, 2027, the department may issue guidance to health care service plans regarding compliance with this section. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (2) The department may promulgate regulations subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) to implement this section. This subdivision shall not be construed to impair or restrict the department’s rulemaking authority pursuant to another provision of this code or the Administrative Procedure Act. (3) The department shall consult with the Department of Insurance in issuing guidance and in adopting regulations pursuant to paragraphs (1) and (2) for the purpose of implementing this section. (o) For purposes of this section, the following definitions apply: (1) “Habilitative services” means health care services and devices that help a person keep, learn, or improve skills and functioning for daily living. Examples include therapy for a child who is not walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology, and other services for people with disabilities in a variety of inpatient or outpatient settings, or both. Habilitative services shall be covered under the same terms and conditions applied to rehabilitative services under the plan contract. (2) (A) “Health benefits,” unless otherwise required to be defined pursuant to federal rules, regulations, or guidance issued pursuant to Section 1302(b) of PPACA, means health care items or services for the diagnosis, cure, mitigation, treatment, or prevention of illness, injury, disease, or a health condition, including a behavioral health condition. (B) “Health benefits” does not mean any cost-sharing requirements such as copayments, coinsurance, or deductibles. (3) “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. (4) “Small group health care service plan contract” means a group health care service plan contract issued to a small employer, as defined in Section 1357.500. (Amended by Stats. 2025, Ch. 739, Sec. 2. (SB 62) Effective January 1, 2026.)
  177. 1367.006.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    This section requires certain health care service plan contracts to cap annual out-of-pocket costs and, in some cases, limit deductibles for family coverage.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.006. (a) This section shall apply to nongrandfathered individual and group health care service plan contracts that provide coverage for essential health benefits, as defined in Section 1367.005, and that are issued, amended, or renewed on or after January 1, 2015. (b) (1) For nongrandfathered health care service plan contracts 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, 2015, shall provide for a limit on annual out-of-pocket expenses for all covered benefits that meet the definition of essential health benefits in Section 1367.005, including out-of-network emergency care consistent with Section 1371.4. (2) For nongrandfathered health care service plan contracts 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, 2015, 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 only apply to essential health benefits, as defined in Section 1367.005, that are 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 health care service plan contracts in the large group market. (c) (1) The limit described in subdivision (b) shall not exceed the limit described in Section 1302(c) of PPACA, and any subsequent rules, regulations, or guidance issued under that section. (2) The limit described in subdivision (b) shall result in a total maximum out-of-pocket limit for all covered essential health benefits equal to the dollar amounts in effect under Section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 with the dollar amounts adjusted as specified in Section 1302(c)(1)(B) of PPACA. (3) For family coverage, an individual within a family shall not have a maximum out-of-pocket limit that is greater than the maximum out-of-pocket limit for individual coverage for that product. (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) If an essential health benefit is offered or provided by a specialized health care service plan, the total annual out-of-pocket maximum for all covered essential benefits shall not exceed the limit in subdivision (b). This section shall not apply to a specialized health care service plan that does not offer an essential health benefit as defined in Section 1367.005. (f) The maximum out-of-pocket limit shall apply to any copayment, coinsurance, deductible, and any other form of cost sharing for all covered benefits that meet the definition of essential health benefits in Section 1367.005. (g) (1) (A) Except as provided in paragraph (2), if a health care service plan contract for family coverage includes a deductible, an individual within a family shall not have a deductible that is greater than the deductible limit for individual coverage for that product. (B) Except as provided in paragraph (2), if a large group market health care service plan contract for family coverage that is issued, amended, or renewed on or after January 1, 2017, includes a deductible, an individual within a family shall not have a deductible that is more than the deductible limit for individual coverage for that product. (2) (A) If a health care service plan contract for family coverage includes a deductible and is a high deductible health plan under the definition set forth in Section 223(c)(2) of Title 26 of the United States Code, the plan contract shall include a deductible for each individual covered by the plan that is equal to either the amount set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the United States Code or the deductible for individual coverage under the plan contract, whichever is greater. (B) If a large group market health care service plan contract for family coverage that is issued, amended, or renewed on or after January 1, 2017, includes a deductible and is a high deductible health plan under the definition set forth in Section 223(c)(2) of Title 26 of the United States Code, the plan contract shall include a deductible for each individual covered by the plan that is equal to either the amount set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the United States Code or the deductible for individual coverage under the plan contract, whichever is greater. (h) For nongrandfathered health plan contracts in the group market, “plan year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. For nongrandfathered health plan contracts sold in the individual market, “plan year” means the calendar year. (i) “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. (Amended by Stats. 2015, Ch. 641, Sec. 1. (AB 1305) Effective January 1, 2016.)
  178. 1367.0061.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must track and share enrollees’ deductible and out-of-pocket maximum accruals, and provide ways to request current balances.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.0061. (a) For a health care service plan contract issued, amended, or renewed on or after July 1, 2022, in the individual or group market, a health care service plan shall monitor an enrollee’s accrual toward their annual deductible, if any, for covered benefits, as set forth in this section and any regulations promulgated by the department. (1) A health care service plan shall provide an enrollee with their accrual balance toward their annual deductible for every month in which benefits were used and until the accrual balance equals the full deductible amount. (2) A health care service plan subject to this section shall establish and maintain a system that allows an enrollee to request their most up-to-date accrual balance toward their annual deductible from their health care service plan at any time. (3) If the health care service plan contract includes more than one annual deductible for an enrollee, then this section applies to each deductible. (b) For a health care service plan contract issued, amended, or renewed on or after July 1, 2022, in the individual or group market, a health care service plan shall monitor an enrollee’s accrual toward their annual out-of-pocket maximum, if any, for covered benefits, as set forth in this section and any regulations promulgated by the department. (1) A health care service plan shall provide an enrollee with their accrual balance toward their annual out-of-pocket maximum for every month in which benefits were used and until the accrual balance equals the full out-of-pocket maximum. (2) A health care service plan subject to this section shall establish and maintain a system that allows an enrollee to request their most up-to-date accrual balance toward their annual out-of-pocket maximum from their health care service plan at any time. (c) Accrual updates shall be mailed to enrollees unless the enrollee has elected to opt out of mailed notice and elected to receive the accrual update electronically, or unless the enrollee has previously opted out of mailed notices. (1) Enrollees who have opted out of receiving mailed notice may opt back in at any time. (2) Accrual updates may be included with evidence of benefit statements. (d) A health care service plan shall notify enrollees of their rights pursuant to this section, including, but not limited to, how to request information and how to opt out of mailed notices and elect to instead receive their accrual update electronically, in the manner set forth by the department. The department may issue guidance regarding implementation of, and compliance with, this subdivision. This guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 1340) of Part 1 of Division 3 of Title 2 of the Government Code), until January 1, 2027. The department shall consult with stakeholders in developing guidance pursuant to this subdivision. (e) If a health care service plan delegates claims payment functions to a contracted entity, including, but not limited to, a medical group or independent practice association, then the delegated entity shall comply with the requirements of this section. A health care service plan shall specify by contract the delegated entity’s responsibilities and shall monitor the delegated entity to ensure compliance with this section. Notwithstanding delegation pursuant to this subdivision, the health care service plan shall remain responsible for compliance with this section. (Added by Stats. 2021, Ch. 602, Sec. 1. (SB 368) Effective January 1, 2022.)
  179. 1367.007.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Small employer health care service plan contracts have deductible caps, with limited department discretion to allow higher deductibles for bronze-level small group products.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 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)(4) 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. (Amended by Stats. 2015, Ch. 641, Sec. 2. (AB 1305) Effective January 1, 2016.)
  180. 1367.008.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    This section sets coverage level standards for nongrandfathered individual health care service plan contracts and limits when catastrophic plans may be offered.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 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. (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 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 applicable to the plan type. (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) (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. (2) A catastrophic plan may be offered only in the individual market and only if consistent with 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 before the beginning of the plan year. (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. (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. (Added by Stats. 2013, Ch. 316, Sec. 6. (SB 639) Effective January 1, 2014.)
  181. 1367.0085.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    A nongrandfathered bronze level health plan may have an actuarial value between plus 5% and minus 2% if it meets the stated service-coverage or high-deductible-plan condition.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.0085. Notwithstanding paragraph (1) of subdivision (b) of Section 1367.008 and paragraph (1) of subdivision (b) of Section 1367.009, the actuarial value for a nongrandfathered bronze level health plan that either covers and pays for at least one major service, other than preventive services, before the deductible or meets the requirements to be a high deductible health plan, as defined in Section 223(c)(2) of Title 26 of the United States Code, may range from plus 5 percent to minus 2 percent. (Amended by Stats. 2020, Ch. 12, Sec. 3. (AB 80) Effective June 29, 2020.)
  182. 1367.009.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plan contracts in the nongrandfathered small group market must provide bronze, silver, gold, and platinum coverage at specified actuarial values, and the department may use certain federal methodology.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 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 applicable to the plan type. (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. (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) “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. (Added by Stats. 2013, Ch. 316, Sec. 7. (SB 639) Effective January 1, 2014.)
  183. 1367.01.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans and related contractors must follow detailed utilization review rules, use written policies, meet notice and decision deadlines, and limit AI use in medical-necessity decisions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.01. (a) A health care service plan and any entity with which it contracts for services that include utilization review or utilization management functions, that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, or that delegates these functions to medical groups or independent practice associations or to other contracting providers, shall comply with this section. (b) A health care service plan that is subject to this section shall have written policies and procedures establishing the process by which the plan prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based in whole or in part on medical necessity, requests by providers of health care services for plan enrollees. These policies and procedures shall ensure that decisions based on the medical necessity of proposed health care services are consistent with criteria or guidelines that are supported by clinical principles and processes. These criteria and guidelines shall be developed pursuant to Section 1363.5. These policies and procedures, and a description of the process by which the plan reviews and approves, modifies, delays, or denies requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, shall be filed with the director for review and approval, and shall be disclosed by the plan to providers and enrollees upon request, and by the plan to the public upon request. (c) A health care service plan subject to this section, except a plan that meets the requirements of Section 1351.2, shall employ or designate a medical director who holds an unrestricted license to practice medicine in this state issued pursuant to Section 2050 of the Business and Professions Code or pursuant to the Osteopathic Act, or, if the plan is a specialized health care service plan, a clinical director with California licensure in a clinical area appropriate to the type of care provided by the specialized health care service plan. The medical director or clinical director shall ensure that the process by which the plan reviews and approves, modifies, or denies, based in whole or in part on medical necessity, requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, complies with the requirements of this section. (d) If health plan personnel, or individuals under contract to the plan to review requests by providers, approve the provider’s request, pursuant to subdivision (b), the decision shall be communicated to the provider pursuant to subdivision (h). (e) No individual, other than a licensed physician or a licensed health care professional who is competent to evaluate the specific clinical issues involved in the health care services requested by the provider, may deny or modify requests for authorization of health care services for an enrollee for reasons of medical necessity. The decision of the physician or other health care professional shall be communicated to the provider and the enrollee pursuant to subdivision (h). (f) The criteria or guidelines used by the health care service plan to determine whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall be consistent with clinical principles and processes. These criteria and guidelines shall be developed pursuant to the requirements of Section 1363.5. (g) If the health care service plan requests medical information from providers in order to determine whether to approve, modify, or deny requests for authorization, the plan shall request only the information reasonably necessary to make the determination. (h) In determining whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to this section shall meet the following requirements: (1) Decisions to approve, modify, or deny, based on medical necessity, requests by providers prior to, or concurrent with the provision of health care services to enrollees that do not meet the requirements for the time period for review required by paragraph (2), shall be made in a timely fashion appropriate for the nature of the enrollee’s condition, not to exceed five business days from the plan’s receipt of the information reasonably necessary and requested by the plan to make the determination. In cases where the review is retrospective, the decision shall be communicated to the individual who received services, or to the individual’s designee, within 30 days of the receipt of information that is reasonably necessary to make this determination, and shall be communicated to the provider in a manner that is consistent with current law. For purposes of this section, retrospective reviews shall be for care rendered on or after January 1, 2000. (2) When the enrollee’s condition is such that the enrollee faces an imminent and serious threat to the enrollee’s health, including, but not limited to, the potential loss of life, limb, or other major bodily function, or the normal timeframe for the decisionmaking process, as described in paragraph (1), would be detrimental to the enrollee’s life or health or could jeopardize the enrollee’s ability to regain maximum function, decisions to approve, modify, or deny requests by providers prior to, or concurrent with, the provision of health care services to enrollees, shall be made in a timely fashion appropriate for the nature of the enrollee’s condition, not to exceed 72 hours or, if shorter, the period of time required under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules or regulations issued thereunder, after the plan’s receipt of the information reasonably necessary and requested by the plan to make the determination. Nothing in this section shall be construed to alter the requirements of subdivision (b) of Section 1371.4. Notwithstanding Section 1371.4, the requirements of this division shall be applicable to all health plans and other entities conducting utilization review or utilization management. (3) Decisions to approve, modify, or deny requests by providers for authorization prior to, or concurrent with, the provision of health care services to enrollees shall be communicated to the requesting provider within 24 hours of the decision. Except for concurrent review decisions pertaining to care that is underway, which shall be communicated to the enrollee’s treating provider within 24 hours, decisions resulting in denial, delay, or modification of all or part of the requested health care service shall be communicated to the enrollee in writing within two business days of the decision. In the case of concurrent review, care shall not be discontinued until the enrollee’s treating provider has been notified of the plan’s decision and a care plan has been agreed upon by the treating provider that is appropriate for the medical needs of that patient. (4) Communications regarding decisions to approve requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall specify the specific health care service approved. Responses regarding decisions to deny, delay, or modify health care services requested by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees shall be communicated to the enrollee in writing, and to providers initially by telephone or facsimile, except with regard to decisions rendered retrospectively, and then in writing, and shall include a clear and concise explanation of the reasons for the plan’s decision, a description of the criteria or guidelines used, and the clinical reasons for the decisions regarding medical necessity. Any written communication to a physician or other health care provider of a denial, delay, or modification of a request shall include the name and telephone number of the health care professional responsible for the denial, delay, or modification. The telephone number provided shall be a direct number or an extension, to allow the physician or health care provider easily to contact the professional responsible for the denial, delay, or modification. Responses shall also include information as to how the enrollee may file a grievance with the plan pursuant to Section 1368, and in the case of Medi-Cal enrollees, shall explain how to request an administrative hearing and aid paid pending under Sections 51014.1 and 51014.2 of Title 22 of the California Code of Regulations. (5) If the health care service plan cannot make a decision to approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2) because the plan is not in receipt of all of the information reasonably necessary and requested, or because the plan requires consultation by an expert reviewer, or because the plan has asked that an additional examination or test be performed upon the enrollee, provided the examination or test is reasonable and consistent with good medical practice, the plan shall, immediately upon the expiration of the timeframe specified in paragraph (1) or (2) or as soon as the plan becomes aware that it will not meet the timeframe, whichever occurs first, notify the provider and the enrollee, in writing, that the plan cannot make a decision to approve, modify, or deny the request for authorization within the required timeframe, and specify the information requested but not received, or the expert reviewer to be consulted, or the additional examinations or tests required. The plan shall also notify the provider and enrollee of the anticipated date on which a decision may be rendered. Upon receipt of all information reasonably necessary and requested by the plan, the plan shall approve, modify, or deny the request for authorization within the timeframes specified in paragraph (1) or (2), whichever applies. (6) If the director determines that a health care service plan has failed to meet any of the timeframes in this section, or has failed to meet any other requirement of this section, the director may assess, by order, administrative penalties for each failure. A proceeding for the issuance of an order assessing administrative penalties shall be subject to appropriate notice to, and an opportunity for a hearing with regard to, the person affected, in accordance with subdivision (a) of Section 1397. The administrative penalties shall not be deemed an exclusive remedy for the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45. (i) A health care service plan subject to this section shall maintain telephone access for providers to request authorization for health care services. (j) A health care service plan subject to this section that reviews requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees shall establish, as part of the quality assurance program required by Section 1370, a process by which the plan’s compliance with this section is assessed and evaluated. The process shall include provisions for evaluation of complaints, assessment of trends, implementation of actions to correct identified problems, mechanisms to communicate actions and results to the appropriate health plan employees and contracting providers, and provisions for evaluation of any corrective action plan and measurements of performance. (k) (1) A health care service plan, including a specialized health care service plan that uses an artificial intelligence, algorithm, or other software tool for the purpose of utilization review or utilization management functions, based in whole or in part on medical necessity, or that contracts with or otherwise works through an entity that uses an artificial intelligence, algorithm, or other software tool for the purpose of utilization review or utilization management functions, based in whole or in part on medical necessity, shall comply with this section and shall ensure all of the following: (A) The artificial intelligence, algorithm, or other software tool bases its determination on the following information, as applicable: (i) An enrollee’s medical or other clinical history. (ii) Individual clinical circumstances as presented by the requesting provider. (iii) Other relevant clinical information contained in the enrollee’s medical or other clinical record. (B) The artificial intelligence, algorithm, or other software tool does not base its determination solely on a group dataset. (C) The artificial intelligence, algorithm, or other software tool’s criteria and guidelines complies with this chapter, including, but not limited to, Section 1363.5 and applicable state and federal law. (D) The artificial intelligence, algorithm, or other software tool does not supplant health care provider decisionmaking. (E) The use of the artificial intelligence, algorithm, or other software tool does not discriminate, directly or indirectly, against enrollees in violation of state or federal law. (F) The artificial intelligence, algorithm, or other software tool is fairly and equitably applied, including in accordance with any applicable regulations and guidance issued by the federal Department of Health and Human Services. (G) The artificial intelligence, algorithm, or other software tool is open to inspection for audit or compliance reviews by the department pursuant to Section 1381 and by the State Department of Health Care Services pursuant to applicable state and federal law. (H) Disclosures pertaining to the use and oversight of the artificial intelligence, algorithm, or other software tool are contained in the written policies and procedures, as required by subdivision (b). (I) The artificial intelligence, algorithm, or other software tool’s performance, use, and outcomes are periodically reviewed and revised to maximize accuracy and reliability. (J) Patient data is not used beyond its intended and stated purpose, consistent with the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code) and the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191), as applicable. (K) The artificial intelligence, algorithm, or other software tool does not directly or indirectly cause harm to the enrollee. (2) Notwithstanding paragraph (1), the artificial intelligence, algorithm, or other software tool shall not deny, delay, or modify health care services based, in whole or in part, on medical necessity. A determination of medical necessity shall be made only by a licensed physician or a licensed health care professional competent to evaluate the specific clinical issues involved in the health care services requested by the provider, as provided in subdivision (e), by reviewing and considering the requesting provider’s recommendation, the enrollee’s medical or other clinical history, as applicable, and individual clinical circumstances. (3) For purposes of this subdivision, “artificial intelligence” means an engineered or machine-based system that varies in its level of autonomy and that can, for explicit or implicit objectives, infer from the input it receives how to generate outputs that can influence physical or virtual environments. (4) This subdivision shall apply to utilization review or utilization management functions that prospectively, retrospectively, or concurrently review requests for covered health care services. (5) A health care service plan subject to this subdivision shall comply with applicable federal rules and guidance issued by the federal Department of Health and Human Services regarding the use of artificial intelligence, algorithm, or other software tools. The department and the State Department of Health Care Services may issue guidance to implement this paragraph within one year of the adoption of federal rules or the issuance of guidance by the federal Department of Health and Human Services regarding the use of artificial intelligence, algorithm, or other software tools. Such guidance shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (6) For purposes of implementing this subdivision, the department and the State Department of Health Care Services may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this subdivision shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and shall be exempt from the review or approval of any division of the Department of General Services. (7) This subdivision applies to a Medi-Cal managed care plan only to the extent that the State Department of Health Care Services obtains any necessary federal approvals, and federal financial participation is not otherwise jeopardized. (l) The director shall review a health care service plan’s compliance with this section as part of its periodic onsite medical survey of each plan undertaken pursuant to Section 1380, and shall include a discussion of compliance with this section as part of its report issued pursuant to that section. (m) This section shall not apply to decisions made for the care or treatment of the sick who depend upon prayer or spiritual means for healing in the practice of religion as set forth in subdivision (a) of Section 1270. (n) Nothing in this section shall cause a health care service plan to be defined as a health care provider for purposes of any provision of law, including, but not limited to, Section 6146 of the Business and Professions Code, Sections 3333.1 and 3333.2 of the Civil Code, and Sections 340.5, 364, 425.13, 667.7, and 1295 of the Code of Civil Procedure. (Amended by Stats. 2024, Ch. 879, Sec. 1. (SB 1120) Effective January 1, 2025.)
  184. 1367.010.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    A nongrandfathered health care service plan generally must not market, offer, amend, or renew a large group contract with minimum value below 60 percent.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.010. (a) (1) A nongrandfathered health care service plan, except a health care service plan offering a specialized health care service plan contract, that offers, amends, or renews a large group health care service plan contract shall not market, offer, amend, or renew a large group plan contract that provides a minimum value of less than 60 percent. (2) This section shall not apply to limited wraparound coverage, consistent with Section 146.145(b) of Title 45 of the Code of Federal Regulations. (b) For purposes of this section, a plan shall provide a minimum value of at least 60 percent, as described in Section 36B(c)(2)(C) of the federal Internal Revenue Code and any regulation or guidance adopted under that section. (c) The following definitions apply for purposes of this section: (1) “Large group health care service plan contract” means a group health care service plan contract other than a contract issued to a “small employer,” as defined in Section 1357, 1357.500, or 1357.600. (2) “Plan year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. (Added by Stats. 2015, Ch. 617, Sec. 2. (AB 248) Effective January 1, 2016.)
  185. 1367.012.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    This section lets certain small employer health care service plan contracts be renewed and kept in force for limited periods, but it also requires the health care plan to give renewal notice and related information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.012. (a) (1) A small employer health care service plan contract in effect on December 31, 2013, and still in effect as of the effective date of this section, that does not qualify as a grandfathered health plan under Section 1251 of PPACA may be renewed until January 1, 2015, and may continue to be in force until December 31, 2015, subject to applicable federal law, and any other requirements imposed by this chapter. (2) A small employer health care service plan contract described in paragraph (1) may continue to be in force after December 31, 2015, if the contract is amended to comply with all of the provisions listed in subdivision (e) by January 1, 2016, and complies with all other applicable provisions of law. (b) (1) If a health care service plan offers for renewal a small employer health care service plan contract pursuant to paragraph (1) of subdivision (a), the health care service plan shall provide notice to the group contractholder regarding the option to renew coverage pursuant to subdivision (a) using the relevant notice attached to the guidance entitled “Insurance Standards Bulletin Series – Extension of Transition Policy through October 1, 2016,” issued by the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services on March 5, 2014. (2) A health care service plan shall include the following notice with the notice issued pursuant to paragraph (1): “New health care coverage options are available in California. You currently have health care coverage that is not required to comply with many new laws. A new health care service plan contract may be more affordable and/or offer more comprehensive benefits. New plans may also have limits on deductibles and out-of-pocket costs, while your existing plan may have no such limits. You have the option to remain with your current coverage for one more year or switch to new coverage that complies with the new laws. Covered California, the state’s new health insurance marketplace, offers small employers health insurance from a number of companies through its Small Business Health Options Program (SHOP). Federal tax credits are available through the SHOP to those small employers that qualify. Talk to Covered California (1-877-453-9198), your plan representative, or your insurance agent to discuss your options.” (3) A health care service plan shall include with the notices issued pursuant to paragraphs (1) and (2), the premium, cost sharing, and benefits associated with the plan’s standard benefit designs approved consistent with subdivision (c) of Section 100504 of the Government Code for the geographic region of the small employer. (4) A health care service plan that offers for renewal a small employer health care service plan contract pursuant to paragraph (1) of subdivision (a) shall offer renewal to all employers whose health care service plan contract with that health care service plan was in effect on December 31, 2013. (c) (1) A small employer health care service plan contract in effect on December 31, 2013, and still in effect as of the effective date of this section, that does not qualify as a grandfathered health plan under Section 1251 of PPACA that is renewed on or before January 1, 2015, and that continues to be in force until no later than December 31, 2015, is exempt from the following provisions: (A) Paragraphs (1) and (2) of subdivision (a) of, and subdivisions (e) and (i) of, Section 1357.503. (B) Section 1357.512. (C) Sections 1367.005 and 1357.508. (D) Section 1367.0065. (E) Section 1367.006. (F) Section 1367.007. (G) Section 1367.009. (2) Notwithstanding paragraphs (1) and (2) of subdivision (a) of, and subdivision (e) of, Section 1357.503, a small employer health care service plan contract subject to this section shall only be offered, marketed, and sold to an employer whose health care service plan contract with that health care service plan was in effect on December 31, 2013. (d) A small employer health care service plan contract described in paragraph (1) of subdivision (a) shall be subject to Sections 1357.12 and 1357.13, and shall continue to be subject to Article 3.16 (commencing with Section 1357.500), except as provided in subdivision (c), and to all otherwise applicable provisions of this chapter. (e) No later than January 1, 2016, a small employer health care service plan contract described in paragraph (1) of subdivision (a) may be amended to comply with all of the following: (1) Paragraphs (1) and (2) of subdivision (a) of, and subdivisions (e) and (i) of, Section 1357.503. (2) Section 1357.512. (3) Sections 1357.508 and 1367.005. (4) Section 1367.006. (5) Section 1367.007. (6) Section 1367.009. (f) This section shall be implemented only to the extent permitted by PPACA. (g) For purposes of this section, the following definitions shall apply: (1) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules, regulations, or guidance issued pursuant to that law. (2) “Small employer health care service plan contract” means a group health care service plan contract, other than a specialized health care service plan contract, issued to a small employer, as defined in subdivision (s) of Section 1357.500. (Added by Stats. 2014, Ch. 84, Sec. 1. (SB 1446) Effective July 7, 2014.)
  186. 1367.015.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans covered by Section 1367.01 cannot deny mental health service authorization requests or reimbursement claims based on whether an admission was voluntary or involuntary, or on how the person was transported to the health facility.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.015. In addition to complying with subdivision (h) of Section 1367.01, in determining whether to approve, modify, or deny requests by providers prior to, retrospectively, or concurrent with the provision of health care services to enrollees, based in whole or in part on medical necessity, a health care service plan subject to Section 1367.01 shall not base decisions to deny requests by providers for authorization for mental health services or to deny claim reimbursement for mental health services on either of the following: (a) Whether admission was voluntary or involuntary. (b) The method of transportation to the health facility. (Added by Stats. 2008, Ch. 722, Sec. 1. Effective January 1, 2009.)
  187. 1367.016.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must accept certain third-party premium payments, and other financially interested entities must follow disclosure, non-steering, and reimbursement rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.016. (a) A health care service plan shall accept premium payments from the following third-party entities without the need to comply with subdivision (c): (1) A Ryan White HIV/AIDS Program under Title XXVI of the federal Public Health Service Act. (2) An Indian tribe, tribal organization, or urban Indian organization. (3) A local, state, or federal government program, including a grantee directed by a government program to make payments on its behalf. (4) A member of the individual’s family, defined for purposes of this section to include the individual’s spouse, domestic partner, child, parent, grandparent, and siblings, unless the true source of funds used to make the premium payment originates with a financially interested entity. (b) A financially interested entity that is not specified in subdivision (a) and is making third-party premium payments shall comply with all of the following requirements: (1) It shall provide assistance for the full plan year and notify the enrollee prior to an open enrollment period, if applicable, if financial assistance will be discontinued. Notification shall include information regarding alternative coverage options, including, but not limited to, Medicare, Medicaid, individual market plans, and employer plans, if applicable. Assistance may be discontinued at the request of an enrollee who obtains other health coverage, or if the enrollee dies during the plan year. (2) It shall agree not to condition financial assistance on eligibility for, or receipt of, any surgery, transplant, procedure, drug, or device. (3) It shall inform an applicant of financial assistance, and shall inform a recipient annually, of all available health coverage options, including, but not limited to, Medicare, Medicaid, individual market plans, and employer plans, if applicable. (4) It shall agree not to steer, direct, or advise the patient into or away from a specific coverage program option or health care service plan contract. (5) It shall agree that financial assistance shall not be conditioned on the use of a specific facility, health care provider, or coverage type. (6) It shall agree that financial assistance shall be based on financial need in accordance with criteria that are uniformly applied and publicly available. (c) A financially interested entity shall not make a third-party premium payment unless the entity complies with both of the following requirements: (1) Annually provides a statement to the health care service plan that it meets the requirements set forth in subdivision (b), as applicable. (2) Discloses to the health care service plan, prior to making the initial payment, the name of the enrollee for each health care service plan contract on whose behalf a third-party premium payment described in this section will be made. (d) (1) Reimbursement for enrollees for whom a nonprofit financially interested entity described in paragraph (2) of subdivision (h) that was already making premium payments to a health care service plan on the enrollee’s behalf prior to October 1, 2019, is not subject to subdivisions (e) and (f) and the financially interested entity is not required to comply with the disclosure requirements described in subdivision (c) for those enrollees. (2) Notwithstanding paragraph (1), a financially interested entity shall comply with the disclosure requirements of subdivision (c) for an enrollee on whose behalf the financially interested entity was making premium payments to a health care service plan on the enrollee’s behalf prior to October 1, 2019, if the enrollee changes health care service plans on or after March 1, 2020. (3) The amount of reimbursement for services paid to a financially interested provider shall be governed by the terms of the enrollee’s health care service plan contract, except for an enrollee who has changed health care service plans pursuant to paragraph (2), in which case, commencing January 1, 2022, the reimbursement amount shall be determined in accordance with subdivisions (e) and (f). (e) Commencing January 1, 2022, if a financially interested entity makes a third-party premium payment to a health care service plan on behalf of an enrollee, reimbursement to a provider who is also a financially interested entity for covered services provided shall be determined by the following: (1) For a contracted financially interested provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, the amount of reimbursement for covered services that shall be paid to the financially interested provider on behalf of the enrollee shall be the higher of the Medicare reimbursement or the rate determined pursuant to the process described in this subdivision, if a rate determination pursuant to that process is sought by either the provider or the health care service plan. Financially interested providers shall neither bill the enrollee nor seek reimbursement from the enrollee for services provided, except for cost sharing pursuant to the terms and conditions of the enrollee’s health care service plan contract. If an enrollee’s contract imposes a coinsurance payment for a claim that is subject to this paragraph, the coinsurance payment shall be based on the amount paid by the health care service plan pursuant to this paragraph. (2) For a noncontracting financially interested provider that makes a third-party premium payment or has a financial relationship with the entity making the third-party premium payment, the amount of reimbursement for covered services that shall be paid to the financially interested provider on behalf of the enrollee shall be governed by the terms and conditions of the enrollee’s health care service plan contract or the rate determined pursuant to the process described in this subdivision, whichever is lower, if a rate determination pursuant to that process is sought by either the provider or the health care service plan. Financially interested providers shall neither bill the enrollee nor seek reimbursement from the enrollee for services provided, except for cost sharing pursuant to the terms and conditions of the enrollee’s health care service plan contract. If an enrollee’s contract imposes a coinsurance payment for a claim that is subject to this paragraph, the coinsurance payment shall be based on the amount paid by the health care service plan pursuant to this paragraph. A claim submitted to a health care service plan by a noncontracting financially interested provider may be considered an incomplete claim and contested by the health care service plan pursuant to Section 1371 or 1371.35 if the financially interested provider has not provided the information as required in subdivision (c). (f) (1) By October 1, 2021, the department shall establish an independent dispute resolution process for the purpose of determining if the amount required to be reimbursed by subdivision (e) is appropriate. (2) If either the provider or health care service plan submits a claim to the department’s independent dispute resolution process, the other party shall participate in the independent dispute resolution process. (3) In making its determination, the independent organization shall consider information submitted by either party regarding the actual cost to provide services, patient eligibility for Medicare or Medi-Cal, and the rate that would be paid by Medicare or Medi-Cal for patients eligible for those programs. (4) The health care service plan shall implement the determination obtained through the independent dispute resolution process. The independent organization’s determination of the amount required to be reimbursed shall apply for the duration of the plan year for that enrollee. If dissatisfied, either party may pursue any right, remedy, or penalty established under any other applicable law. (5) In establishing the independent dispute resolution process, the department shall permit the bundling of claims submitted to the same plan or the same delegated entity for the same or similar services. The department shall permit claims on behalf of multiple enrollees from the same provider to the same health care service plan to be combined into a single independent dispute resolution process. (6) The department shall establish uniform written procedures for the submission, receipt, processing, and resolution of claim payment disputes pursuant to this section and any other guidelines for implementing this section. (7) The department shall establish reasonable and necessary fees not to exceed the reasonable costs of administering this subdivision. (8) The department may contract with one or more independent organizations to conduct the proceedings. The independent organization handling a dispute shall be independent of either party to the dispute. (9) The department shall use conflict-of-interest standards consistent with the standards pursuant to subdivisions (c) and (d) of Section 1374.32. (10) The department may contract with the same independent organization or organizations as the Department of Insurance. (11) The independent organization retained to conduct proceedings shall be deemed to be consultants for purposes of Section 43.98 of the Civil Code. (12) Contracts entered into pursuant to the authority in this subdivision shall be exempt from Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, Section 19130 of the Government Code, and Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, and shall be exempt from the review or approval of any division of the Department of General Services. (13) This subdivision does not alter a health care service plan’s obligations under Section 1371. (14) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of all-plan letters or similar instructions, without taking regulatory action, until regulations are adopted. (g) For the purposes of this section, third-party premium payments only include health care service plan premium payments made directly by a provider or other third party, made indirectly through payments to the individual for the purpose of making health care service plan premium payments, or provided to one or more intermediaries with the intention that the funds be used to make health care service plan premium payments for the individuals. (h) The following definitions apply for purposes of this section: (1) “Enrollee” means an individual whose health care service plan premiums are paid by a financially interested entity. (2) “Financially interested” includes any of the following entities: (A) A provider of health care services that receives a direct or indirect financial benefit from a third-party premium payment. (B) An entity that receives the majority of its funding from one or more financially interested providers of health care services, parent companies of providers of health care services, subsidiaries of health care service providers, or related entities. (C) A chronic dialysis clinic that is operated, owned, or controlled by a parent entity or related entity that meets the definition of a large dialysis clinic organization (LDO) under the federal Centers for Medicare and Medicaid Services Comprehensive ESRD Care Model as of January 1, 2019. A chronic dialysis clinic that does not meet the definition of an LDO or has no more than 10 percent of California’s market share of licensed chronic dialysis clinics shall not be considered financially interested for purposes of this section. (3) “Health care service plan contract” means an individual or group health care service plan contract that provides medical, hospital, and surgical benefits, except a specialized health care service plan contract. The term does not include coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement coverage, long-term care insurance, coverage issued as a supplement to liability insurance, insurance arising out of workers’ compensation law or similar law, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance. (4) “Provider” means a professional person, organization, health facility, or other person or institution that delivers or furnishes health care services. (i) The following shall occur if a health care service plan subsequently discovers that a financially interested entity fails to provide disclosure pursuant to subdivision (c): (1) The health care service plan shall be entitled to recover 120 percent of the difference between a payment made to a provider and the payment to which the provider would have been entitled pursuant to subdivision (e), including interest on that difference. (2) The health care service plan shall notify the department of the amount by which the provider was overpaid and shall remit to the department any amount exceeding the difference between the payment made to the provider and the payment to which the provider would have been entitled pursuant to subdivision (e), including interest on that difference that was recovered pursuant to paragraph (1). (j) Commencing January 1, 2022, each health care service plan licensed by the department and subject to this section shall provide to the department information regarding premium payments by financially interested entities and reimbursement for services to providers under subdivision (e). The information shall be provided at least annually at the discretion of the department and shall include, to the best of the health care service plan’s knowledge, the number of enrollees whose premiums were paid by financially interested entities, disclosures provided to the plan pursuant to subdivision (c), the identities of any providers whose reimbursement rate was governed by subdivision (e), the identities of any providers who failed to provide disclosure as described in subdivision (c), and, at the discretion of the department, additional information necessary for the implementation of this section. (k) This section does not limit the authority of the Attorney General to take action to enforce this section. (l) This section does not affect a contracted payment rate for a provider who is not financially interested. (m) This section does not alter any of a health care service plan’s obligations and requirements under this chapter, including, but not limited to, the following: (1) The obligation of a health care service plan to fairly and affirmatively offer, market, sell, and issue a health benefit plan to any individual, consistent with Article 11.8 (commencing with Section 1399.845), or small employer, consistent with Article 3.1 (commencing with Section 1357). (2) The obligations of a health care service plan with respect to cancellation or nonrenewal as provided in this chapter, including, but not limited to, Section 1365. (3) A health care service plan may not deny coverage to an enrollee whose premiums are paid by a third party. (n) This section does not supersede or modify any privacy and information security requirements and protections in federal and state law regarding protected health information or personally identifiable information, including, but not limited to, the federal Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. Sec. 300gg). (o) Notwithstanding clause (iii) of subparagraph (A) of paragraph (1) of subdivision (d) of Section 1399.849, an enrollee’s loss of coverage due to a financially interested entity’s failure to pay premiums on a timely basis shall be deemed a triggering event for special enrollment pursuant to subparagraph (A) of paragraph (1) of subdivision (d) of Section 1399.849. (Added by Stats. 2019, Ch. 862, Sec. 3. (AB 290) Effective January 1, 2020.)
  188. 1367.02.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must file economic-profiling policies with the department by July 1, 1999, and the director must make filings public on request, except confidential information.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.02. (a) On or before July 1, 1999, for purposes of public disclosure, every health care service plan shall file with the department a description of any policies and procedures related to economic profiling utilized by the plan and its medical groups and individual practice associations. The filing shall describe how these policies and procedures are used in utilization review, peer review, incentive and penalty programs, and in provider retention and termination decisions. The filing shall also indicate in what manner, if any, the economic profiling system being used takes into consideration risk adjustments that reflect case mix, type and severity of patient illness, age of patients, and other enrollee characteristics that may account for higher or lower than expected costs or utilization of services. The filing shall also indicate how the economic profiling activities avoid being in conflict with subdivision (g) of Section 1367, which requires each plan to demonstrate that medical decisions are rendered by qualified medical providers, unhindered by fiscal and administrative management. Any changes to the policies and procedures shall be filed with the director pursuant to Section 1352. Nothing in this section shall be construed to restrict or impair the department, in its discretion, from utilizing the information filed pursuant to this section for purposes of ensuring compliance with this chapter. (b) The director shall make each plan’s filing available to the public upon request. The director shall not publicly disclose any information submitted pursuant to this section that is determined by the director to be confidential pursuant to state law. (c) Each plan that uses economic profiling shall, upon request, provide a copy of economic profiling information related to an individual provider, contracting medical group, or individual practice association to the profiled individual, group, or association. In addition, each plan shall require as a condition of contract that its medical groups and individual practice associations that maintain economic profiles of individual providers shall, upon request, provide a copy of individual economic profiling information to the individual providers who are profiled. The economic profiling information provided pursuant to this section shall be provided upon request until 60 days after the date upon which the contract between the plan and the individual provider, medical group, or individual practice association terminates, or until 60 days after the date the contract between the medical group or individual practice association and the individual provider terminates, whichever is applicable. (d) For the purposes of this article, “economic profiling” shall mean any evaluation of a particular physician, provider, medical group, or individual practice association based in whole or in part on the economic costs or utilization of services associated with medical care provided or authorized by the physician, provider, medical group, or individual practice association. (Amended by Stats. 1999, Ch. 525, Sec. 95. Effective January 1, 2000. Operative July 1, 2000, or sooner, by Sec. 214 of Ch. 525.)
  189. 1367.025.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    This section requires the department to direct reporting on prior authorization, and requires health care service plans to report data, stop prior authorization for listed services once the effective date applies, and follow limited exceptions.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.025. (a) On or before July 1, 2026, the department shall issue instructions to health care service plans to report all covered health care services subject to prior authorization, the percentage rate at which they are approved or modified by the health care service plan or its delegated entity, and other statistics regarding prior authorization determinations as determined by the department. These instructions shall include a standard reporting template. (b) (1) On or before December 31, 2026, a health care service plan shall report to the department, in accordance with the instructions issued pursuant to subdivision (a), the covered health care services subject to prior authorization, the percentage rate at which they are approved or modified by the health care service plan or its delegated entity, data regarding requested or authorized duration, frequency, or level of care of the health care services, and other statistics regarding prior authorization determinations pursuant to subdivision (a). Data regarding modifications shall be reported separately from approvals in accordance with the instructions issued pursuant to subdivision (a). (2) If a health care service plan delegates responsibility for decisions regarding prior authorization requests to another entity, the health care service plan shall obtain information required to be reported by this section from each delegated entity and include that information in the health care service plan’s report to the department. A health care service plan shall require a delegated entity to comply with a request made pursuant to this paragraph. (c) (1) The department shall evaluate the reports received pursuant to this section and identify the health care services approved by health care service plans or their delegated entities at a rate that meets or exceeds the threshold rate of 90 percent. For purposes of this paragraph, “approved” may also include modified requests for the purpose of calculating the threshold rate as the department determines appropriate. (2) The department may consider all of the following factors when determining the appropriateness of removing prior authorization for a specific covered health care service, regardless of its approval percentage rate: (A) Utilization of a health care service in a manner inconsistent with current clinical practice guidelines published in peer-reviewed medical literature or United States Food and Drug Administration-approved indications, as applicable. (B) The potential for fraud, waste, and abuse. (C) The potential for cost savings from eliminating prior authorization, including out-of-pocket cost savings to the enrollee. (D) The potential for improvements in quality of care, health care outcomes, and timely access to care for enrollees from eliminating prior authorization. (E) Other factors deemed appropriate by the department. (3) Before finalizing the list of covered health care services pursuant to this section, the department shall consult interested stakeholders. (4) On or before July 1, 2027, the department shall publish the list of covered health care services identified pursuant to paragraph (1). As of the date specified in subparagraph (A) of paragraph (5), a health care service plan shall not impose prior authorization on a covered health care service included on the list published by the department pursuant to this paragraph. (5) The department shall issue instructions to health care service plans regarding all of the following: (A) The date, which shall be no later than January 1, 2028, by which the health care service plan and its delegated entities shall cease requiring prior authorization for the covered health care services identified pursuant to this subdivision. When issuing the date by which a health care service plan and its delegated entities shall cease requiring prior authorization pursuant to this section, the department shall take into consideration the time necessary for plans to update their contracts. (B) Requirements for notifying providers of the change in prior authorization requirements. (C) The process by which a health care service plan may petition the department to reinstate the ability of the health care service plan to use prior authorization for a particular covered health care service upon a showing of good cause that a lack of prior authorization for the covered health care service has resulted in a demonstrable increase in the cost of care or decrease in the quality of care for the health care service plan’s enrollees, including fraud, waste, or abuse. The department determination on a petition pursuant to this subparagraph shall be made within 60 days of receipt of all information necessary for the department to issue a decision on the petition. A health care service plan shall not reinstate prior authorization for a covered health care service subject to this section until authorized by the department and in accordance with any other law, as applicable. (6) The department may issue other instructions it deems necessary and appropriate to implement this section. (d) Notwithstanding subdivision (c), a health care service plan may impose prior authorization on any of the following: (1) Outpatient prescription drugs in tier three or four of a health care service plan’s formulary, as those tiers are defined in Section 1342.73. (2) A drug or medical device prescribed or recommended for a use that is different from the use for which the drug or medical device has been cleared or approved for marketing by the United States Food and Drug Administration. (3) A covered health care service that is experimental or investigational, excluding services for which there is medical or scientific evidence, as defined in Section 1370.4. (4) A covered health care service that is prescribed or recommended for a use that is a novel application of an existing therapy or technology, excluding uses for which there is medical or scientific evidence, as defined in Section 1370.4. (5) A covered health care service requested, ordered, prescribed, delivered, furnished, or dispensed by an out-of-network or noncontracting provider. (e) A covered health care service that is exempted from prior authorization pursuant to this section constitutes a service authorized by the health care service plan for purposes of Section 1371.8. A health care service plan or its delegated entity shall not deny or reduce the contracted or agreed upon payment, or the applicable rate or reimbursement methodology specified in a plan contract, for a covered health care service exempted from a prior authorization requirement pursuant to this section unless the provider failed to substantially perform or supply the covered health care service. (f) Notwithstanding subdivision (c), a health care service plan may, in accordance with any other applicable law, reinstate prior authorization for a specific health care provider on a covered health care service for which prior authorization is otherwise prohibited pursuant to subdivision (c) only if the health care service plan has determined, based on clear and convincing evidence, that the health care provider has engaged in either of the following: (1) Fraudulent activity related to the provision or billing of health care services. (2) Pattern or practice of repeatedly providing care that is clinically inappropriate or inconsistent with generally accepted standards of care, and that results in either potential harm to patients or excessive utilization of health care resources inconsistent with generally accepted standards of care. (g) (1) The department may contract with a consultant or consultants with expertise in this subject area to assist the department in implementing this section, including developing instructions described in subdivision (a), evaluating the reports received by the department pursuant to subdivision (b), developing and publishing a list pursuant to subdivision (c), developing other implementation instructions, and drafting the report required pursuant to this section. (2) The department’s contract with a consultant shall include conflict-of-interest provisions to prohibit a person from participating in a report in which the person knows or has reason to know they have a material financial interest, including a person who has a consulting or other agreement with a person or organization that would be affected by the results of the report. (3) Contracts entered into pursuant to this subdivision are exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and shall be exempt from the review or approval of any division of the Department of General Services. (h) No later than four years after the date determined by the department for cessation of prior authorization requirements pursuant to subparagraph (A) of paragraph (5) of subdivision (c), the department shall publish a report regarding the impacts of the cessation of prior authorization requirements. A health care service plan shall report information and data regarding the impacts of implementing this section, including effects on the volume of covered health care services subjected to prior authorization, statistics on prior authorization requests and determinations, administrative costs, timely access to care, enrollee health outcomes, and data on reinstatements of prior authorization pursuant to subdivision (f), to be included in this report. (i) (1) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of all-plan letters, methodologies, rules, definitions, policies, forms, information or data requests, or similar instructions, without taking regulatory action, until this section is repealed. (2) The department shall consult with the Department of Insurance before issuing instructions and the list of covered health care services for which prior authorization is prohibited, pursuant to this section, to ensure consistency to the extent practical. (j) A health care service plan shall not delegate the requirements of this section to a delegated provider, pharmacy benefit manager, or other entity, unless the parties have negotiated and agreed upon a new provision to the parties’ contract, as provided in Section 1375.7. A change to the parties’ contract pursuant to this subdivision shall be considered a material change. Notwithstanding delegation pursuant to this subdivision, a health care service plan shall comply with this section, including paragraph (2) of subdivision (b). (k) (1) This section does not apply to a specialized health care service plan, except to the extent the plan provides or administers essential health benefits pursuant to health care service plan contracts subject to Section 1367.005. (2) This section does not apply to a Medi-Cal managed care plan contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code. (l) For purposes of this section: (1) “Covered health care service” means a health care item, product, drug, supply, procedure, treatment, or service covered by a health care service plan contract. (2) “Prior authorization” means the process by which utilization review determines the medical necessity or medical appropriateness of otherwise covered health care services prior to or concurrent with the rendering of those health care services. “Prior authorization” also includes a health care service plan’s or its delegated entity’s requirement that an enrollee or health care provider notify the health care service plan before providing a health care service, including preauthorization, precertification, and prior approval. (m) This section shall remain in effect only until January 1, 2034, and as of that date is repealed. (Added by Stats. 2025, Ch. 408, Sec. 1. (SB 306) Effective January 1, 2026. Repealed as of January 1, 2034, by its own provisions.)
  190. 1367.03.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans covered by this section must provide timely access to care, including appointment timeframes, telephone triage, interpreter coordination, and reporting duties.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.03. (a) A health care service plan that provides or arranges for the provision of hospital or physician services, including a specialized mental health plan that provides physician or hospital services, or that provides mental health services pursuant to a contract with a full service plan, shall comply with the following timely access requirements: (1) A health care service plan shall provide or arrange for the provision of covered health care services in a timely manner appropriate for the nature of the enrollee’s condition consistent with good professional practice. A plan shall establish and maintain networks, policies, procedures, and quality assurance monitoring systems and processes sufficient to ensure compliance with this clinical appropriateness standard. A health care service plan that uses a tiered network shall demonstrate compliance with the standards established by this section based on providers available at the lowest cost-sharing tier. (2) A health care service plan shall ensure that all plan and provider processes necessary to obtain covered health care services, including, but not limited to, prior authorization processes, are completed in a manner that assures the provision of covered health care services to an enrollee in a timely manner appropriate for the enrollee’s condition and in compliance with this section. (3) If it is necessary for a provider or an enrollee to reschedule an appointment, the appointment shall be promptly rescheduled in a manner that is appropriate for the enrollee’s health care needs, and ensures continuity of care consistent with good professional practice, and consistent with this section and the regulations adopted thereunder. (4) Interpreter services required by Section 1367.04 of this code and Section 1300.67.04 of Title 28 of the California Code of Regulations shall be coordinated with scheduled appointments for health care services in a manner that ensures the provision of interpreter services at the time of the appointment without imposing delay on the scheduling of the appointment. This subdivision does not modify the requirements established in Section 1300.67.04 of Title 28 of the California Code of Regulations, or approved by the department pursuant to Section 1300.67.04 of Title 28 of the California Code of Regulations for a plan’s language assistance program. (5) In addition to ensuring compliance with the clinical appropriateness standard set forth in paragraph (1), a health care service plan shall ensure that its network has adequate capacity and availability of licensed health care providers to offer enrollees appointments that meet the following timeframes: (A) Urgent care appointments for services that do not require prior authorization: within 48 hours of the request for appointment, except as provided in subparagraph (H). (B) Urgent care appointments for services that require prior authorization: within 96 hours of the request for appointment, except as provided in subparagraph (H). (C) Nonurgent appointments for primary care: within 10 business days of the request for appointment, except as provided in subparagraphs (H) and (I). (D) Nonurgent appointments with specialist physicians: within 15 business days of the request for appointment, except as provided in subparagraphs (H) and (I). (E) Nonurgent appointments with a nonphysician mental health care or substance use disorder provider: within 10 business days of the request for appointment, except as provided in subparagraphs (H) and (I). (F) Commencing July 1, 2022, nonurgent followup appointments with a nonphysician mental health care or substance use disorder provider: within 10 business days of the prior appointment for those undergoing a course of treatment for an ongoing mental health or substance use disorder condition, except as provided in subparagraph (H). This subparagraph does not limit coverage for nonurgent followup appointments with a nonphysician mental health care or substance use disorder provider to once every 10 business days. (G) Nonurgent appointments for ancillary services for the diagnosis or treatment of injury, illness, or other health condition: within 15 business days of the request for appointment, except as provided in subparagraphs (H) and (I). (H) The applicable waiting time for a particular appointment may be extended if the referring or treating licensed health care provider, or the health professional providing triage or screening services, as applicable, acting within the scope of their practice and consistent with professionally recognized standards of practice, has determined and noted in the relevant record that a longer waiting time will not have a detrimental impact on the health of the enrollee. (I) Preventive care services, as defined in subdivision (e), and periodic followup care, including standing referrals to specialists for chronic conditions, periodic office visits to monitor and treat pregnancy, cardiac, mental health, or substance use disorder conditions, and laboratory and radiological monitoring for recurrence of disease, may be scheduled in advance consistent with professionally recognized standards of practice as determined by the treating licensed health care provider acting within the scope of their practice. (J) A referral to a specialist by a primary care provider or another specialist shall be subject to the relevant time-elapsed standard in subparagraph (A), (B), or (D), unless the requirements in subparagraph (H) or (I) are met, and shall be subject to the other provisions of this section. (K) A plan may demonstrate compliance with the primary care time-elapsed standards established by this subdivision through implementation of standards, processes, and systems providing advanced access to primary care appointments, as defined in subdivision (e). (6) In addition to ensuring compliance with the clinical appropriateness standard set forth in paragraph (1), each dental plan, and each full service plan offering coverage for dental services, shall ensure that dental networks have adequate capacity and availability of licensed health care providers to offer enrollees appointments for covered dental services in accordance with the following requirements: (A) Urgent appointments within the dental plan network shall be offered within 72 hours of the time of request for appointment, if consistent with the enrollee’s individual needs and as required by professionally recognized standards of dental practice. (B) Nonurgent appointments shall be offered within 36 business days of the request for appointment, except as provided in subparagraph (C). (C) Preventive dental care appointments shall be offered within 40 business days of the request for appointment. (7) A plan shall ensure it has sufficient numbers of network providers to maintain compliance with the standards established by this section. (A) This section does not modify the requirements regarding provider-to-enrollee ratio or geographic accessibility established by Section 1300.51, 1300.67.2, or 1300.67.2.1 of Title 28 of the California Code of Regulations. (B) A plan operating in a network service area that has a shortage of one or more types of providers shall ensure timely access to covered health care services as required by this section, including applicable time-elapsed standards, by referring an enrollee to, or, in the case of a preferred provider network, by assisting an enrollee to locate available and accessible network providers in neighboring network service areas consistent with patterns of practice for obtaining health care services in a timely manner appropriate for the enrollee’s health needs. (C) A plan shall arrange for the provision of covered services from providers outside the plan’s network if unavailable within the network if medically necessary for the enrollee’s condition. A plan shall ensure that enrollee costs for medically necessary referrals to nonnetwork providers shall not exceed applicable in-network copayments, coinsurance, and deductibles. This requirement does not prohibit a plan or its delegated provider group from accommodating an enrollee’s preference to wait for a later appointment from a specific network provider. If medically necessary treatment of a mental health or substance use disorder is not available in network within the geographic and timely access standards set by law or regulation, a health care service plan shall arrange coverage outside the plan’s network in accordance with subdivision (d) of Section 1374.72. (8) A plan shall provide or arrange for the provision, 24 hours per day, 7 days per week, of triage or screening services by telephone, as defined in subdivision (e). (A) A plan shall ensure that telephone triage or screening services are provided in a timely manner appropriate for the enrollee’s condition, and that the triage or screening waiting time does not exceed 30 minutes. (B) A plan may provide or arrange for the provision of telephone triage or screening services through one or more of the following means: plan-operated telephone triage or screening services, telephone medical advice services pursuant to Section 1348.8, the plan’s primary care and mental health care or substance use disorder network, or another method that provides triage or screening services consistent with this section. (i) A plan that arranges for the provision of telephone triage or screening services through network primary care, mental health care, and substance use disorder providers shall require those providers to maintain a procedure for triaging or screening enrollee telephone calls, which, at a minimum, shall include the employment, during and after business hours, of a telephone answering machine, an answering service, or office staff, that shall inform the caller of both of the following: (I) Regarding the length of wait for a return call from the provider. (II) How the caller may obtain urgent or emergency care, including, if applicable, how to contact another provider who has agreed to be on call to triage or screen by phone, or if needed, deliver urgent or emergency care. (ii) A plan that arranges for the provision of triage or screening services through network primary care, mental health care, and substance use disorder providers who are unable to meet the time-elapsed standards established in subparagraph (A) shall also provide or arrange for the provision of plan-contracted or operated triage or screening services, which shall, at a minimum, be made available to enrollees affected by that portion of the plan’s network. (iii) An unlicensed staff person handling enrollee calls may ask questions on behalf of a licensed staff person to help ascertain the condition of an insured so that the enrollee may be referred to licensed staff. However, an unlicensed staff person shall not, under any circumstances, use the answers to those questions in an attempt to assess, evaluate, advise, or make a decision regarding the condition of an enrollee or determine when an enrollee needs to be seen by a licensed medical professional. (9) Dental, vision, chiropractic, and acupuncture plans shall ensure that network providers employ an answering service or a telephone answering machine during nonbusiness hours, which provide instructions regarding how an enrollee may obtain urgent or emergency care, including, if applicable, how to contact another provider who has agreed to be on call to triage or screen by phone, or if needed, deliver urgent or emergency care. (10) A plan shall ensure that, during normal business hours, the waiting time for an enrollee to speak by telephone with a plan customer service representative knowledgeable and competent regarding the enrollee’s questions and concerns shall not exceed 10 minutes. (b) With regard to subdivision (a), dental, vision, chiropractic, and acupuncture plans shall comply with paragraphs (1), (3), (4), (7), (9), and (10). (c) The obligation of a plan to comply with this section shall not be waived if the plan delegates to its provider groups or other contracting entities any services or activities that the plan is required to perform. A plan’s implementation of this section shall be consistent with the Health Care Providers’ Bill of Rights, and a material change in the obligations of a plan’s network providers shall be considered a material change to the provider contract, within the meaning of subdivision (b) and paragraph (2) of subdivision (h) of Section 1375.7. (d) A health care service plan shall incorporate the standards set forth in subdivision (a) into the health plan’s quality assurance systems and the processes set forth in Sections 1367 and 1370 of this code and Title 28 of the California Code of Regulations, including Sections 1300.67.2, 1300.67.2.2, 1300.68, and 1300.70. A plan shall not prevent, discourage, or discipline a network provider or employee for informing an enrollee or subscriber about the timely access standards. (e) For purposes of this section: (1) “Advanced access” means the provision, by a network provider, or by the provider group to which an enrollee is assigned, of appointments with a primary care physician, or other qualified primary care provider such as a nurse practitioner or physician’s assistant, within the same or next business day from the time an appointment is requested, and advance scheduling of appointments at a later date if the enrollee prefers not to accept the appointment offered within the same or the next business day. (2) “Appointment waiting time” means the time from the initial request for health care services by an enrollee or the enrollee’s treating provider to the earliest date offered for the appointment for services inclusive of time for obtaining authorization from the plan or completing any other condition or requirement of the plan or its network providers. (3) “Preventive care” means health care provided for prevention and early detection of disease, illness, injury, or another health condition and, in the case of a full service plan includes all of the basic health care services required by Sections 1345, 1367.002, 1367.3, and 1367.35 of this code and subdivision (f) of Section 1300.67 of Title 28 of the California Code of Regulations. (4) “Provider group” has the meaning set forth in subdivision (g) of Section 1373.65. (5) “Triage” or “screening” means the assessment of an enrollee’s health concerns and symptoms via communication with a physician, registered nurse, or other qualified health professional acting within their scope of practice and who is trained to screen or triage an enrollee who may need care for the purpose of determining the urgency of the enrollee’s need for care. (6) “Triage or screening waiting time” means the time waiting to speak by telephone with a physician, registered nurse, or other qualified health professional acting within their scope of practice and who is trained to screen or triage an enrollee who may need care. (7) “Urgent care” means health care for a condition that requires prompt attention, consistent with paragraph (2) of subdivision (h) of Section 1367.01. (f) (1) Contracts between health care service plans and health care providers shall ensure compliance with the standards developed under this chapter. These contracts shall require reporting by health care providers to health care service plans and by health care service plans to the department to ensure compliance with the standards. (2) Health care service plans shall report annually to the department on compliance with the standards in a manner specified by the department. The reported information shall allow consumers to compare the performance of plans and their network providers in complying with the standards, as well as changes in the compliance of plans with these standards. (3) The department shall develop standardized methodologies for reporting that shall be used by health care service plans to demonstrate compliance with this section and any regulations adopted pursuant to it, including demonstration of the average waiting time for each class of appointment regulated under this section, except the department may develop methodologies to demonstrate compliance with, and the average appointment wait time for, each class of appointments regulated under paragraph (6) of subdivision (a). The methodologies shall be sufficient to determine compliance with the standards developed under this section for different networks of providers if a health care service plan uses a different network for Medi-Cal managed care products than for other products or if a health care service plan uses a different network for individual market products than for small group market products. The development and adoption of these methodologies shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) until December 31, 2025. The department shall consult with stakeholders in developing standardized methodologies under this paragraph. (4) Notwithstanding paragraph (3), the department may take compliance or disciplinary action, including assessment of administrative penalties, on the basis of noncompliance with any of the provisions of this section, including, but not limited to, timeframes for appointments and followup appointments. (5) The department may review and adopt standards, in addition to those specified in this article, concerning the availability of primary care physicians, specialty physicians, hospital care, and other health care, so that consumers have timely access to care. In so doing, the department shall consider the nature of physician practices, including individual and group practices, as well as the nature of the plan network. The department shall also consider various circumstances affecting the delivery of care, including urgent care, care provided on the same day, and requests for specific providers. If the department finds that health care service plans and health care providers have difficulty meeting these standards, the department may make recommendations to the Assembly Committee on Health and the Senate Committee on Health pursuant to subdivision (i). The development and adoption of standards under this paragraph shall not be subject to the Administrative Procedure Act until December 31, 2028. The department shall consult with stakeholders in developing the standards and methodologies described in this section. (g) (1) The director may investigate and, by order, take enforcement action against plans, including, but not limited to, assessing administrative penalties subject to appropriate notice of, and the opportunity for, a hearing in accordance with Section 1397, regarding noncompliance with the requirements of this section. The director shall consider, as an aggravating factor when assessing administrative penalties, if harm to an enrollee, including financial or health impacts to an enrollee or substantial harm as defined in Section 3428 of the Civil Code, has occurred as a result of plan noncompliance. The director has the discretion to determine what harm constitutes harm to an enrollee. The plan may provide to the director, and the director may consider, information regarding the plan’s overall compliance with the requirements of this section. When taking enforcement action against a plan, the director may consider patterns of noncompliance. The administrative penalties shall not be deemed an exclusive remedy available to the director. These penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45. The director shall periodically evaluate grievances to determine if any audit, investigative, or enforcement actions should be undertaken by the department. (2) The director may, after appropriate notice and opportunity for hearing in accordance with Section 1397, by order, assess administrative penalties if the director determines that a health care service plan has knowingly committed, or has performed with a frequency that indicates a general business practice, either of the following: (A) Repeated failure to act promptly and reasonably to assure timely access to care consistent with this chapter. (B) Repeated failure to act promptly and reasonably to require network providers to assure timely access that the plan is required to perform under this chapter and that have been delegated by the plan to the network provider when the obligation of the plan to the enrollee or subscriber is reasonably clear. (C) The administrative penalties available to the director pursuant to this section are not exclusive, and may be sought and employed in any combination with civil, criminal, and other administrative remedies deemed warranted by the director to enforce this chapter. (3) The administrative penalties shall be paid to the Managed Care Administrative Fines and Penalties Fund and shall be used for the purposes specified in Section 1341.45. (h) The department shall work with the Department of Health Care Access and Information to assure that the quality of care report card incorporates information provided pursuant to subdivision (f) regarding the degree to which health care service plans and health care providers comply with the requirements for timely access to care. (i) The department shall annually review information regarding compliance with the standards developed under this section and shall make recommendations for changes that further protect enrollees. Commencing no later than December 1, 2015, and annually thereafter, the department shall post its final findings from the review on its internet website. (j) The department shall post on its internet website any waivers or alternative standards that the department approves under this section on or after January 1, 2015. (k) This section applies to a licensed health care service plan that provides services to Medi-Cal beneficiaries. Except for appointment wait time standards set forth in paragraph (5) of subdivision (a) of this section and in Section 1300.67.2.2 of Title 28 of the California Code of Regulations, this section does not alter the requirements or standards of the State Department of Health Care Services specified in Section 14197 of the Welfare and Institutions Code. (l) This section does not prevent the department from developing additional standards to improve timely access to care and network adequacy. (Amended by Stats. 2026, Ch. 27, Sec. 11. (SB 164) Effective June 29, 2026.)
  191. 1367.031.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must give enrollees and contracting providers information about timely access to care, including wait times and interpreter services, and must provide it on specified schedules and formats.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.031. (a) A health care service plan contract that is issued, renewed, or amended on or after July 1, 2017, shall provide information to an enrollee regarding the standards for timely access to care adopted pursuant to Section 1367.03 and the information required by this section, including information related to receipt of interpreter services in a timely manner, no less than annually. (b) A health care service plan contract that is issued, renewed, or amended on or after July 1, 2022, shall provide information to an enrollee regarding the standards for timely access to care required by Section 1367.03 and the information required by this section, including information related to receipt of interpreter services in a timely manner, no less than annually. (c) A health care service plan at a minimum shall provide information regarding appointment wait times for urgent care, nonurgent primary care, nonurgent specialty care, and telephone screening established in Section 1367.032 or pursuant to Section 1367.03 to enrollees and contracting providers. The information shall also include notice of the availability of interpreter services at the time of the appointment pursuant to Section 1367.04. A health care service plan may indicate that exceptions to appointment wait times may apply if the department has found exceptions to be permissible. (d) The information required to be provided pursuant to this section shall be provided to an enrollee with individual coverage upon initial enrollment and annually thereafter upon renewal, and to enrollees and subscribers with group coverage upon initial enrollment and annually thereafter upon renewal. A health care service plan may include this information with other materials sent to the enrollee. The information shall also be provided in the following manner: (1) In a separate section of the evidence of coverage titled “Timely Access to Care.” (2) At least annually, in or with newsletters, outreach, or other materials that are routinely disseminated to the plan’s enrollees. (3) Commencing January 1, 2018, in a separate section of the provider directory published and maintained by the health care service plan pursuant to Section 1367.27. The separate section shall be titled “Timely Access to Care.” (4) On the internet website published and maintained by the health care service plan, in a manner that allows enrollees and prospective enrollees to easily locate the information. (e) (1) A health care service plan shall provide the information required by this section to contracting providers on no less than an annual basis. (2) A health care service plan shall also inform a contracting provider of all of the following: (A) Information about a health care service plan’s obligation under California law to provide or arrange for timely access to care. (B) How a contracting provider or enrollee can contact the health care service plan to obtain assistance if a patient is unable to obtain a timely referral to an appropriate provider. (C) The toll-free telephone number and internet website address for the Department of Managed Health Care where providers and enrollees can file a complaint if they are unable to obtain a timely referral to an appropriate provider. (3) A health care service plan may comply with this subdivision by including the information with an existing communication with a contracting provider. (f) This section shall apply to Medi-Cal managed care plan contracts entered into with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code. (Amended by Stats. 2022, Ch. 601, Sec. 2. (SB 225) Effective January 1, 2023.)
  192. 1367.035.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must submit network-adequacy data to the department, and some plans must submit separate data for different product lines.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.035. (a) As part of the reports submitted to the department pursuant to subdivision (f) of Section 1367.03 and regulations adopted pursuant to that section, a health care service plan shall submit to the department, in a manner specified by the department, data regarding network adequacy, including, but not limited to, the following: (1) Provider office location. (2) Area of specialty. (3) Hospitals where providers have admitting privileges, if any. (4) Providers with open practices. (5) The number of patients assigned to a primary care provider or, for providers who do not have assigned enrollees, information that demonstrates the capacity of primary care providers to be accessible and available to enrollees. (6) Grievances regarding network adequacy and timely access that the health care service plan received during the preceding calendar year. (b) A health care service plan that uses a network for its Medi-Cal managed care product line that is different from the network used for its other product lines shall submit the data required under subdivision (a) for its Medi-Cal managed care product line separately from the data submitted for its other product lines. (c) A health care service plan that uses a network for its individual market product line that is different from the network used for its small group market product line shall submit the data required under subdivision (a) for its individual market product line separate from the data submitted for its small group market product line. (d) The department shall review the data submitted pursuant to this section for compliance with this chapter. (e) In submitting data under this section, a health care service plan that provides services to Medi-Cal beneficiaries pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code shall provide the same data to the State Department of Health Care Services pursuant to Section 14456.3 of the Welfare and Institutions Code. (f) In developing the format and requirements for reports, data, or other information provided by plans pursuant to subdivision (a), the department shall not create duplicate reporting requirements, but, instead, shall take into consideration all existing relevant reports, data, or other information provided by plans to the department. This subdivision does not limit the authority of the department to request additional information from the plan as deemed necessary to carry out and complete any enforcement action initiated under this chapter. (g) If the department requests additional information or data to be reported pursuant to subdivision (a), which is different or in addition to the information required to be reported in paragraphs (1) to (6), inclusive, of subdivision (a), the department shall provide health care service plans notice of that change by November 1 of the year prior to the change. (h) A health care service plan may include in the provider contract provisions requiring compliance with the reporting requirements of Section 1367.03 and this section. (Amended by Stats. 2015, Ch. 303, Sec. 253. (AB 731) Effective January 1, 2016.)
  193. 1367.04.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    The department must adopt language-access regulations for health care service plans, and plans must provide translation and interpretation services for enrollees under the section’s rules.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.04. (a) Not later than January 1, 2006, the department shall develop and adopt regulations establishing standards and requirements to provide health care service plan enrollees with appropriate access to language assistance in obtaining health care services. (b) In developing the regulations, the department shall require every health care service plan and specialized health care service plan to assess the linguistic needs of the enrollee population, excluding Medi-Cal enrollees, and to provide for translation and interpretation for medical services, as indicated. A health care service plan that participates in the Healthy Families Program may assess the Healthy Families Program enrollee population separately from the remainder of its enrollee population for purposes of subparagraph (A) of paragraph (1). A health care service plan that chooses to separate its Healthy Families Program enrollment from the remainder of its enrollee population shall treat the Healthy Families Program population separately for purposes of determining whether subparagraph (A) of paragraph (1) is applicable, and shall also treat the Healthy Families Program population separately for purposes of applying the percentage and numerical thresholds in subparagraph (A) of paragraph (1). The regulations shall include the following: (1) Requirements for the translation of vital documents that include the following: (A) A requirement that all vital documents, as defined pursuant to subparagraph (B), be translated into an indicated language, as follows: (i) A health care service plan with an enrollment of 1,000,000 or more shall translate vital documents into the top two languages other than English as determined by the needs assessment as required by this subdivision and any additional languages when 0.75 percent or 15,000 of the enrollee population, whichever number is less, excluding Medi-Cal enrollment and treating Healthy Families Program enrollment separately indicates in the needs assessment as required by this subdivision a preference for written materials in that language. (ii) A health care service plan with an enrollment of 300,000 or more but less than 1,000,000 shall translate vital documents into the top one language other than English as determined by the needs assessment as required by this subdivision and any additional languages when 1 percent or 6,000 of the enrollee population, whichever number is less, excluding Medi-Cal enrollment and treating Healthy Families Program enrollment separately indicates in the needs assessment as required by this subdivision a preference for written materials in that language. (iii) A health care service plan with an enrollment of less than 300,000 shall translate vital documents into a language other than English when 3,000 or more or 5 percent of the enrollee population, whichever number is less, excluding Medi-Cal enrollment and treating Healthy Families Program enrollment separately indicates in the needs assessment as required by this subdivision a preference for written materials in that language. (B) Specification of vital documents produced by the plan that are required to be translated. The specification of vital documents shall not exceed that of the United States Department of Health and Human Services (HHS) Office for Civil Rights (OCR) Policy Guidance (65 Federal Register 52762 (August 30, 2000)), but shall include all of the following: (i) Applications. (ii) Consent forms. (iii) Letters containing important information regarding eligibility and participation criteria. (iv) Notices pertaining to the denial, reduction, modification, or termination of services and benefits, and the right to file a grievance or appeal. (v) Notices advising limited-English-proficient persons of the availability of free language assistance and other outreach materials that are provided to enrollees. (vi) Translated documents shall not include a health care service plan’s explanation of benefits or similar claim processing information that is sent to enrollees, unless the document requires a response by the enrollee. (C) (i) For those documents described in subparagraph (B) that are not standardized but contain enrollee specific information, health care service plans shall not be required to translate the documents into the threshold languages identified by the needs assessment as required by this subdivision, but rather shall include with the documents a written notice of the availability of interpretation services in the threshold languages identified by the needs assessment as required by this subdivision. A health care service plan subject to the requirements in Section 1367.042 shall also include with the documents a written notice of the availability of interpretation services in the top 15 languages spoken by limited-English-proficient (LEP) individuals in California as determined by the State Department of Health Care Services. (ii) Upon request, the enrollee shall receive a written translation of the documents described in clause (i). The health care service plan shall have up to, but not to exceed, 21 days to comply with the enrollee’s request for a written translation. If an enrollee requests a translated document, all timeframes and deadline requirements related to the document that apply to the health care service plan and enrollees under the provisions of this chapter and under any regulations adopted pursuant to this chapter shall begin to run upon the health care service plan’s issuance of the translated document. (iii) For grievances that require expedited plan review and response in accordance with subdivision (b) of Section 1368.01, the health care service plan may satisfy this requirement by providing notice of the availability and access to oral interpretation services. (D) A requirement that health care service plans advise limited-English-proficient enrollees of the availability of interpreter services. (2) Standards to ensure the quality and accuracy of the written translations and that a translated document meets the same standards required for the English language version of the document. The English language documents shall determine the rights and obligations of the parties, and the translated documents shall be admissible in evidence only if there is a dispute regarding a substantial difference in the material terms and conditions of the English language document and the translated document. (3) Requirements for surveying the language preferences and needs assessments of health care service plan enrollees within one year of the effective date of the regulations that permit health care service plans to utilize various survey methods, including, but not limited to, the use of existing enrollment and renewal processes, subscriber newsletters, or other mailings. Health care service plans shall update the needs assessment, demographic profile, and language translation requirements every three years. (4) Requirements for individual enrollee access to interpretation services that include the following: (A) A requirement that an interpreter meets, at a minimum, all of the following qualifications: (i) Demonstrated proficiency in both English and the target language. (ii) Knowledge in both English and the target language of health care terminology and concepts relevant to health care delivery systems. (iii) Adheres to generally accepted interpreter ethics principles, including client confidentiality. (B) A requirement that the enrollee with limited English proficiency shall not be required to provide their own interpreter or rely on a staff member who does not meet the qualifications described in subparagraph (A) to communicate directly with the limited-English-proficient enrollee. (C) A requirement that the enrollee with limited English proficiency shall not be required to rely on an adult or minor child accompanying the enrollee to interpret or facilitate communication except under either of the following circumstances: (i) In an emergency, as described in Section 1317.1, if a qualified interpreter is not immediately available for the enrollee with limited English proficiency. (ii) If the individual with limited English proficiency specifically requests that the accompanying adult interpret or facilitate communication, the accompanying adult agrees to provide that assistance, and reliance on that accompanying adult for that assistance is appropriate under the circumstances. (5) Standards to ensure the quality and timeliness of oral interpretation services provided by health care service plans. (c) In developing the regulations, standards, and requirements, the department shall consider the following: (1) Publications and standards issued by federal agencies, such as the Culturally and Linguistically Appropriate Services (CLAS) in Health Care issued by the United States Department of Health and Human Services Office of Minority Health in December 2000, and the United States Department of Health and Human Services (HHS) Office for Civil Rights (OCR) Policy Guidance (65 Federal Register 52762 (August 30, 2000)). (2) Other cultural and linguistic requirements under state programs, such as Medi-Cal Managed Care Policy Letters, cultural and linguistic requirements imposed by the State Department of Health Care Services on health care service plans that contract to provide Medi-Cal managed care services, and cultural and linguistic requirements imposed by the Managed Risk Medical Insurance Board on health care service plans that contract to provide services in the Healthy Families Program. (3) Standards adopted by other states pertaining to language assistance requirements for health care service plans. (4) Standards established by California or nationally recognized accrediting, certifying, or licensing organizations and medical and health care interpreter professional associations regarding interpretation services. (5) Publications, guidelines, reports, and recommendations issued by state agencies or advisory committees, such as the report to the Legislature from the Task Force on Culturally and Linguistically Competent Physicians and Dentists established by former Section 852 of the Business and Professions Code. (6) Examples of best practices relating to language assistance services by health care providers and health care service plans, including existing practices. (7) Information gathered from complaints to the HMO Helpline and consumer assistance centers regarding language assistance services. (8) The cost of compliance and the availability of translation and interpretation services and professionals. (9) Flexibility to accommodate variations in plan networks and method of service delivery. The department shall allow for health care service plan flexibility in determining compliance with the standards for oral and written interpretation services. (d) The department shall work to ensure that the biennial reports required by this section, and the data collected for those reports, are consistent with reports required by government-sponsored programs and do not require duplicative or conflicting data collection or reporting. (e) The department shall seek public input from a wide range of interested parties through advisory bodies established by the director. (f) A contract between a health care service plan and a health care provider shall require compliance with the standards developed under this section. In furtherance of this section, the contract shall require providers to cooperate with the plan by providing any information necessary to assess compliance. (g) The department shall report biennially to the Legislature and advisory bodies established by the director regarding plan compliance with the standards, including results of compliance audits made in conjunction with other audits and reviews. The reported information shall also be included in the publication required under subparagraph (B) of paragraph (1) of subdivision (b) of Section 136000. The department shall also utilize the reported information to make recommendations for changes that further enhance standards pursuant to this section. The department may also delay or otherwise phase-in implementation of standards and requirements in recognition of costs and availability of translation and interpretation services and professionals. (h) (1) Except for contracts with the State Department of Health Care Services Medi-Cal program, the standards developed under this section shall be considered the minimum required for compliance. (2) The regulations shall provide that a health plan is in compliance if the plan is required to meet the same or similar standards by the Medi-Cal program, either by contract or state law, if the standards provide as much access to cultural and linguistic services as the standards established by this section for an equal or higher number of enrollees and therefore meet or exceed the standards of the regulations established pursuant to this section, and the department determines that the health care service plan is in compliance with the standards required by the Medi-Cal program. To meet this requirement, the department shall not be required to perform individual audits. The department shall, to the extent feasible, rely on audits, reports, or other oversight and enforcement methods used by the State Department of Health Care Services. (3) The determination pursuant to paragraph (2) shall only apply to the enrollees covered by the Medi-Cal program standards. A health care service plan subject to paragraph (2) shall comply with the standards established by this section with regard to enrollees not covered by the Medi-Cal program. (i) This section does not prohibit a government purchaser from including in their contracts additional translation or interpretation requirements, to meet linguistic or cultural needs, beyond those set forth pursuant to this section. (Amended by Stats. 2026, Ch. 27, Sec. 12. (SB 164) Effective June 29, 2026.)
  194. 1367.041.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    A health care service plan that markets in certain non-English contexts must provide specified documents in that same language and use a trained, qualified translator for written translations.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.041. (a) A health care service plan that advertises or markets products in the individual or small group health care service plan markets, or allows any other person or business to market or advertise on its behalf in the individual or small group health care service plan markets, in a non-English language that does not meet the requirements set forth in Sections 1367.04 and 1367.07, shall provide the following documents in the same non-English language: (1) Welcome letters or notices of initial coverage, if provided. (2) Applications for enrollment and any information pertinent to eligibility or participation. (3) Notices advising limited-English-proficient persons of the availability of no-cost translation and interpretation services. (4) Notices pertaining to the right and instructions on how an enrollee may file a grievance. (5) The uniform summary of benefits and coverage required pursuant to subparagraph (A) of paragraph (3) of subdivision (c) of Section 1363. (b) A health care service plan shall use a trained and qualified translator for all written translations of marketing and advertising materials relating to health care service plan products, and for all of the documents specified in subdivision (a). (c) This section shall not apply to a specialized health care service plan that does not offer an essential health benefit as defined in Section 1367.005. (Amended by Stats. 2023, Ch. 42, Sec. 15. (AB 118) Effective July 10, 2023.)
  195. 1367.042.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must notify enrollees and the public about language help, auxiliary aids, nondiscrimination, and grievance/complaint procedures, and must provide the information at enrollment, renewal, in coverage materials, newsletters, and on the plan website.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.042. (a) A health care service plan shall notify enrollees and members of the public of all of the following information: (1) The availability of language assistance services, including oral interpretation and translated written materials, free of charge and in a timely manner pursuant to Section 1367.04, and how to access these services. This information shall be available in the top 15 languages spoken by limited-English-proficient individuals in California as determined by the State Department of Health Care Services. (2) The availability of appropriate auxiliary aids and services, including qualified interpreters for individuals with disabilities and information in alternate formats, free of charge and in a timely manner, when those aids and services are necessary to ensure an equal opportunity to participate for individuals with disabilities. (3) The health plan does not discriminate on the basis of race, color, national origin, ancestry, religion, sex, marital status, gender, gender identity, sexual orientation, age, or disability. (4) The availability of the grievance procedure described in Section 1368, how to file a grievance, including the name of the plan representative and the telephone number, address, and email address of the plan representative who may be contacted about the grievance, and how to submit the grievance to the department for review after completing the grievance process or participating in the process for at least 30 days. (5) How to file a discrimination complaint with the United States Department of Health and Human Services Office for Civil Rights if there is a concern of discrimination based on race, color, national origin, age, disability, or sex. (b) The information required to be provided pursuant to this section shall be provided to an enrollee with individual coverage upon initial enrollment and annually thereafter upon renewal, and to enrollees and subscribers with group coverage upon initial enrollment and annually thereafter upon renewal. A health care service plan may include this information with other materials sent to the enrollee. The information shall also be provided in the following manner: (1) In a conspicuously visible location in the evidence of coverage. (2) At least annually, in or with newsletters, outreach, or other materials that are routinely disseminated to the plan’s enrollees. (3) On the Internet Web site published and maintained by the health care service plan, in a manner that allows enrollees, prospective enrollees, and members of the public to easily locate the information. (c) (1) A specialized health care plan that is not a covered entity, as defined in Section 92.4 of Title 45 of the Code of Federal Regulations, subject to Section 1557 of the federal Patient Protection and Affordable Care Act (42 U.S.C. Sec. 18116) may request an exemption from the requirements under this section. (2) The department shall not grant an exemption under this subdivision to a specialized health care service plan that arranges for mental health benefits, except for employee assistance program plans. (3) The department shall provide information on its Internet Web site about any exemptions granted under this subdivision. (d) This section does not apply to Medi-Cal managed care plan contracts entered into with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code. (Amended by Stats. 2018, Ch. 92, Sec. 132. (SB 1289) Effective January 1, 2019.)
  196. 1367.043.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must make certain staff complete evidence-based cultural competency training for trans-inclusive care, and the department and director have related guidance, review, reporting, approval, and enforcement duties.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.043. (a) (1) Within six months after the department issues guidance pursuant to paragraph (1) of subdivision (e), and no later than March 1, 2025, a health care service plan that issues, sells, renews, or offers health care service plan contracts for health care coverage in this state, including a grandfathered health plan, but not including specialized health care service plan contracts that provide only dental or vision services, shall require all of its health care service plan staff who are in direct contact with enrollees in the delivery of care or enrollee services to complete evidence-based cultural competency training for the purpose of providing trans-inclusive health care for individuals who identify as transgender, gender diverse, or intersex (TGI). (2) An evidence-based cultural competency training implemented pursuant to paragraph (1) shall include all of the following: (A) Information about the effects, including, but not limited to, ongoing personal effects, of historical and contemporary exclusion and oppression of TGI communities. (B) Information about communicating more effectively across gender identities, including TGI-inclusive terminology, using people’s correct names and pronouns, even when they are not reflected in records or legal documents; avoiding language, whether verbal or nonverbal, that demeans, ridicules, or condemns TGI individuals; and avoiding making assumptions about gender identity by using gender-neutral language and avoiding language that presumes all individuals are heterosexual, cisgender or gender conforming, or nonintersex. (C) Discussion on health inequities within the TGI community, including family and community acceptance. (D) Perspectives of diverse, local constituency groups and TGI-serving organizations, including, but not limited to, the California Transgender Advisory Council. (E) Recognition of the difference between personal values and professional responsibilities with regard to serving TGI people. (F) Facilitation by TGI-serving organizations. (3) Use of any training curricula for purposes of implementing paragraph (1) shall be subject to approval by the department, following stakeholder engagement with local constituency groups and TGI-serving organizations, including, but not limited to, the California Transgender Advisory Council. (4) After first-time completion of the evidence-based cultural competency training, in the form of initial basic training, an individual described in paragraph (1) shall complete a refresher course if a complaint has been filed with the health care service plan or the department pursuant to Section 1368, and a decision has been made in favor of the complainant, against that individual for not providing trans-inclusive health care, or on a more frequent basis if deemed necessary by the health care service plan or the department for purposes of providing trans-inclusive health care. (b) The director shall review individual case complaints received by the department pursuant to Section 1368, alleging discrimination on the basis of gender identity and refer those complaints to the Civil Rights Department. For improper denials, delays, or modifications of trans-inclusive care, the department shall review the complaints received by the department to determine whether any enforcement actions, including sanctions pursuant to Article 7 (commencing with Section 1386) or Article 8 (commencing with Section 1390), may be appropriate. (c) The department shall track and monitor complaints received by the department, pursuant to Section 1368, related to trans-inclusive health care and publicly report this data with other complaint data in its annual report, on its website, or with other public reports containing complaint data. (d) For purposes of this section, the following definitions apply: (1) “TGI” means transgender, gender diverse or intersex. (2) “TGI-serving organization” has the same meaning as set forth in paragraph (2) of subdivision (f) of Section 150900. (3) “Trans-inclusive health care” means comprehensive health care that is consistent with the standards of care for individuals who identify as TGI, honors an individual’s personal bodily autonomy, does not make assumptions about an individual’s gender, accepts gender fluidity and nontraditional gender presentation, and treats everyone with compassion, understanding, and respect. (e) (1) Within six months of development of the quality standard and recommendations for curriculum pursuant to Section 150950 and no later than September 1, 2024, the department shall develop guidance and procedures for compliance with this section. In developing guidance pursuant to this subdivision, the department shall consider the recommendations made by the working group pursuant to Section 150950. (2) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, shall implement, interpret, or make specific this section by means of plan letters, procedures, or similar instructions, until regulations are adopted. (3) The department shall adopt regulations for purposes of this section by July 1, 2027, in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The department shall provide a status report to the Legislature on a semiannual basis, in compliance with Section 9795 of the Government Code, until regulations are adopted. In developing the regulations, the department shall consider the recommendations made by the working group pursuant to Section 150950. (f) If a health care service plan delegates duties under this section to a contracted entity, including, but not limited to, a medical group or independent practice association, then the delegated entity shall comply with this section. (g) The director may take enforcement action including, but not limited to, imposing penalties, pursuant to Article 7 (commencing with Section 1386) or Article 8 (commencing with Section 1390), for noncompliance with the requirements of this section or regulations promulgated thereunder. (Added by Stats. 2022, Ch. 822, Sec. 2. (SB 923) Effective January 1, 2023.)
  197. 1367.045.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    A health care service plan contract cannot reserve discretionary authority to the plan or its agent in ways that affect benefit eligibility, contract interpretation, or review standards; such a provision is void and unenforceable.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.045. (a) If a health care service plan contract offered, issued, delivered, amended, or renewed on or after January 1, 2021, contains a provision that reserves discretionary authority to the plan, or an agent of the plan, to determine eligibility for benefits or coverage, to interpret the terms of the contract, or to provide standards of interpretation or review that are inconsistent with the laws of this state, that provision is void and unenforceable. (b) For purposes of this section, the term “discretionary authority” means a contract provision that has the effect of conferring discretion on a health care service plan or other claims administrator to determine entitlement to benefits or interpret contract language that, in turn, could lead to a deferential standard of review by a reviewing court. (c) This section does not prohibit a health care service plan from including a provision in a contract that informs an enrollee that, as part of its routine operations, the plan applies the terms of its contracts for making decisions, including making determinations regarding eligibility, receipt of benefits and claims, or explaining policies, procedures, and processes, so long as the provision could not give rise to a deferential standard of review by a reviewing court. (d) This section applies to both group and individual health care service plan contracts. (Added by Stats. 2020, Ch. 151, Sec. 2. (SB 855) Effective January 1, 2021.)
  198. 1367.05.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    A health care service plan may contract with an approved dental college for dental care, but if it does, it must tell enrollees that the care will be provided by students, clinicians, or instructors.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.05. (a) Nothing in this chapter shall prohibit a health care service plan from entering into a contract with a dental college approved by the Board of Dental Examiners of California under which the dental college provides for or arranges for the provision of dental care to enrollees of the plan through the practice of dentistry by either of the following: (1) Bona fide students of dentistry or dental hygiene operating under subdivision (b) of Section 1626 of the Business and Professions Code. (2) Bona fide clinicians or instructors operating under subdivision (c) of Section 1626 of the Business and Professions Code. (b) A plan that contracts with a dental college for the delivery of dental care pursuant to subdivision (a) shall disclose to enrollees in the disclosure form and the evidence of coverage, or the combined evidence of coverage and disclosure form, and, if the plan provides a listing of providers to the enrollees, in the listing of providers, that the dental care provided by the dental college will be provided by students of dentistry or dental hygiene and clinicians or instructors of the dental college. (Added by Stats. 1996, Ch. 492, Sec. 7. Effective January 1, 1997.)
  199. 1367.06.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    Health care service plans must cover certain pediatric asthma equipment and related education, use the same general terms as other benefits, disclose the benefit, and not cut coverage because of this section.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.06. (a) A health care service plan contract, except a specialized health care service plan contract, that is issued, amended, delivered, or renewed on or after January 1, 2005, that covers outpatient prescription drug benefits shall include coverage for inhaler spacers when medically necessary for the management and treatment of pediatric asthma. (b) If a subscriber has coverage for outpatient prescription drugs, a health care service plan contract, except a specialized health care service plan contract, that is issued, amended, delivered, or renewed on or after January 1, 2005, shall include coverage for the following equipment and supplies when medically necessary for the management and treatment of pediatric asthma: (1) Nebulizers, including face masks and tubing. (2) Peak flow meters. (c) The quantity of the equipment and supplies required to be covered pursuant to subdivisions (a) and (b) may be limited by the health care service plan if the limitations do not inhibit appropriate compliance with treatment as prescribed by the enrollee’s physician and surgeon. A health care service plan shall provide for an expeditious process for approving additional or replacement inhaler spacers, nebulizers, and peak flow meters when medically necessary for an enrollee to maintain compliance with his or her treatment regimen. The process required by Section 1367.24 may be used to satisfy the requirements of this section for an inhaler spacer. (d) Education for pediatric asthma, including education to enable an enrollee to properly use the device identified in subdivisions (a) and (b), shall be consistent with current professional medical practice. (e) The coverage required by this section shall be provided under the same general terms and conditions, including copayments and deductibles, applicable to all other benefits provided by the plan. (f) A health care service plan shall disclose the benefits under this section in its evidence of coverage and disclosure forms. (g) A health care service plan may not reduce or eliminate coverage as a result of the requirements of this section. (h) Nothing in this section shall be construed to deny or restrict in any way the department’s authority to ensure plan compliance with this chapter, if a plan provides coverage for prescription drugs. (Added by Stats. 2004, Ch. 711, Sec. 1. Effective January 1, 2005.)
  200. 1367.07.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. )

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    A health care service plan must report internal policies and procedures related to cultural appropriateness to the department within one year after a Section 1367.04 assessment, using the department’s required format.

    ## Health and Safety Code - HSC ## DIVISION 2. LICENSING PROVISIONS [1200 - 1796.88] ( Division 2 enacted by Stats. 1939, Ch. 60. ) ## CHAPTER 2.2. Health Care Service Plans [1340 - 1399.874] ( Chapter 2.2 added by Stats. 1975, Ch. 941. ) ## ARTICLE 5. Standards [1367 - 1374.198] ( Article 5 added by Stats. 1975, Ch. 941. ) ## 1367.07. Within one year after a health care service plan’s assessment pursuant to subdivision (b) of Section 1367.04, the health care service plan shall report to the department, in a format specified by the department, regarding internal policies and procedures related to cultural appropriateness in each of the following contexts: (a) Collection of data regarding the enrollee population pursuant to the health care service plan’s assessment conducted in accordance with subdivision (b) of Section 1367.04. (b) Education of health care service plan staff who have routine contact with enrollees regarding the diverse needs of the enrollee population. (c) Recruitment and retention efforts that encourage workforce diversity. (d) Evaluation of the health care service plan’s programs and services with respect to the plan’s enrollee population, using processes such as an analysis of complaints and satisfaction survey results. (e) The periodic provision of information regarding the ethnic diversity of the plan’s enrollee population and any related strategies to plan providers. Plans may use existing means of communication. (f) The periodic provision of educational information to plan enrollees on the plan’s services and programs. Plans may use existing means of communication. (Amended by Stats. 2008, Ch. 179, Sec. 139. Effective January 1, 2009.)

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