Insurance Code — Part 7 | INS — United States — California law | Esheria

Insurance Code

Part 7 of 23 · provisions 1,201–1,400

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About this statute

This section defines “underwriters’ corps” for this chapter. This chapter must not impair or interfere with the powers or duties of a municipality’s regular fire department. An owner of property cannot treat an underwriters’ corps act as a justification for abandoning the property. Certain domestic insurance-underwriter corporations may maintain an underwriter’s corps at their own expense if they meet the stated fire-prevention and local-business conditions. An underwriter’s corps may enter certain burning or fire-exposed buildings and may remove or protect property from fire or water damage while a fire is happening and immediately after.

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Provisions of Insurance Code

Showing 200 of 4,461

  1. 10743.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    The board may bar employers or employees who drop coverage after joining the pool from reenrolling for up to 12 months.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10743. The board may prohibit employers or employees who drop coverage after enrolling in the pool from reenrolling in the program for up to 12 months. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  2. 10744.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    The board must arrange payment to contractors according to program contracts.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10744. The board shall arrange to pay contractors as specified in program contracts. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  3. 10745.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    The board must pay participating carriers their contracted rates.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10745. The board shall pay participating carriers their contracted rates. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  4. 10746.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    Participating carriers must offer rates to small employers or program enrollees that are at least consistent with the program regulations and existing health-insurance statutes and regulations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10746. Participating carriers shall offer rates to small employers or enrollees in the program that, at a minimum, are consistent with the program regulations and existing statutes and regulations regulating health insurance offerings to small employers. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  5. 10747.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    The board may adjust carrier payments when it finds a carrier has a significantly disproportionate share of high- or low-risk enrollees.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10747. The board may adjust payments made to a carrier if the board finds that the carrier has a significantly disproportionate share of high- or low-risk enrollees. Prior to making this finding, the program shall obtain valid data from participating carriers. Reporting requirements shall be administratively compatible with the methods of operation of the carrier. Any adjustments to payments shall be prospective and shall utilize demographic and other factors which are actuarially related to risk. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  6. 10748.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    If a small employer, employee, or dependent is dissatisfied with an action or failure to act about eligibility or enrollment, the employer or employee may appeal to the board and must be given a fair hearing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10748. If a small employer, employee, or dependent of a small employer is dissatisfied with any action or failure to act which has occurred in connection with eligibility for, or enrollment in the program, the employer or employee shall have the right to appeal to the board and shall be accorded an opportunity for a fair hearing. Hearings shall be conducted, insofar as practicable, pursuant to the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  7. 10748.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    The board must issue and, if needed, reissue a request for proposals, assess bids, select a qualified nonprofit entity, and manage the transition of program responsibility.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10748.5. No later than three years from the effective date of this article, the board shall issue a request for proposals that solicits nonprofit entities to submit bids to assume administrative and fiscal responsibility for operation of the program on a regional basis. The geographic boundaries of the regions shall be designated by the board. The board shall assess bidder’s qualifications in the areas of administrative capacity, financial responsibility, local experience, and demonstrated ability. Within six months of issuing the request for proposals, the board shall select from among the qualified bidders and award administrative and financial responsibility for the program to the selected regional nonprofit entities. If no qualified nonprofit entity submits a bid pursuant to the board’s request for proposals, one year from the date that bids were due the board shall reissue a request for proposals if the board has reason to believe that there is a possibility for a response from a qualified nonprofit entity. The board shall provide for an orderly transition of administrative and financial responsibility for the program. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  8. 10748.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    The board must review nonprofit proposals about taking over program administration and finances, and it may hand over that responsibility if it finds a qualified entity. Related contracts are exempt from competitive bidding and Department of General Services review or approval.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10748.6. The board shall accept and review proposals submitted from nonprofit entities for assumption of administrative and financial responsibility of the program at any time prior to the process described in Section 10748.5. If the board determines that a qualified entity exists, the board may relinquish administrative and financial responsibility for the program to the nonprofit entity. Any contract entered into pursuant to this section shall be exempt from any provision of law relating to competitive bidding and shall be exempt from the review or approval of any division of the Department of General Services. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  9. 10748.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    The board must appoint a five-member small employer advisory panel in the program.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10748.7. There is in the program a five-member small employer advisory panel to be appointed by the board to provide consultation to the board on program design and implementation. The composition of the panel shall reflect varying sizes of small employers and a variety of occupational categories. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  10. 10749.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    A special fund is created for this article, and its money is continuously appropriated to the board for the purposes stated in the part.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10749. There is created a Voluntary Alliance Uniting Employers Fund which shall consist of moneys collected pursuant to this article and any funds loaned by the board for operating expenses. Moneys in the fund shall be continuously appropriated without regard to fiscal year, to the board for the purposes specified in this part. Costs of the Voluntary Alliance for Uniting Employers Purchasing Program shall not be paid with state funds other than funds loaned by the board for operating expenses. Moneys within the fund shall be utilized for the purposes of this article. (Added by Stats. 1992, Ch. 1128, Sec. 10. Effective January 1, 1993. Operative July 1, 1993, by Sec. 15 of Ch. 1128.)
  11. 10750.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. )

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    This chapter does not apply to certain health benefit plans covered by Chapter 8.01 or Chapter 8.02, except as those chapters provide otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 4. Purchasing Pool for Small Employers [10730 - 10750] ( Article 4 added by Stats. 1992, Ch. 1128, Sec. 10. ) ## 10750. This chapter shall not apply to a health benefit plan that is subject to Chapter 8.01 (commencing with Section 10753) or Chapter 8.02 (commencing with Section 10755), except as otherwise provided in those chapters. (Added by Stats. 2012, Ch. 852, Sec. 13. (AB 1083) Effective January 1, 2013.)
  12. 10752.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

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    This section defines terms used in the stop-loss insurance article.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752. As used in this article, the following definitions shall apply: (a) “Attachment point” means the amount of health claims incurred by a small employer in a policy year for its employees and their dependents, and covered by a stop-loss insurance policy, above which the stop-loss insurer incurs a liability for payment. (1) “Individual attachment point” means the amount of health claims incurred by a small employer in a policy year for an individual employee or dependent of an employee, and covered by a stop-loss insurance policy, above which the stop-loss insurer incurs a liability for payment, under individual stop-loss coverage. For purposes of this article, “specific attachment point” has the same meaning as “individual attachment point.” (2) “Aggregate attachment point” means the total amount of health claims incurred by a small employer in a policy year for all covered employees and their dependents, and covered by a stop-loss insurance policy, above which the stop-loss insurer incurs a liability for payment under aggregate stop-loss coverage. (b) “Dependent” means the spouse, registered domestic partner as described in Section 297 of the Family Code, or child of an employee. (c) “Direct coverage” means that an insurance company assumes a direct obligation to an employee under an insurance policy to pay or indemnify the employee for health claims incurred by the employee or the employee’s dependents. (d) “Expected claims” means, for the purposes of aggregate stop-loss coverage, the total amount of health claims that is projected to be incurred by a small employer for its employees and their dependents in a policy year. (e) “Policy year” means the 12-month period that is designated as the policy year or policy period for the stop-loss insurance policy. If the stop-loss insurance policy does not designate a policy year, the policy year is the year in which the total amount of health claims incurred by a small employer for an individual employee or dependent of an employee, or the aggregate amount for all covered employees and their dependents, are added together for the purposes of determining whether the claims have exceeded the attachment point. (f) “Small employer” has the same meaning as defined in subdivision (q) of Section 10753. (g) “Stop-loss insurer” means an insurance company providing individual or aggregate stop-loss insurance coverage, or both, or any other assumption of risk, to a small employer for the health claims it incurs for its employees and their dependents. (h) “Stop-loss insurance policy” means a policy, contract, certificate, or statement of coverage between a stop-loss insurer and small employer providing individual or aggregate stop-loss insurance coverage, or both, or any other assumption of risk, to a small employer for the liability the small employer incurs related to the covered health claims of its employees and their dependents. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  13. 10752.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

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    A stop-loss insurer may not exclude an employee or dependent because of an actual or expected health status-related factor.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.1. A stop-loss insurer shall not exclude any employee or dependent on the basis of an actual or expected health status-related factor. Health status-related factors include, but are not limited to, any of the following: health status; medical condition, including both physical and mental illnesses; claims experience; medical history; receipt of health care; genetic information; disability; evidence of insurability, including conditions arising out of acts of domestic violence of the employee or dependent; or any other health status-related factor as determined by the department. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  14. 10752.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

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    A stop-loss insurer must renew covered small-employer stop-loss policies at the small employer’s option, with listed exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.2. A stop-loss insurer shall renew, at the option of the small employer, all stop-loss insurance policies written, issued, administered, or renewed on or after January 1, 2014, and all small employer stop-loss insurance policies in force on or after January 1, 2014, except as follows: (a) (1) For nonpayment of the required premiums by the small employer, if the small employer has been duly notified and billed for the charge and at least a 30-day grace period has elapsed since the date of notification. (2) A stop-loss insurer shall continue to provide coverage as required by the small employer’s policy during the grace period described in paragraph (1). Nothing in this section shall be construed to affect or impair the small employer’s or the stop-loss insurer’s other rights and responsibilities pursuant to the policy. (b) Where the stop-loss insurer demonstrates fraud or an intentional misrepresentation of material fact by the small employer under the terms of the stop-loss insurance policy. (c) Where the stop-loss insurer has been determined by the commissioner to be financially impaired. (d) Where the stop-loss insurer ceases to write, issue, or administer new stop-loss insurance policies in this state; provided, however, that the following conditions are satisfied: (1) Notice of the decision to cease writing, issuing, or administering new or existing stop-loss insurance policies in this state is provided to the commissioner, and to the small employer, at least 180 days prior to the discontinuation of the coverage. (2) Stop-loss insurance policies subject to this article shall not be canceled until 180 days after the date of the notice required under paragraph (1). During that time, the stop-loss insurer shall continue to comply with this article. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  15. 10752.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    A stop-loss insurance policy for a small employer may not include certain low attachment-point provisions if issued, reissued, or renewed between January 1, 2014 and January 1, 2016.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.3. A stop-loss insurance policy issued, reissued, or renewed on or after January 1, 2014, and prior to January 1, 2016, to a small employer shall not contain any of the following provisions: (a) An individual attachment point for a policy year that is less than thirty-five thousand dollars ($35,000). (b) An aggregate attachment point for a policy year that is less than the greater of one of the following: (1) Five thousand dollars ($5,000) times the total number of group members. (2) One hundred twenty percent of expected claims. (3) Thirty-five thousand dollars ($35,000). (c) A provision for direct coverage of an employee or dependent of an employee. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  16. 10752.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    Stop-loss insurance policies for small employers issued, reissued, or renewed on or after January 1, 2016, cannot include certain low attachment points or direct coverage provisions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.4. A stop-loss insurance policy issued, reissued, or renewed on or after January 1, 2016, to a small employer shall not contain any of the following provisions: (a) An individual attachment point for a policy year that is less than forty thousand dollars ($40,000). (b) An aggregate attachment point for a policy year that is less than the greater of one of the following: (1) Five thousand dollars ($5,000) times the total number of group members. (2) One hundred twenty percent of expected claims. (3) Forty thousand dollars ($40,000). (c) A provision for direct coverage of an employee or dependent of an employee. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  17. 10752.43.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    Older stop-loss policies for small employers are exempt from Sections 10752.3 and 10752.4, and those policies may be renewed, reissued, or replaced to keep coverage continuous if the attachment points are not lowered.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.43. Sections 10752.3 and 10752.4 do not apply to a stop-loss insurance policy provided to a small employer that was in effect prior to September 1, 2013. A stop-loss insurance policy that was in effect prior to September 1, 2013, may be renewed or reissued, or a stop-loss insurance policy may be issued by another stop-loss insurer to maintain continuity of stop-loss coverage for a small employer who had a stop-loss insurance policy in effect prior to September 1, 2013, provided that a stop-loss policy issued to maintain continuity of coverage shall have attachment points that are the same as or higher than the attachment points that were in place in the policy held by the small employer prior to September 1, 2013. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  18. 10752.46.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    A stop-loss insurer must file an annual report with the Department of Insurance on April 1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.46. On April 1, 2014, and on April 1 annually thereafter, a stop-loss insurer shall report to the Department of Insurance the number of small employer stop-loss policies it had issued and in effect as of December 31 of the previous year. The information shall include new policies issued and policies reissued or renewed in the previous year for groups that have 1 to 50 employees and 51 to 100 employees. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  19. 10752.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    The commissioner may adopt regulations needed to carry out this article and must follow Chapter 3.5 of the Government Code when doing so.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.5. The commissioner may adopt regulations as may be necessary to carry out the purposes of this article. In adopting regulations, the commissioner shall comply with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  20. 10752.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    A stop-loss insurer that violates this article can be subject to the remedies and administrative penalties that apply to insurers under Sections 10718 and 10718.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.6. A stop-loss insurer that violates the provisions of this article is subject to the remedies and administrative penalties applicable to insurers in Sections 10718 and 10718.5. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  21. 10752.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    This section says the article does not affect certain multiple employer welfare arrangements that meet the listed conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.7. Nothing in this article shall affect the ongoing operations of multiple employer welfare arrangements regulated pursuant to Article 4.7 (commencing with Section 742.20) of Chapter 1 of Part 2 of Division 1 that provide health care benefits to their members on a self-funded or partially self-funded basis and that comply with small group health reforms. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  22. 10752.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. )

    Verify source ↗

    The article is severable: if one provision or its application is invalid, the rest can still remain effective if they can operate without it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8. Small Employer Health Insurance [10700 - 10752.8] ( Heading of Chapter 8 renumbered from Chapter 14 (as added by Stats. 1992, Ch. 1128) by Stats. 1993, Ch. 113, Sec. 6. ) ## ARTICLE 5. Stop-Loss Insurance [10752 - 10752.8] ( Article 5 added by Stats. 2013, Ch. 443, Sec. 1. ) ## 10752.8. The provisions of this article are severable. If any provision of this article or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. (Added by Stats. 2013, Ch. 443, Sec. 1. (SB 161) Effective January 1, 2014.)
  23. 10753.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 1. Definitions [10753 - 10753.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 14. )

    Verify source ↗

    This section defines key terms used in the small employer health insurance chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 1. Definitions [10753 - 10753.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753. (a) “Agent or broker” means a person or entity licensed under Chapter 5 (commencing with Section 1621) of Part 2 of Division 1. (b) “Benefit plan design” means a specific health coverage product issued by a carrier to small employers, to trustees of associations that include small employers, or to individuals if the coverage is offered through employment or sponsored by an employer. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health care services which has significant incentives for the covered individuals to use the system. (c) “Carrier” means a health insurer or any other entity that writes, issues, or administers health benefit plans that cover the employees of small employers, regardless of the situs of the contract or master policyholder. (d) “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. (e) “Dependent” means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health benefit plan 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 (s). (f) “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, in the small employer’s regular place 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. A permanent employee who works at least 20 hours but not more than 29 hours is an eligible employee if all four of the following apply: (A) The employee otherwise meets the definition of an eligible employee except for the number of hours worked. (B) The employer offers the employee 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 insurer 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 (s). (g) “Enrollee” means an eligible employee or dependent who receives health coverage through the program from a participating carrier. (h) “Exchange” means the California Health Benefit Exchange created by Section 100500 of the Government Code. (i) “Financially impaired” means, for the purposes of this chapter, a carrier that, on or after the effective date of this chapter, is not insolvent and is either: (1) Deemed by the commissioner to be potentially unable to fulfill its contractual obligations. (2) Placed under an order of rehabilitation or conservation by a court of competent jurisdiction. (j) “Health benefit plan” means a policy of health insurance, as defined in Section 106, 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, or coverage that provides excepted benefits, as described in Sections 2722 and 2791 of the federal Public Health Service Act, subject to Section 10701. (k) “In force business” means an existing health benefit plan issued by the carrier to a small employer. (l) “Late enrollee” means an eligible employee or dependent who has declined health coverage under 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 10753.05 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 10753.05. 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 health benefit plan consistent with the periods provided pursuant to Section 10753.05 and who subsequently requests enrollment in the plan, except where the employee or dependent qualifies for a special enrollment period provided pursuant to Section 10753.05. (m) “New business” means a health benefit plan issued to a small employer that is not the carrier’s in force business. (n) “Preexisting condition provision” means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insured’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. (o) “Creditable coverage” means: (1) Any individual or group policy, contract, or program, that is written or administered by a health 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 federal 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 subdivision (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)). (p) “Rating period” means the period for which premium rates established by a carrier are in effect and shall be no less than 12 months from the date of issuance or renewal of the health benefit plan. (q) (1) “Small employer” means either 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 benefit plans, 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 benefit plans, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a carrier 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 benefit plan to a small employer pursuant to this chapter, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this chapter, provisions of this chapter 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, but does not include multiple employer welfare arrangements regulated pursuant to Article 4.7 (commencing with Section 742.20) of Chapter 1 of Part 2 of Division 1 that provide health care benefits to their members on a self-funded or partially self-funded basis and that comply with small group health reforms. (B) Any guaranteed association, as defined in subdivision (r), 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. (r) “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 which (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (q), (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 by 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 been offering health insurance to its members 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 benefit plan design that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the benefit plan design 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 carrier 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 master policy by an admitted insurer is delivered directly to the 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. (s) “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 may also 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 those persons as members of the guaranteed association, the association must so elect in advance of purchasing coverage from a plan. Health plans may require an association to adhere to the membership composition it selects for up to 12 months. (t) “Grandfathered health plan” has the meaning set forth in Section 1251 of PPACA. (u) “Nongrandfathered health benefit plan” means a health benefit plan that is not a grandfathered health plan. (v) “Plan year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. (w) “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. (x) “Waiting period” means a period that is required to pass with respect to the employee before the employee is eligible to be covered for benefits under the terms of the contract. (y) “Registered domestic partner” means a person who has established a domestic partnership as described in Section 297 of the Family Code. (z) “Family” means the policyholder and his or her dependents. (Amended by Stats. 2018, Ch. 700, Sec. 8. (SB 1375) Effective January 1, 2019.)
  24. 10753.01.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 1. Definitions [10753 - 10753.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 14. )

    Verify source ↗

    Certain specified disease and hospital confinement indemnity policies are excluded from “health benefit plan” if the carrier follows the required filing and disclosure rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 1. Definitions [10753 - 10753.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.01. (a) For purposes of this chapter, “health benefit plan” does not include policies or certificates of specified disease or hospital confinement indemnity provided that the carrier offering those policies or certificates complies with the following: (1) The carrier files, on or before March 1 of each year, a certification with the commissioner that contains the statement and information described in paragraph (2). (2) The certification required in paragraph (1) shall contain the following: (A) A statement from the carrier certifying that policies or certificates described in this section (i) are being offered and marketed as supplemental health insurance and not as a substitute for coverage that provides essential health benefits as defined by the state pursuant to Section 1302 of PPACA, and (ii) the disclosure forms as described in Section 10603 contains the following statement prominently on the first page: “This is a supplement to health insurance. It is not a substitute for essential health benefits or minimum essential coverage as defined in federal law.” (B) A summary description of each policy or certificate described in this section, including the average annual premium rates, or range of premium rates in cases where premiums vary by age, gender, or other factors, charged for the policies and certificates issued or delivered in this state. (3) In the case of a policy or certificate that is described in this section and that is offered for the first time in this state with respect to plan years on or after January 1, 2014, the carrier files with the commissioner the information and statement required in paragraph (2) at least 30 days prior to the date such a policy or certificate is issued or delivered in this state. (b) As used in this section, “policies or certificates of specified disease” and “policies or certificates of hospital confinement indemnity” mean policies or certificates of insurance sold to an insured to supplement other health insurance coverage as specified in this section. An insurer issuing a “policy or certificate of specified disease” or a “policy or certificate of hospital confinement indemnity” shall require that the person to be insured is covered by an individual or group policy or contract that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  25. 10753.02.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

    Verify source ↗

    This section limits the chapter’s application to nongrandfathered health benefit plans and plan years starting on or after January 1, 2014, and applies the chapter to certain carriers of small-employer plans when specified premium-payment or tax-treatment conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.02. (a) This chapter shall apply only to nongrandfathered health benefit plans and only with respect to plan years commencing on or after January 1, 2014. (b) All carriers writing, issuing, or administering health benefit plans that cover employees of small employers shall be subject to this chapter if any one of the following conditions are met: (1) Any portion of the premium for any health benefit plan or benefits 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 health benefit plan 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. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  26. 10753.02.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    If you are subject to this chapter, you must follow the standards in the Family Code and Welfare and Institutions Code sections named here.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.02.1. Any person or entity subject to the requirements of this chapter shall comply with the standards set forth in Chapter 7 (commencing with Section 3750) of Part 1 of Division 9 of the Family Code and Section 14124.94 of the Welfare and Institutions Code. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  27. 10753.03.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

    Verify source ↗

    The commissioner has authority to decide whether a health benefit plan is covered by this chapter and whether an employer qualifies as a small employer under Section 10753.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.03. The commissioner shall have the authority to determine whether a health benefit plan is covered by this chapter, and to determine whether an employer is a small employer within the meaning of Section 10753. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  28. 10753.04.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    The commissioner may issue regulations needed to carry out this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.04. The commissioner may issue regulations that are necessary to carry out the purposes of this chapter. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  29. 10753.05.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    Some associations may buy small employer health coverage as if they were guaranteed associations, and an association using this section gets the rights of a guaranteed association.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.05.2. (a) For 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 10753, 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 10753, (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. 14. (AB 1083) Effective January 1, 2013.)
  30. 10753.06.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    Carriers must file participation and employer contribution requirements with the commissioner, apply participation requirements uniformly to small employer groups, and avoid certain participation rules that would force dependents to enroll or let carriers reject employers based on waived coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.06. Every carrier shall file with the commissioner the reasonable participation requirements and employer contribution requirements that are to be included in its health benefit plans. Participation requirements shall be applied uniformly among all small employer groups, except that a carrier may vary application of minimum employer 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 carrier shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in subdivision (e) of Section 10753 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 carrier 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 eligible under subdivision (s) of Section 10753 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 carrier’s reasonable participation standards. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  31. 10753.06.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

    Verify source ↗

    This section sets deadlines for a carrier to quote rates and for coverage to become effective for small employer health plans, and gives the employer a limited window to choose coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.06.5. (a) With respect to small employer health benefit plans offered outside the Exchange, after a small employer submits a completed application, the carrier shall, within 30 days, notify the employer of the employer’s actual rates in accordance with Section 10753.14. The employer has 30 days in which to exercise the right to buy coverage at the quoted rates. (b) Except as required under subdivision (c), when a small employer submits a premium payment, based on the quoted rates, and that payment is delivered or postmarked, whichever occurs earlier, within the first 15 days of a month, coverage 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 benefit plan offered through the Exchange, a carrier 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 10965.3. (2) With respect to a small employer health benefit plan offered outside the Exchange for which an individual applies during a special enrollment period described in paragraph (3) of subdivision (b) of Section 10753.05, the following provisions shall apply: (A) Coverage under the plan shall become effective no later than the first day of the first calendar month beginning after the date the carrier 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 shall become effective on the date of birth, adoption, or placement for adoption. (d) During the first 30 days of coverage, the small employer shall have the option of changing coverage to a different health benefit plan offered by the same carrier. If a small employer notifies the carrier of the change within the first 15 days of a month, coverage under the new health benefit plan shall become effective no later than the first day of the following month. If a small employer notifies the carrier of the change after the 15th day of a month, coverage under the new health benefit plan 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. 372. (AB 731) Effective January 1, 2016.)
  32. 10753.08.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    A health benefit plan must not impose a preexisting condition provision or a waiting or affiliation period on any individual.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.08. A health benefit plan 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. 13. (SB 1034) Effective January 1, 2015.)
  33. 10753.09.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    A carrier may restrict late enrollees to open enrollment periods under the stated conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.09. Nothing in this chapter shall be construed as prohibiting a carrier from restricting enrollment of late enrollees to open enrollment periods provided under Section 10753.05 as authorized under Section 2702 of the federal Public Health Service Act. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  34. 10753.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    A carrier is exempt from some coverage requirements, and in some capacity-shortage situations it may not offer coverage to new employer groups for a period.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.11. (a) To the extent permitted by PPACA, a carrier shall not be required by the provisions of this chapter to do any of the following: (1) Offer coverage to, or accept applications from, a small employer where the small employer is seeking coverage for eligible employees and dependents who do not live, work, or reside in a carrier’s service areas. (2) (A) Offer coverage to, or accept applications from, a small employer for a benefits plan design within an area if the commissioner has found all of the following: (i) The carrier will not have the capacity within the area in its network of providers to deliver service adequately to the eligible employees and dependents of that employee because of its obligations to existing group contractholders and enrollees. (ii) The carrier 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. (iii) The action is not unreasonable or clearly inconsistent with the intent of this chapter. (B) A carrier that cannot offer coverage to small employers in a specific service area because it is lacking sufficient capacity as described in this paragraph may not offer coverage in the applicable area 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 carrier notifies the commissioner that it has regained capacity to deliver services to small employers, and certifies to the commissioner that from the date of the notice it will enroll all small groups requesting coverage from the carrier until the carrier has met the requirements of subdivision (g) of Section 10753.05. (C) Subparagraph (B) shall not limit the carrier’s ability to renew coverage already in force or relieve the carrier of the responsibility to renew that coverage as described in Sections 10273.4 and 10753.13. (D) Coverage offered within a service area after the period specified in subparagraph (B) shall be subject to the requirements of this section. (Amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 12. (AB 2 1x) Effective September 30, 2013.)
  35. 10753.12.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    A carrier may be excused from offering coverage or taking applications if it proves to the commissioner that doing so would leave it financially impaired, and the proof must be applied uniformly across employers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.12. (a) A carrier shall not be required to offer coverage or accept applications for benefit plan designs pursuant to this chapter where the carrier demonstrates to the satisfaction of the commissioner both of the following: (1) The acceptance of an application or applications would place the carrier in a financially impaired condition. (2) The carrier is applying this subdivision 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. (b) The commissioner’s determination under subdivision (a) shall follow an evaluation that includes a certification by the commissioner that the acceptance of an application or applications would place the carrier in a financially impaired condition. (c) A carrier that has not offered coverage or accepted applications pursuant to this chapter shall not offer coverage or accept applications for any individual or group health benefit plan until the later of the following dates: (1) The 181st day after the date that coverage is denied pursuant to this section. (2) The date on which the carrier ceases to be financially impaired, as determined by the commissioner. (d) Subdivision (c) shall not limit the carrier’s ability to renew coverage already in force or relieve the carrier of the responsibility to renew that coverage as described in Sections 10273.4, 10273.6, and 10753.13. (e) Coverage offered within a service area after the period specified in subdivision (c) shall be subject to the requirements of this section. (Amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 13. (AB 2 1x) Effective September 30, 2013.)
  36. 10753.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    Small employer health plans must generally be renewable at the option of the policyholder, contractholder, or small employer, with specific exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.13. All health benefit plans subject to this chapter shall be renewable with respect to all eligible employees or dependents at the option of the policyholder, contractholder, or small employer except as follows: (a) (1) For nonpayment of the required premiums by the policyholder, contractholder, or small employer, if the policyholder, contractholder, or small employer 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. (2) An insurer shall continue to provide coverage as required by the policyholder’s, contractholder’s, or small employer’s policy during the period described in paragraph (1). Nothing in this section shall be construed to affect or impair the policyholder’s, contractholder’s, small employer’s, or insurer’s other rights and responsibilities pursuant to the subscriber contract. (b) If the insurer demonstrates fraud or an intentional misrepresentation of material fact under the terms of the policy by the policyholder, contractholder, or small employer or, with respect to coverage of individual enrollees, the enrollees or their representative. (c) Violation of a material contract provision relating to employer contribution or group participation rates by the policyholder, contractholder, or small employer. (d) When the carrier ceases to write, issue, or administer new or existing grandfathered or nongrandfathered small employer health benefit plans in this state, provided, however, that the following conditions are satisfied: (1) Notice of the decision to cease writing, issuing, or administering new or existing small employer health benefits plans in this state is provided to the commissioner, and to either the policyholder, contractholder, or small employer at least 180 days prior to the discontinuation of the coverage. (2) Small employer health benefit plans subject to this chapter shall not be canceled for 180 days after the date of the notice required under paragraph (1). For that business of a carrier that remains in force, any carrier that ceases to write, issue, or administer new or existing health benefit plans shall continue to be governed by this chapter. (3) Except in the case where a certification has been approved pursuant to subdivision (l) of Section 10753.05 or the commissioner has made a determination pursuant to subdivision (a) of Section 10753.12, a carrier that ceases to write, issue, or administer new health benefit plans to small employers in this state after the passage of this chapter shall be prohibited from writing, issuing, or administering new health benefit plans to small employers in this state for a period of five years from the date of notice to the commissioner. (e) When a carrier withdraws a benefit plan design from the small employer market, provided that the carrier notifies all affected policyholders, contractholders, or small employers and the commissioner at least 90 days prior to the discontinuation of those contracts, and that the carrier makes available to the small employer all small employer benefit plan designs which it markets. (f) If coverage is made available through a bona fide association pursuant to subdivision (q) of Section 10753 or a guaranteed association pursuant to subdivision (r) of Section 10753, the membership of the employer or the individual, respectively, ceases, but only if that coverage is terminated under this subdivision uniformly without regard to any health status-related factor of covered individuals. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  37. 10753.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    Small employer health benefit plan premium rates may vary only by age, geographic region, or whether the plan covers an individual or family; other rating factors are not allowed.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.14. (a) The premium rate for a small employer health benefit plan 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 plan 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 Managed Health Care, 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 imposed under this subparagraph is inoperative June 1, 2021, pursuant to Section 10231.5 of the Government Code. (3) Whether the health benefit plan covers an individual or family, as described in PPACA. (b) The rate for a health benefit plan 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 health benefit plan. (Amended by Stats. 2021, Ch. 764, Sec. 10. (SB 326) Effective January 1, 2022.)
  38. 10753.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    Carriers selling certain health benefit plans to small employers must make reasonable disclosures in sales materials and, on request, provide a listing of offered benefit plan designs and their rates.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.16. In connection with the offering for sale of a health benefit plan subject to this chapter to small employers: Each carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of the following: (a) The provisions concerning the carrier’s ability to change premium rates and the factors that affect changes in premium rates. The carrier shall disclose that claims experience cannot be used. (b) Provisions relating to the guaranteed issue of policies and 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 health benefit plan written, issued, or administered by the carrier at the time of application for a new health benefit plan, or at the time of renewal of a health benefit plan. (e) The availability, upon request, of a listing of all the carrier’s benefit plan designs offered, both inside and outside the Exchange, including the rates for each benefit plan design. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  39. 10753.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    Carriers must file certain statements with the commissioner before covering, renewing, issuing, delivering, or revising small employer health benefit plans, and they must keep and provide the required filing materials on request.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.17. (a) No carrier shall provide or renew coverage subject to this chapter until a statement has been filed with the commissioner listing all of the carrier’s health benefit plans currently in force that are offered or proposed to be offered for sale in this state, identified by form number, and, if previously approved by the commissioner, the date approved by the commissioner. (b) No carrier shall issue, deliver, renew, or revise a health benefit plan lawfully provided pursuant to subdivision (a) until all of the following requirements are met: (1) The carrier files with the commissioner a statement of the factors used to establish rates for the plan. (2) Either: (A) Thirty days expires after the statement is filed without written notice from the commissioner specifying the reasons for his or her opinion that the carrier’s rating factors do not comply with the requirements of this chapter. (B) Prior to that time the commissioner gives the carrier written notice that the carrier’s rating factors as filed comply with the requirements of this chapter. (c) If the commissioner notifies the carrier, in writing, that the carrier’s rating factors do not comply with the requirements of this chapter, specifying the reasons for his or her opinion, it is unlawful for the carrier, at any time after the receipt of such notice, to utilize the noncomplying health benefit plan or rating factors in conjunction with the health benefit plans or benefit plan designs for which the filing was made. (d) Each carrier shall maintain at its principal place of business copies of all information required to be filed with the commissioner pursuant to this section. (e) Each carrier shall make the information and documentation described in this section available to the commissioner upon request. (f) Nothing in this section shall be construed to permit the commissioner to establish or approve the rates charged to policyholders for health benefit plans. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  40. 10753.18.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    The commissioner and courts may assess penalties for violations of this chapter, with different penalty amounts depending on the violator and whether the violation is first, repeated, or knowing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.18. (a) In addition to any other remedy permitted by law, the commissioner shall have the administrative authority to assess penalties against carriers, insurance producers, and other entities engaged in the business of insurance or other persons or entities for violations of this chapter. (b) Upon a showing of a violation of this chapter in any civil action, a court may also assess the penalties described in this chapter, in addition to any other remedies provided by law. (c) Any production agent or other person or entity engaged in the business of insurance, other than a carrier, that violates this chapter is liable for administrative penalties of not more than two hundred fifty dollars ($250) for the first violation. (d) Any production agent or other person or entity engaged in the business of insurance, other than a carrier, that engages in practices prohibited by this chapter a second or subsequent time, or who commits a knowing violation of this chapter, is liable for administrative penalties of not less than one thousand dollars ($1,000) and not more than two thousand five hundred dollars ($2,500) for each violation. (e) Any carrier that violates this chapter is liable for administrative penalties of not more than two thousand five hundred dollars ($2,500) for the first violation and not more than five thousand dollars ($5,000) for each subsequent violation. (f) Any carrier that violates this chapter with a frequency that indicates a general business practice or commits a knowing violation of this chapter, is liable for administrative penalties of not less than fifteen thousand dollars ($15,000) and not more than one hundred thousand dollars ($100,000) for each violation. (g) An act or omission that is inadvertent and that results in incorrect premium rates being charged to more than one policyholder shall be a single violation for the purpose of this section. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  41. 10753.18.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    The commissioner can start enforcement action against insurance businesses that violate this chapter, hold hearings, issue corrective orders, and suspend a carrier’s certificate in serious cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.18.5. (a) (1) In addition to any other remedy permitted by law, whenever the commissioner shall have reason to believe that any carrier, production agent, or other person or entity engaged in the business of insurance has violated this chapter, and that a proceeding by the commissioner in respect thereto would be in the interest of the public, the commissioner may issue and serve upon that entity an order to show cause containing a statement of the charges, a statement of the entity’s potential liability under this chapter, and a notice of a public hearing thereon before the Administrative Law Bureau of the department to be held at a time and place fixed therein, which shall not be less than 30 days after the service thereof, for the purpose of determining whether the commissioner should issue an order to that entity to pay the penalty imposed by this chapter and such order or orders as shall be reasonably necessary to correct, eliminate, or remedy the alleged violations of this chapter, including, but not limited to, an order to cease and desist from the specified violations of this chapter. (2) The hearings provided by this subdivision shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all the powers granted therein. (b) (1) Whenever it appears to the commissioner that irreparable loss and injury has occurred or may occur to an insured, employer, employee, or other member of the public because a carrier, production agent, or other person or entity engaged in the business of insurance has violated this chapter, the commissioner may, before hearing, but after notice and opportunity to submit relevant information, issue and cause to be served upon the entity such order or orders as shall be reasonably necessary to correct, eliminate, or remedy the alleged violations of this chapter, including, but not limited to, an order requiring the entity to forthwith cease and desist from engaging further in the violations which are causing or may cause such irreparable injury. (2) At the same time an order is served pursuant to paragraph (1) of this subdivision, the commissioner shall issue and also serve upon the person a notice of public hearing before the Administrative Law Bureau of the department to be held at a time and place fixed therein, which shall not be less than 30 days after the service thereof. (3) The hearings provided by this subdivision shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and the commissioner shall have all the powers granted therein. (4) At any time prior to the commencement of a hearing as provided in this subdivision, the entity against which the commissioner has served an order may waive the hearing and have judicial review of the order by means of any remedy afforded by law without first exhausting administrative remedies or procedures. (c) If, after hearing as provided by subdivision (a) or (b), the charges, or any of them, that an entity has violated this chapter are found to be justified, the commissioner shall issue and cause to be served upon that entity an order requiring that entity to pay the penalty imposed by this chapter and such order or orders as shall be reasonably necessary to correct, eliminate, or remedy the alleged violations of this chapter, including, but not limited to, an order to cease and desist from the specified violations of this chapter. (d) In addition to any other penalty provided by law or the availability of any administrative procedure, if a carrier, after notice and hearing, is found to have violated this chapter knowingly or as a general business practice the commissioner may suspend the carrier’s certificate of authority to transact disability insurance. The order of suspension shall prescribe the period of such suspension. The proceedings shall be conducted in accordance with the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code and the commissioner shall have all the powers granted therein. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  42. 10753.18.55.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    Carriers may contract with qualified associations for administrative services, but must use uniform definitions and discounts, report discount schedules, and avoid discounts tied to members’ health status. The commissioner may void a contract if prohibited health-status-based discounts are used.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.18.55. (a) Carriers 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. Carriers 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 carrier shall permit all qualified associations to assume one or more of these functions when the carrier determines the qualified association demonstrates that it has 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 carrier or through a third-party administrator on a commission basis or an agent or solicitor workforce on a commission basis. Each carrier 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 carrier has permitted the qualified association or its third-party administrator to assume. The carrier shall apply these uniform discounts to the carrier’s rates pursuant to Section 10753.14. The carrier shall report to the department its schedule of discounts for each administrative service. In no instance may a carrier 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 commissioner to enforce this chapter, the commissioner may declare a contract between a carrier and a qualified association for administrative services pursuant to this section null and void if the commissioner 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 any plan contract only to association members. (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 the requirements set forth in Section 10198.9. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  43. 10753.18.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. )

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    This chapter does not limit other Insurance Code provisions unless they conflict with this chapter’s requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.01. Nongrandfathered Small Employer Health Insurance [10753 - 10753.18.7] ( Chapter 8.01 added by Stats. 2012, Ch. 852, Sec. 14. ) ## ARTICLE 2. Small Employer Carrier Requirements [10753.02 - 10753.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 14. ) ## 10753.18.7. Notwithstanding any other provision of law, no provision of this chapter shall be construed to limit the applicability of any other provision of the Insurance Code unless such provision is in conflict with the requirements of this chapter. (Added by Stats. 2012, Ch. 852, Sec. 14. (AB 1083) Effective January 1, 2013.)
  44. 10755.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 1. Definitions [10755 - 10755.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 15. )

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    This section defines key terms used in the chapter, including carrier, eligible employee, late enrollee, small employer, guaranteed association, and waiting period.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 1. Definitions [10755 - 10755.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755. As used in this chapter, the following definitions shall apply: (a) “Agent or broker” means a person or entity licensed under Chapter 5 (commencing with Section 1621) of Part 2 of Division 1. (b) “Benefit plan design” means a specific health coverage product issued by a carrier to small employers, to trustees of associations that include small employers, or to individuals if the coverage is offered through employment or sponsored by an employer. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health care services which has significant incentives for the covered individuals to use the system. (c) “Carrier” means any disability insurance company or any other entity that writes, issues, or administers health benefit plans that cover the employees of small employers, regardless of the situs of the contract or master policyholder. (d) “Dependent” means the spouse or registered domestic partner, or child, of an eligible employee, subject to applicable terms of the health benefit plan 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 (t). (e) “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, in the small employer’s regular place 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. A permanent employee who works at least 20 hours but not more than 29 hours is an eligible employee if all four of the following apply: (A) The employee otherwise meets the definition of an eligible employee except for the number of hours worked. (B) The employer offers the employee 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 insurer 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 (t). (f) “Enrollee” means an eligible employee or dependent who receives health coverage through the program from a participating carrier. (g) “Financially impaired” means, for the purposes of this chapter, a carrier that, on or after the effective date of this chapter, is not insolvent and is either: (1) Deemed by the commissioner to be potentially unable to fulfill its contractual obligations. (2) Placed under an order of rehabilitation or conservation by a court of competent jurisdiction. (h) “Health benefit plan” means a policy or contract written or administered by a carrier that arranges or provides health care benefits for the covered eligible employees of a small employer and their dependents. The term does not include accident only, credit, disability income, coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement, long-term care insurance, dental, vision, coverage issued as a supplement to liability insurance, 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. (i) “In force business” means an existing health benefit plan issued by the carrier to a small employer. (j) “Late enrollee” means an eligible employee or dependent who has declined health coverage under 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 health benefit plan 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, another person eligible for coverage through a guaranteed association pursuant to subdivision (t), 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 the California Health Benefit Exchange 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, the 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, the Medi-Cal program, or 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 offered through the California Health Benefit Exchange. (2) The individual is employed by an employer who offers multiple health benefit plans and the individual 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 (e), the carrier cannot produce a written statement from the employer stating that the individual or the person through whom an 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 carrier 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 10198.7 or 10755.08. (B) In the case of an eligible employee who is a guaranteed association member, the plan cannot produce a written statement from the guaranteed 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 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). This exclusion from eligibility for coverage shall not be considered a waiting period in violation of Section 10198.7 or 10755.08. (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 coverage 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 10116.5 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 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. (k) “Preexisting condition provision” means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insured’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. (l) “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 federal 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 subdivision (c) of Section 2704 of Title XXVII of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-3(c)). (m) “Rating period” means the period for which premium rates established by a carrier are in effect and shall be no less than 12 months from the date of issuance or renewal of the health benefit plan. (n) “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. (o) “Risk adjustment factor” means the percent adjustment to be applied equally to each standard employee risk rate for a particular small employer, based upon any expected deviations from standard claims. This factor may not be more than 110 percent or less than 90 percent. (p) “Risk category” means the following characteristics of an eligible employee: age, geographic region, and family size of the employee, plus the benefit plan design 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 health benefit plan will be primary or secondary to benefits provided by the federal Medicare Program pursuant to Title XVIII of the federal Social Security Act. (2) Small employer carriers 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 carrier 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 shall divide no county into more than two regions. Carriers 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) In determining rates for small employers, a carrier that does not operate statewide shall use no more than the number of geographic regions in the state than is determined by the following formula: the population, as determined in the last federal census, of all counties which are included in their entirety in a carrier’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 carrier shall not have less than one geographic area. (q) (1) “Small employer” means either 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 benefit plans, 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 benefit plans, and in which a bona fide employer-employee relationship exists. In determining whether to apply the calendar quarter or calendar year test, a carrier 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 benefit plan to a small employer pursuant to this chapter, and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided in this chapter, provisions of this chapter 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, but does not include multiple employer welfare arrangements regulated pursuant to Article 4.7 (commencing with Section 742.20) of Chapter 1 of Part 2 of Division 1 that provide health care benefits to their members on a self-funded or partially self-funded basis and that comply with small group health reforms. (B) Any guaranteed association, as defined in subdivision (s), 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 considered employees. (r) “Standard employee risk rate” means the rate applicable to an eligible employee in a particular risk category in a small employer group. (s) “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 which (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (q), (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 by 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 been offering health insurance to its members 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 benefit plan design that is purchased to all individual members and employer members in this state, (9) includes any member choosing to enroll in the benefit plan design 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 carrier 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 master policy by an admitted insurer is delivered directly to the 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. (t) “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 may also 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 those persons as members of the guaranteed association, the association must so elect in advance of purchasing coverage from a plan. Health plans may require an association to adhere to the membership composition it selects for up to 12 months. (u) “Grandfathered health benefit plan” means a health benefit plan that constitutes a grandfathered health plan. (v) “Grandfathered health plan” has the meaning set forth in Section 1251 of PPACA. (w) “Nongrandfathered health benefit plan” means a health benefit plan that is not a grandfathered health plan. (x) “Plan year” has the meaning set forth in Section 144.103 of Title 45 of the Code of Federal Regulations. (y) “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. (z) “Waiting period” means a period that is required to pass with respect to the employee before the employee is eligible to be covered for benefits under the terms of the contract. (aa) “Registered domestic partner” means a person who has established a domestic partnership as described in Section 297 of the Family Code. (Amended by Stats. 2018, Ch. 700, Sec. 10. (SB 1375) Effective January 1, 2019.)
  45. 10755.01.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 1. Definitions [10755 - 10755.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Certain specified-disease and hospital-confinement indemnity policies are excluded from “health benefit plan” only if the carrier meets filing and disclosure requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 1. Definitions [10755 - 10755.01] ( Article 1 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.01. (a) For purposes of this chapter, “health benefit plan” does not include policies or certificates of specified disease or hospital confinement indemnity provided that the carrier offering those policies or certificates complies with the following: (1) The carrier files, on or before March 1 of each year, a certification with the commissioner that contains the statement and information described in paragraph (2). (2) The certification required in paragraph (1) shall contain the following: (A) A statement from the carrier certifying that policies or certificates described in this section (i) are being offered and marketed as supplemental health insurance and not as a substitute for coverage that provides essential health benefits as defined by the state pursuant to Section 1302 of PPACA, and (ii) contain the disclosure forms as described in Section 10603 with the following statement prominently on the first page: “This is a supplement to health insurance. It is not a substitute for essential health benefits or minimum essential coverage as required under federal law.” (B) A summary description of each policy or certificate described in this section, including the average annual premium rates, or range of premium rates in cases where premiums vary by age, gender, or other factors, charged for the policies and certificates issued or delivered in this state. (3) In the case of a policy or certificate that is described in this section and that is offered for the first time in this state for plan years on or after January 1, 2014, the carrier files with the commissioner the information and statement required in paragraph (2) at least 30 days prior to the date such a policy or certificate is issued or delivered in this state. (b) As used in this section, “policies or certificates of specified disease” and “policies or certificates of hospital confinement indemnity” mean policies or certificates of insurance sold to an insured to supplement other health insurance coverage as specified in this section. An insurer issuing a “policy or certificate of specified disease” or a “policy or certificate of hospital confinement indemnity” shall require that the person to be insured is covered by an individual or group policy or contract that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  46. 10755.02.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    This section applies the chapter to grandfathered health benefit plans for plan years starting on or after January 1, 2014, and makes covered carriers subject to the chapter if either premium/payment or tax-treatment conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.02. (a) This chapter shall apply only to grandfathered health benefit plans and only with respect to plan years commencing on or after January 1, 2014. (b) All carriers administering health benefit plans that cover employees of small employers shall be subject to this chapter if any one of the following conditions are met: (1) Any portion of the premium for any health benefit plan or benefits 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 health benefit plan 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. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  47. 10755.02.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Covered persons or entities must comply with specified standards in the Family Code and Welfare and Institutions Code.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.02.1. Any person or entity subject to the requirements of this chapter shall comply with the standards set forth in Chapter 7 (commencing with Section 3750) of Part 1 of Division 9 of the Family Code and Section 14124.94 of the Welfare and Institutions Code. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  48. 10755.03.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    The commissioner has authority to decide whether a health benefit plan is covered by this chapter and whether an employer counts as a small employer under Section 10755.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.03. The commissioner shall have the authority to determine whether a health benefit plan is covered by this chapter, and to determine whether an employer is a small employer within the meaning of Section 10755. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  49. 10755.04.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    The department may adopt emergency regulations to implement this chapter, and may readopt a substantially equivalent emergency regulation once. The initial regulations must be submitted for filing and each emergency regulation may stay in effect for no more than 180 days.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.04. (a) The department may adopt emergency regulations implementing this chapter 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. (c) This section shall become operative on January 1, 2013. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  50. 10755.05.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Carriers generally must renew and make available certain small-employer health plans, provide plan information on request, and avoid steering or pricing practices based on health-related factors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.05. (a) (1) Each carrier, except a self-funded employer, shall fairly and affirmatively renew all of the carrier’s health benefit plans that are sold to small employers or associations that include small employers. (2) Nothing in this section shall be construed to require an association, or a trust established and maintained by an association to receive a master insurance policy issued by an admitted insurer and to administer the benefits thereof solely for association members, to offer, market or sell a benefit plan design to those who are not members of the association. However, if the association markets, offers or sells a benefit plan design to those who are not members of the association it is subject to the requirements of this section. This shall apply to an association that otherwise meets the requirements of paragraph (6) formed by merger of two or more associations after January 1, 1992, if the predecessor organizations had been in active existence on January 1, 1992, and for at least five years prior to that date and met the requirements of paragraph (3). (3) A carrier which (A) effective January 1, 1992, and at least 20 years prior to that date, markets, offers, or sells benefit plan designs only to all members of one association and (B) does not market, offer or sell any other individual, selected group, or group policy or contract providing medical, hospital and surgical benefits shall not be required to market, offer, or sell to those who are not members of the association. However, if the carrier markets, offers or sells any benefit plan design or any other individual, selected group, or group policy or contract providing medical, hospital and surgical benefits to those who are not members of the association it is subject to the requirements of this section. (4) Each carrier that sells health benefit plans to members of one association pursuant to paragraph (3) shall submit an annual statement to the commissioner which states that the carrier is selling health benefit plans pursuant to paragraph (3) and which, for the one association, lists all the information required by paragraph (5). (5) Each carrier that sells health benefit plans to members of any association shall submit an annual statement to the commissioner which lists each association to which the carrier sells health benefit plans, the industry or profession which is served by the association, the association’s membership criteria, a list of officers, the state in which the association is organized, and the site of its principal office. (6) For purposes of paragraphs (2) and (3), an association is 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 small employer meeting its membership criteria, which do not condition membership directly or indirectly on the health or claims history of any person, which 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, which is organized and maintained in good faith for purposes unrelated to insurance, which has been in active existence on January 1, 1992, and at least five years prior to that date, which has a constitution and bylaws, or other analogous governing documents which provide for election of the governing board of the association by its members, which has contracted with one or more carriers to offer one or more health benefit plans to all individual members and small employer members in this state. (b) Each carrier shall make available to each small employer all nongrandfathered health benefit plans that the carrier offers or sells to small employers or to associations that include small employers. Notwithstanding subdivision (c) of Section 10755, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier. (c) Each carrier shall do all of the following: (1) Prepare a brochure that summarizes all of its health benefit plans and make this summary available to small employers, agents, and brokers upon request. The summary shall include for each health benefit plan 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. Carriers are required to keep the information contained in the brochure accurate and up to date, and, upon updating the brochure, send copies to agents and brokers representing the carrier. Any entity that provides administrative services only with regard to a benefit plan design written or issued by another carrier shall not be required to prepare a summary brochure which includes that benefit plan design. (2) For each health benefit plan, prepare a more detailed evidence of coverage and make it available to small employers, agents and brokers upon request. The evidence of coverage shall contain all information that a prudent buyer would need to be aware of in making selections of benefit plan designs. An entity that provides administrative services only with regard to a benefit plan design written or issued by another carrier shall not be required to prepare an evidence of coverage for that benefit plan design. (3) Provide to small employers and agents and brokers, 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 and agents and brokers 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 agents or brokers who represent the carrier and, upon updating the brochure, send copies of the updated brochure to agents and brokers representing the carrier for the purpose of selling health benefit plans. (5) Notwithstanding subdivision (c) of Section 10755, for purposes of this subdivision, companies that are affiliated companies or that are eligible to file a consolidated income tax return shall be treated as one carrier. (d) No carrier, agent, or broker shall induce or otherwise encourage a small employer to separate or otherwise exclude an eligible employee from a health benefit plan which, in the case of an eligible employee meeting the definition in paragraph (1) of subdivision (e) of Section 10755, is provided in connection with the employee’s employment or which, in the case of an eligible employee as defined in paragraph (2) of subdivision (e) of Section 10755, is provided in connection with a guaranteed association. (e) No carrier or agent or broker 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 carrier because of the health status, claims experience, industry, occupation, or geographic location within the carrier’s approved service area of the small employer or the small employer’s employees. (2) Encourage or direct small employers to seek coverage from another carrier or the California Health Benefit Exchange because of the health status, claims experience, industry, occupation, or geographic location within the carrier’s approved service area of the small employer or the small employer’s employees. (f) No carrier shall, directly or indirectly, enter into any contract, agreement, or arrangement with an agent or broker that provides for or results in the compensation paid to an agent or broker for a health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the small employer or the small employer’s employees. This subdivision shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker 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. (g) A policy or contract that covers a small employer, as defined in Section 1304(b) of PPACA and in subdivision (q) of Section 10755 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. (h) If a carrier enters into a contract, agreement, or other arrangement with a third-party administrator or other entity to provide administrative, marketing, or other services related to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this chapter. (Amended by Stats. 2014, Ch. 195, Sec. 15. (SB 1034) Effective January 1, 2015.)
  51. 10755.05.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Certain qualifying associations may buy small employer health coverage, and an association getting coverage under this section gets the rights of a guaranteed association.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.05.1. (a) For 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 10755, 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 10755, (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. 15. (AB 1083) Effective January 1, 2013.)
  52. 10755.06.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Carriers must file their renewal participation requirements with the commissioner and apply participation rules uniformly for small employer health plans, with limited exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.06. Every carrier shall file with the commissioner the reasonable participation requirements that will be required in renewing its health benefit plans. Participation requirements of a health benefit plan shall be applied uniformly among all small employer groups, except that a carrier may vary application of minimum employer 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 of a health benefit plan shall not vary by employer size. A carrier shall not establish a participation requirement that (1) requires a person who meets the definition of a dependent in subdivision (d) of Section 10755 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 carrier 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 eligible under subdivision (t) of Section 10755 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 carrier’s reasonable participation standards. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  53. 10755.08.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    A health benefit plan may not impose a preexisting condition provision or a waiting or affiliation period on any individual.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.08. A health benefit plan 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. 17. (SB 1034) Effective January 1, 2015.)
  54. 10755.09.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    A carrier may restrict late enrollees to open enrollment periods if this is consistent with federal law.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.09. Nothing in this chapter shall be construed as prohibiting a carrier from restricting enrollment of late enrollees to open enrollment periods consistent with federal law. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  55. 10755.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    A carrier is not required to cover certain people or offer coverage in two specified situations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.11. No carrier shall be required by the provisions of this chapter: (a) To include in a health benefit plan an otherwise eligible employee or dependent, when the eligible employee or dependent does not work or reside within a carrier’s approved service area, except as provided in Section 10755.02.1. (b) To offer coverage to an eligible employee, as defined in paragraph (2) of subdivision (e) of Section 10755, who within 12 months of application for coverage terminated from a health benefit plan offered by the carrier. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  56. 10755.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Grandfathered small employer health plans must generally be renewable, but there are specific exceptions and notice rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.13. All grandfathered health benefit plans shall be renewable with respect to all eligible employees or dependents at the option of the policyholder, contractholder, or small employer except as follows: (a) (1) For nonpayment of the required premiums by the policyholder, contractholder, or small employer, if the policyholder, contractholder, or small employer 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. (2) An insurer shall continue to provide coverage as required by the policyholder’s, contractholder’s, or small employer’s policy during the period described in paragraph (1). Nothing in this section shall be construed to affect or impair the policyholder’s, contractholder’s, small employer’s, or insurer’s other rights and responsibilities pursuant to the subscriber contract. (b) If the insurer demonstrates fraud or an intentional misrepresentation of material fact under the terms of the policy by the policyholder, contractholder, or small employer or, with respect to coverage of individual enrollees, the enrollees or their representative. (c) Violation of a material contract provision relating to employer contribution or group participation rates by the policyholder, contractholder, or small employer. (d) When the carrier ceases to write, issue, or administer new or existing grandfathered or nongrandfathered small employer health benefit plans in this state, provided, however, that the following conditions are satisfied: (1) Notice of the decision to cease writing, issuing, or administering new or existing small employer health benefits plans in this state is provided to the commissioner, and to either the policyholder, contractholder, or small employer at least 180 days prior to the discontinuation of the coverage. (2) Small employer health benefit plans subject to this chapter shall not be canceled for 180 days after the date of the notice required under paragraph (1). For that business of a carrier that remains in force, any carrier that ceases to write, issue, or administer new or existing health benefit plans shall continue to be governed by this chapter. (3) A carrier that ceases to write, issue, or administer new health benefit plans to small employers in this state after the passage of this chapter shall be prohibited from writing, issuing, or administering new health benefit plans to small employers in this state for a period of five years from the date of notice to the commissioner. (e) When a carrier withdraws a health benefit plan from the small employer market, provided that the carrier notifies all affected policyholders, contractholders, or small employers and the commissioner at least 90 days prior to the discontinuation of those contracts, and that the carrier makes available to the small employer all nongrandfathered small employer health benefit plans which it markets and satisfies the requirements of Section 10714. (f) If coverage is made available through a bona fide association pursuant to subdivision (q) of Section 10755 or a guaranteed association pursuant to subdivision (s) of Section 10755, the membership of the employer or the individual, respectively, ceases, but only if that coverage is terminated under this subdivision uniformly without regard to any health status-related factor of covered individuals. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  57. 10755.14.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Carriers setting premiums for grandfathered small employer health plans must use risk-adjusted rates within specified limits and timing rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.14. Premiums for grandfathered health benefit plans written or administered by carriers on or after the January 1, 2014, 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 carrier’s standard employee risk rates. The risk adjusted employee risk rate 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 12 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 carrier’s standard employee risk rates. The risk adjusted employee risk rate 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 12 months. (c) (1) For any small employer, a carrier 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 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 12 months, except that a carrier may reserve the right to redetermine the composite rates if the enrollment under the health benefit plan 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 carrier reserves the right to redetermine the rates and the enrollment changes more than the specified percentage, the carrier shall redetermine the composite rates if the redetermined rates would result in a lower premium for the small employer. A carrier 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. 15. (AB 1083) Effective January 1, 2013.)
  58. 10755.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.15. Carriers shall apply standard employee risk rates consistently with respect to all small employers. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  59. 10755.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    When renewing a grandfathered health benefit plan for small employers, each carrier must make a reasonable disclosure in its solicitation and sales materials.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.16. In connection with the renewal of any grandfathered health benefit plan to small employers: Each carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of the following: (a) The extent to which the premium rates for a specified small employer are established or adjusted in part based upon the actual or expected variation in claims costs of the employees and dependents of the small employer. (b) The provisions concerning the carrier’s ability to change premium rates and the factors other than claim experience which affect changes in premium rates. (c) Provisions relating to the guaranteed issue of policies and contracts. (d) Provisions relating to the prohibition of any preexisting condition provision. (e) Provisions relating to the small employer’s right to apply for any nongrandfathered health benefit plan written, issued, or administered by the carrier, at the time of application for a new health benefit plan, or at the time of renewal of a health benefit plan, consistent with the requirements of PPACA. (f) The availability, upon request, of a listing of all the carrier’s nongrandfathered health benefit plans, offered inside or outside the California Health Benefit Exchange, including the rates for each benefit plan design. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  60. 10755.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Carriers may not renew certain grandfathered small employer health coverage until they file required statements with the commissioner and wait for either 30 days to pass without objection or written compliance notice.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.17. (a) No carrier shall renew coverage subject to this chapter until it has done all of the following: (1) A statement has been filed with the commissioner listing all of the carrier’s grandfathered health benefit plans currently in force in this state, identified by form number, and, if previously approved by the commissioner, the date approved by the commissioner as well as the standard employee risk rate for each risk category for each benefit plan design and the highest and lowest risk adjustment factors that the carrier intends to use in determining rates for each benefit plan design. When filing a new benefit plan design pursuant to Section 10755.05, carriers may submit both the policy form and the standard employee risk rates for each risk category at the same time. (2) Either: (A) Thirty days expires after that statement is filed without written notice from the commissioner specifying the reasons for his or her opinion that the carrier’s risk categories or risk adjustment factors do not comply with the requirements of this chapter. (B) Prior to that time the commissioner gives the carrier written notice that the carrier’s risk categories and risk adjustment factors as filed comply with the requirements of this chapter. (b) No carrier shall renew or revise a grandfathered health benefit plan lawfully provided pursuant to subdivision (a), and no carrier shall change the risk categories, risk adjustment factors, or standard employee risk rates for a grandfathered health benefit plan until all of the following requirements are met: (1) The carrier files with the commissioner a statement of the specific changes which the carrier proposes in the risk categories, risk adjustment factors, or standard employee risk rates. (2) Either: (A) Thirty days expires after such statement is filed without written notice from the commissioner specifying the reasons for his or her opinion that the carrier’s risk categories or risk adjustment factors do not comply with the requirements of this chapter. (B) Prior to that time the commissioner gives the carrier written notice that the carrier’s risk categories and risk adjustment factors as filed comply with the requirements of this chapter. (c) Notwithstanding any provision to the contrary, when a carrier is changing the standard employee risk rates of a health benefit plan lawfully provided under subdivision (a) or (b) but is not changing the risk categories or risk adjustment factors which have been previously authorized, the carrier need not comply with the requirements of paragraph (2) of subdivision (b), but instead shall submit the revised standard employee risk rates for the health benefit plan prior to renewing the health benefit plan. (d) When submitting filings under subdivision (a), (b), or (c), a carrier may also file with the commissioner at the time of the filings a statement of the standard employee risk rate for each risk category the carrier intends to use for each month in the 12 months subsequent to the date of the filing. Once the requirements of the applicable subdivision (a), (b), or (c), have been met, these rates shall be used by the carrier for the 12-month period unless the carrier is otherwise informed by the commissioner in his or her response to the filings submitted under subdivision (a), (b), or (c), provided that any subsequent change in the standard employee risk rates charged by the carrier which differ from those previously filed with the commissioner must be newly filed in accordance with this subdivision and provided that the carrier does not change the risk categories or risk adjustment factors for the health benefit plan. (e) If the commissioner notifies the carrier, in writing, that the carrier’s risk categories or risk adjustment factors do not comply with the requirements of this chapter, specifying the reasons for his or her opinion, it is unlawful for the carrier, at any time after the receipt of such notice, to utilize the noncomplying health benefit plan, benefit plan design, risk categories, or risk adjustment factors in conjunction with the health benefit plans or benefit plan designs for which the filing was made. (f) Each carrier shall maintain at its principal place of business copies of all information required to be filed with the commissioner pursuant to this section. (g) Each carrier shall make the information and documentation described in this section available to the commissioner upon request. (h) Nothing in this section shall be construed to permit the commissioner to establish or approve the rates charged to policyholders for health benefit plans. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  61. 10755.18.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    The commissioner may assess penalties for violations of this chapter, and a court may also assess those penalties in civil actions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.18. (a) In addition to any other remedy permitted by law, the commissioner shall have the administrative authority to assess penalties against carriers, insurance producers, and other entities engaged in the business of insurance or other persons or entities for violations of this chapter. (b) Upon a showing of a violation of this chapter in any civil action, a court may also assess the penalties described in this chapter, in addition to any other remedies provided by law. (c) Any production agent or other person or entity engaged in the business of insurance, other than a carrier, that violates this chapter is liable for administrative penalties of not more than two hundred fifty dollars ($250) for the first violation. (d) Any production agent or other person or entity engaged in the business of insurance, other than a carrier, that engages in practices prohibited by this chapter a second or subsequent time, or who commits a knowing violation of this chapter, is liable for administrative penalties of not less than one thousand dollars ($1,000) and not more than two thousand five hundred dollars ($2,500) for each violation. (e) Any carrier that violates this chapter is liable for administrative penalties of not more than two thousand five hundred dollars ($2,500) for the first violation and not more than five thousand dollars ($5,000) for each subsequent violation. (f) Any carrier that violates this chapter with a frequency that indicates a general business practice or commits a knowing violation of this chapter, is liable for administrative penalties of not less than fifteen thousand dollars ($15,000) and not more than one hundred thousand dollars ($100,000) for each violation. (g) An act or omission that is inadvertent and that results in incorrect premium rates being charged to more than one policyholder shall be a single violation for the purpose of this section. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  62. 10755.18.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    The commissioner may investigate suspected chapter violations by carriers and related insurance business entities, issue orders and hearing notices, require corrective action, and suspend a carrier’s disability-insurance authority after notice and hearing in certain cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.18.5. (a) (1) In addition to any other remedy permitted by law, whenever the commissioner shall have reason to believe that any carrier, production agent, or other person or entity engaged in the business of insurance has violated this chapter, and that a proceeding by the commissioner in respect thereto would be in the interest of the public, the commissioner may issue and serve upon that entity an order to show cause containing a statement of the charges, a statement of the entity’s potential liability under this chapter, and a notice of a public hearing thereon before the Administrative Law Bureau of the department to be held at a time and place fixed therein, which shall not be less than 30 days after the service thereof, for the purpose of determining whether the commissioner should issue an order to that entity to pay the penalty imposed by this chapter and such order or orders as shall be reasonably necessary to correct, eliminate, or remedy the alleged violations of this chapter, including, but not limited to, an order to cease and desist from the specified violations of this chapter. (2) The hearings provided by this subdivision shall be conducted in accordance with the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. (b) (1) Whenever it appears to the commissioner that irreparable loss and injury has occurred or may occur to an insured, employer, employee, or other member of the public because a carrier, production agent, or other person or entity engaged in the business of insurance has violated this chapter, the commissioner may, before hearing, but after notice and opportunity to submit relevant information, issue and cause to be served upon the entity such order or orders as shall be reasonably necessary to correct, eliminate, or remedy the alleged violations of this chapter, including, but not limited to, an order requiring the entity to forthwith cease and desist from engaging further in the violations which are causing or may cause such irreparable injury. (2) At the same time an order is served pursuant to paragraph (1) of this subdivision, the commissioner shall issue and also serve upon the person a notice of public hearing before the Administrative Law Bureau of the department to be held at a time and place fixed therein, which shall not be less than 30 days after the service thereof. (3) The hearings provided by this subdivision shall be conducted in accordance with the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the commissioner shall have all the powers granted therein. (4) At any time prior to the commencement of a hearing as provided in this subdivision, the entity against which the commissioner has served an order may waive the hearing and have judicial review of the order by means of any remedy afforded by law without first exhausting administrative remedies or procedures. (c) If, after hearing as provided by subdivision (a) or (b), the charges, or any of them, that an entity has violated this chapter are found to be justified, the commissioner shall issue and cause to be served upon that entity an order requiring that entity to pay the penalty imposed by this chapter and such order or orders as shall be reasonably necessary to correct, eliminate, or remedy the alleged violations of this chapter, including, but not limited to, an order to cease and desist from the specified violations of this chapter. (d) In addition to any other penalty provided by law or the availability of any administrative procedure, if a carrier, after notice and hearing, is found to have violated this chapter knowingly or as a general business practice the commissioner may suspend the carrier’s certificate of authority to transact disability insurance. The order of suspension shall prescribe the period of such suspension. The proceedings shall be conducted in accordance with the Administrative Procedure Act, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code and the commissioner shall have all the powers granted therein. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  63. 10755.18.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    Carriers may make agreements with qualified associations for administrative services, but they must use uniform definitions, apply and report uniform discounts, and must not give discounts that reduce premiums because of members’ health status.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.18.6. (a) Carriers 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. Carriers 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 carrier shall permit all qualified associations to assume one or more of these functions when the carrier determines the qualified association demonstrates that it has 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 carrier or through a third-party administrator on a commission basis or an agent or solicitor workforce on a commission basis. Each carrier 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 carrier has permitted the qualified association or its third-party administrator to assume. The carrier shall apply these uniform discounts to the carrier’s risk adjusted employee risk rates after the carrier has determined the qualified association’s risk adjusted employee risk rates pursuant to Section 10755.14. The carrier shall report to the department its schedule of discounts for each administrative service. In no instance may a carrier 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 commissioner to enforce this chapter, the commissioner may declare a contract between a carrier and a qualified association for administrative services pursuant to this section null and void if the commissioner 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 any plan contract only to association members. (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 the requirements set forth in Section 10198.9. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  64. 10755.18.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. )

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    This section says this chapter does not reduce the effect of other Insurance Code provisions unless they conflict with this chapter’s requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.02. Grandfathered Small Employer Health Insurance [10755 - 10755.18.7] ( Chapter 8.02 added by Stats. 2012, Ch. 852, Sec. 15. ) ## ARTICLE 2. Small Employer Carrier Requirements [10755.02 - 10755.18.7] ( Article 2 added by Stats. 2012, Ch. 852, Sec. 15. ) ## 10755.18.7. Notwithstanding any other provision of law, no provision of this chapter shall be construed to limit the applicability of any other provision of the Insurance Code unless such provision is in conflict with the requirements of this chapter. (Added by Stats. 2012, Ch. 852, Sec. 15. (AB 1083) Effective January 1, 2013.)
  65. 1076.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15. Withdrawal of Insurers [1070 - 1076] ( Article 15 enacted by Stats. 1935, Ch. 145. )

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    A withdrawing insurer must pay the commissioner a $1,410 fee for services and expenses connected with the withdrawal.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15. Withdrawal of Insurers [1070 - 1076] ( Article 15 enacted by Stats. 1935, Ch. 145. ) ## 1076. The withdrawing insurer shall pay to the commissioner a fee of one thousand four hundred ten dollars ($1,410) for all services and expenses in connection with the withdrawal. (Amended by Stats. 2017, Ch. 534, Sec. 19. (AB 1699) Effective January 1, 2018.)
  66. 1077.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    This section defines “insurer,” “exceeded its powers,” and “consent” for the administrative supervision article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077. As used in this article: (a) “Insurer” means and includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of life or disability insurance or of annuities. (b) “Exceeded its powers” means any of the following conditions: (1) The insurer has refused to permit examination of its books, papers, accounts, records, or affairs by the commissioner, his or her deputies, employees, or duly commissioned examiners. (2) A domestic insurer has unlawfully removed from this state books, papers, accounts, or records necessary for an examination of the insurer. (3) The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and departmental requests relating thereto. (4) The insurer has neglected or refused to observe an order of the commissioner to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock, or surplus. (5) The insurer is continuing to transact insurance or write business after its license has been revoked or suspended by the commissioner. (6) The insurer, by contract or otherwise, has unlawfully, or has in violation of an order of the commissioner, or has without first having obtained written approval of the commissioner, if approval is required by law, done any of the following: (A) Totally reinsured its entire outstanding business. (B) Merged or consolidated substantially its entire property or business with another insurer. (7) The insurer engaged in any transaction in which it is not authorized to engage under the laws of this state. (8) The insurer refused to comply with a lawful order of the commissioner. (c) “Consent” means agreement to administrative supervision by the insurer. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  67. 1077.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    This article applies to all domestic life or disability insurers, except the State Compensation Insurance Fund, and can also apply to certain other life or disability insurers doing business in the state if their state of domicile asks the commissioner to apply it.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.1. The provisions of the article shall apply to all of the following: (a) All domestic life or disability insurers, except the State Compensation Insurance Fund. (b) Any other life or disability insurer doing business in this state whose state of domicile has asked the commissioner to apply the provisions of this article as regards that insurer. (c) Notwithstanding subdivision (a), the State Compensation Insurance Fund may give its consent to administrative supervision pursuant to paragraph (5) of subdivision (a) of Section 1077.2. (Amended by Stats. 2006, Ch. 740, Sec. 4.6. Effective January 1, 2007.)
  68. 1077.2.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    The commissioner may place an insurer under administrative supervision if certain conditions are met, and the insurer must comply with the commissioner’s requirements once supervised.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.2. (a) An insurer may be subject to administrative supervision by the commissioner if, upon examination or at any other time it appears in the commissioner’s discretion that any of the following applies: (1) The insurer’s condition renders the continuance of its business hazardous to the public or to its insureds. (2) The insurer appears to have exceeded its powers granted under its certificate of authority and applicable law. (3) The insurer has failed to comply with the applicable provisions of the Insurance Code. (4) The business of the insurer is being conducted fraudulently. (5) The insurer gives its consent. (b) If the commissioner determines that the conditions set forth in subdivision (a) exist, the commissioner shall do all of the following: (1) Notify the insurer of his or her determination. (2) Furnish to the insurer a written list of the requirements to abate this determination. (3) Notify the insurer that it is under the supervision of the commissioner and that the commissioner is applying and effectuating the provisions of the article. The action by the commissioner shall be subject to review pursuant to Section 12940. (c) If placed under administrative supervision, the insurer shall have 60 days, or another period of time as designated by the commissioner, to comply with the requirements of the commissioner subject to the provisions of this article. (d) If it is determined after notice and hearing that the conditions giving rise to the supervision still exist at the end of the supervision period specified above, the commissioner may extend the period. (e) If it is determined that none of the conditions giving rise to the supervision exist, the commissioner shall release the insurer from supervision. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  69. 1077.3.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    Insurance-supervision records held by the commissioner or department are confidential, but the commissioner can allow department staff access and can disclose or make the information public in specified circumstances.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.3. (a) Notwithstanding any other provision of law, and except as set forth in this section, proceedings, hearings, notices, correspondence, reports, records, and other information in the possession of the commissioner or the department relating to the supervision of any insurer are confidential except as provided by this section. (b) The personnel of the department shall have access to these proceedings, hearings, notices, correspondence, reports, records, or information as permitted by the commissioner. (c) The commissioner may open the proceedings or hearings or disclose the notices, correspondence, reports, records, or information to a department, agency, or instrumentality of this or another state of the United States if the commissioner determines that the disclosure is necessary or proper for the enforcement of the laws of this or another state of the United States. (d) The commissioner may open the proceedings or hearings or make public the notices, correspondence, reports, records, or other information if the commissioner deems that it is in the best interest of the public or in the best interest of the insurer, its insureds, creditors, or the general public. (e) This section does not apply to hearings, notices, correspondence, reports, records, or other information obtained upon the appointment of a receiver for the insurer by a court of competent jurisdiction. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  70. 1077.4.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    During supervision, the commissioner or a designated appointee serves as administrative supervisor, and the insurer cannot carry out listed actions without prior approval.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.4. During the period of supervision, the commissioner or his or her designated appointee shall serve as the administrative supervisor. The commissioner may provide that the insurer may not do any of the following things during the period of supervision, without the prior approval of the commissioner or his or her appointed supervisor: (a) Dispose of, convey, or encumber any of its assets or its business in force. (b) Withdraw any of its bank accounts. (c) Lend any of its funds. (d) Invest any of its funds. (e) Transfer any of its property. (f) Incur any debt, obligation, or liability. (g) Merge or consolidate with another company. (h) Approve new premiums or renew any policies. (i) Enter into any new reinsurance contract or treaty. (j) Terminate, surrender, forfeit, convert, or lapse any insurance policy, certificate, or contract, except for nonpayment of premiums due. (k) Release, pay, or refund premium deposits, accrued cash, or loan values, unearned premiums, or other reserves on any insurance policy, certificate, or contract. (l) Make any material change in management. (m) Increase salaries and benefits of officers or directors or the preferential payment of bonuses, dividends, or other payments deemed preferential. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  71. 1077.5.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    An insurer under supervision may ask the commissioner to reconsider a supervisor’s action, and if the request is denied, the insurer may seek judicial review under Section 12940.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.5. During the period of supervision the insurer may contest an action taken or proposed to be taken by the supervisor specifying the manner wherein the action being complained of would not result in improving the condition of the insurer by requesting reconsideration by the commissioner. Denial of the insurer’s request upon reconsideration entitles the insurer to seek judicial review under Section 12940. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  72. 1077.6.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    The commissioner may start judicial proceedings to place an insurer into conservation, rehabilitation, liquidation, or another delinquency proceeding.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.6. Nothing contained in this article shall preclude the commissioner from initiating judicial proceedings to place an insurer in conservation, rehabilitation, or liquidation proceedings or other delinquency proceedings, however designated under the laws of this state, regardless of whether the commissioner has previously initiated administrative supervision proceedings under this article against the insurer. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  73. 1077.7.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    The commissioner may adopt reasonable rules needed to implement this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.7. The commissioner may adopt reasonable rules necessary for the implementation of this article. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  74. 1077.8.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    The commissioner may meet privately with a supervisor appointed under this article and the supervisor’s attorney or other representative.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.8. Notwithstanding any other provision of law, the commissioner may meet with a supervisor appointed under this article and with the attorney or other representative of the supervisor, without the presence of any other person, at the time of any proceedings or during the pendency of any proceeding held under authority of this article to carry out the commissioner’s duties under this article or for the supervisor to carry out his or her duties under this article. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  75. 1077.9.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    The commissioner, the department, and their employees or agents are not liable, and no cause of action arises against them, for actions taken while carrying out powers and duties under this article.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.9. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner or the department or its employees or agents for any action taken by them in the performance of their powers and duties under this article. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  76. 1077.95.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. )

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    The authority granted by this article is supplemental and does not replace any other provision of the Insurance Code.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 15.5. Administrative Supervision [1077 - 1077.95] ( Article 15.5 added by Stats. 1991, Ch. 986, Sec. 8. ) ## 1077.95. The authority granted pursuant to this article is in addition to, and not in lieu of, any other provision of this code. (Added by Stats. 1991, Ch. 986, Sec. 8.)
  77. 10785.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Coverage for Federally Eligible Defined Individuals [10785 - 10786] ( Chapter 8.5 added by Stats. 2000, Ch. 810, Sec. 3. )

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    A disability insurer generally may not refuse individual coverage or add a preexisting-condition exclusion for a federally eligible defined individual, and must follow federal coverage rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Coverage for Federally Eligible Defined Individuals [10785 - 10786] ( Chapter 8.5 added by Stats. 2000, Ch. 810, Sec. 3. ) ## 10785. (a) A disability insurer that covers hospital, medical, or surgical expenses under an individual health benefit plan as defined in subdivision (a) of Section 10198.6 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 disability insurer that covers hospital, medical, or surgical expenses 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 disability insurer shall offer the following health benefit plans 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 insurer in compliance with federal law. An insurer that offers only one health benefit plan to individuals, excluding health benefit plans offered to Medi-Cal or Medicare beneficiaries, shall be deemed to be in compliance with this chapter if it offers that health benefit plan contract to federally eligible defined individuals in a manner consistent with this chapter. (e) (1) In the case of a disability insurer that offers health benefit plans in the individual market through a network plan, the insurer 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 covered by the health benefit plan, deny coverage to individuals if the insurer has demonstrated to the commissioner that the insured will not have the capacity to deliver services adequately to additional individual insureds because of its obligations to existing group policyholders, group contractholders and insureds, and individual insureds, and that the insurer 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 disability insurer, upon denying health insurance coverage in any service area in accordance with subparagraph (B) of paragraph (1), may not offer health benefit plans through a network in the individual market within that service area for a period of 180 days after the coverage is denied. (f) (1) A disability insurer may deny health insurance coverage in the individual market to a federally eligible defined individual if the insurer has demonstrated to the commissioner both of the following: (A) The insurer does not have the financial reserves necessary to underwrite additional coverage. (B) The insurer 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 disability insurer, 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 insurer has demonstrated to the commissioner that the insurer 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 benefits plans offered by a disability insurer in the individual market in the same manner as it applies to an insurer in connection with a group health benefit plan policy or group health benefit plan contract. (h) A disability insurer shall compensate an accident and health agent or a life and accident and health 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 insurer compensates accident and health agents or life and accident and health agents for other enrollees who are not federally eligible defined individuals and who are purchasing the same individual health benefit plan. (i) Every disability insurer 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 federal 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 disability insurer 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 policies or contracts offered, delivered, amended, or renewed on or after January 1, 2001. (m) (1) On and after January 1, 2014, and except as provided in paragraph (2), this section shall apply only to individual grandfathered health plans previously issued pursuant to this section to federally eligible defined individuals. (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), paragraph (1) shall become inoperative on the date of that repeal or amendment and this section shall apply to health benefit plans issued, amended, or renewed on or after that date. (3) For purposes of this subdivision, the following definitions apply: (A) “Grandfathered health plan” has the same meaning as that term is defined in Section 1251 of PPACA. (B) “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. (Amended by Stats. 2013, Ch. 441, Sec. 17.5. (AB 1180) Effective October 1, 2013. Operative January 1, 2014, pursuant to Sec. 26 of Ch 441.)
  78. 10786.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Coverage for Federally Eligible Defined Individuals [10785 - 10786] ( Chapter 8.5 added by Stats. 2000, Ch. 810, Sec. 3. )

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    Health insurers must give certain notice and information to people losing coverage, and the Exchange may contact them about other coverage options.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 8.5. Coverage for Federally Eligible Defined Individuals [10785 - 10786] ( Chapter 8.5 added by Stats. 2000, Ch. 810, Sec. 3. ) ## 10786. (a) (1) On and after January 1, 2014, a health insurer providing health insurance coverage shall provide to policyholders in individual policies or certificate holders in group policies 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 free or low-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 Managed Health Care 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 insurer. (b) (1) A health insurer shall annually notify a policyholder or certificate holder that if the policyholder or certificate holder ceases to be enrolled in coverage, the health insurer will provide information, including the policyholder’s or certificate holder’s name, address, and other contact information, such as email address, to the Exchange so that the policyholder or certificate holder may obtain other coverage. A policyholder or certificate holder 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 insurer. (2) Beginning January 1, 2021, a health insurer that has notified its policyholders or certificate holders consistent with paragraph (1) shall provide to the Exchange the name, address, and other contact information of a policyholder or certificate holder 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 a policyholder or certificate holder who ceases to be enrolled in coverage of available coverage options. (c) This section does not apply to a specialized health insurance policy or a health insurance policy consisting solely of coverage of excepted benefits as described in Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21). (Amended by Stats. 2019, Ch. 845, Sec. 3. (SB 260) Effective January 1, 2020.)
  79. 108.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    This section defines what counts as liability insurance and lists several included coverages and exclusions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 108. Liability insurance includes: (a) Insurance against loss resulting from liability for injury, fatal or nonfatal, suffered by any natural person, or resulting from liability for damage to property, or property interests of others but does not include worker’s compensation, common carrier liability, boiler and machinery, or team and vehicle insurance. (b) (1) With respect to operations or property covered by a policy of liability insurance as defined in subdivision (a), insurance of medical, hospital, surgical and funeral loss or expense of the insured or other persons injured, and in the case of an automobile liability policy disability benefits to the insured or other persons injured and in the event of their death, funeral and accidental death benefits to their dependents, beneficiaries or personal representatives irrespective of legal liability of the insured, when issued with or supplemental to the insurance defined in subdivision (a); (2) When issued with or supplemental to the insurance defined in subdivision (a), disability insurance covering the insured and members of his household, or other persons who customarily operate any automobile covered by such a policy and who are named in such policy; and such disability insurance may cover against accidental injury, death or dismemberment caused by any or all hazards as defined in such coverage; (c) Insurance covering injuries sustained by an insured resulting from a tort committed by a third party against which such third party is not himself covered by liability insurance; (d) Insurance coverage against the legal liability of the insured, and against loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or malpractice in rendering professional services by any person who holds a certificate or license issued pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, a license issued pursuant to the Osteopathic Initiative Act, or license as a community clinic defined in subdivision (a) of Section 1203 of the Health and Safety Code, or a license as a health facility pursuant to Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code. (e) The provisions of this code relating to disability insurance do not apply to insurance defined in this section. (Amended by Stats. 1976, Ch. 152.)
  80. 108.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    Liability insurers are deemed to be admitted for workers’ compensation insurance when covering employees defined in Labor Code section 3351(d).

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 108.1. Insurers admitted to transact liability insurance are also deemed to be admitted to transact workers’ compensation insurance for the purpose of covering those persons defined as employees by subdivision (d) of Section 3351 of the Labor Code. (Repealed and added by Stats. 1977, Ch. 17.)
  81. 1080.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 16. Approval of Reinsurance Plans [1080 - 1091] ( Article 16 enacted by Stats. 1935, Ch. 145. )

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    Certain domestic mutual life or disability insurers may enter reinsurance, merger, consolidation, or asset transfer transactions, but the plan must be submitted to the commissioner and approved by the insurer’s members.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 16. Approval of Reinsurance Plans [1080 - 1091] ( Article 16 enacted by Stats. 1935, Ch. 145. ) ## 1080. Any domestic incorporated mutual life insurer or disability insurer or life and disability insurer issuing nonassessable policies on a reserve basis may merge, consolidate or otherwise unite with or become a part of, or may reinsure all of its policies with, and, upon the assumption of all of its liabilities, may transfer its assets to, any incorporated mutual insurer admitted to transact the business of life, disability or life and disability insurance in this State. The plan and agreement by which any such transaction is to be effected shall be submitted to the commissioner who shall examine the same and may require such provisions to be inserted in the agreement and such actions to be taken in connection with the transaction as he may deem necessary in order that the transaction shall be mutually fair and equitable between the respective members and policyholders of the companies parties to the transaction. When any such plan and agreement shall have been approved by the commissioner the same shall be approved in the case of each domestic insurer party to the merger or consolidation or the reinsuring of its policies and transferring of its assets by two-thirds of the votes cast by the members thereof represented in person or by proxy at a meeting called to consider the same. Notice of said meeting and its purpose shall be given by mail at least 30 days before the day fixed for the meeting to members whose insurance shall have been in force for at least one year prior to such meeting, at their addresses appearing on the books maintained at the home office of the company. With respect to those members whose addresses do not appear on such books of the company notice shall be deemed to have been given if published at least once in some newspaper of general circulation in the county in which the principal office of the company is located. At such meeting the presence in person or by proxy of 5 percent of such members of such insurer shall constitute a quorum. In the absence of a quorum the members present at the meeting in person or by proxy may adjourn the meeting to a later date. No further notice need be given of the date to which the meeting is adjourned. If the vote is in the affirmative a certified copy of all proceedings relating to the proposed transaction shall be filed with the commissioner. If one of the insurance companies is a foreign company there shall be filed with the commissioner evidence of such approval, consent or other authorization as may be required by the laws of the state of incorporation of said foreign insurance company evidencing the power of the foreign insurance company to assume and carry out the agreement by which such transaction is effected. If the commissioner finds that the proceedings have been in accordance with the law and his requirements he shall approve the agreement which shall thereupon become effective. (Added by Stats. 1957, Ch. 979.)
  82. 10800.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. )

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    This chapter is named the Private Health Care Voluntary Purchasing Alliance Act.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10800. This chapter shall be known as the Private Health Care Voluntary Purchasing Alliance Act. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  83. 10801.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. )

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    This section says the chapter’s purpose is to improve competition in health care coverage pricing and delivery for employers and small employers by allowing private purchasing alliances.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10801. The purpose of this chapter is to improve the competition in the pricing and delivering of health care coverage for employers and small employers. It does so by allowing for the establishment of private competing purchasing alliances through which eligible employers or small employers can purchase health coverage. Another goal is to avoid jurisdictional confusion by clarifying the respective roles and jurisdiction of existing regulatory agencies and a purchasing alliance. This chapter provides a mechanism for employers or small employers to join together solely for the purpose of procuring health coverage and operates as an exception to existing false group or fictitious group laws. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  84. 10802.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    This chapter is intended to support meaningful choices of quality, fairly priced health care providers and coverage for participating employers and employees in a purchasing alliance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10802. This chapter is also intended to provide a meaningful choice of high quality, fairly priced health care providers, and health care coverage for participating employers and employees of a purchasing alliance through a system that is fair, efficient, and accountable to its members and includes procedural and substantive protections. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  85. 10803.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. )

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    The section says a purchasing alliance is expected to contract with qualified group carriers to offer participants a meaningful choice of health benefit plan or ancillary benefit plan carriers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 1. General [10800 - 10803] ( Article 1 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10803. It is envisioned that a purchasing alliance will contract with qualified group carriers to provide a meaningful choice of carriers providing health benefit plans or ancillary benefit plans to purchasing alliance participants. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  86. 10810.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 2. Definitions [10810- 10810.] ( Article 2 added by Stats. 1996, Ch. 916, Sec. 1. )

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    This section defines key terms used in the chapter on private health care voluntary purchasing alliances.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 2. Definitions [10810- 10810.] ( Article 2 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10810. As used in this chapter: (a) “Ancillary benefit plan” means a policy or contract written or administered by a participating carrier that covers dental or vision benefits for the covered eligible employees of an employer or small employer and their dependents. (b) “Appropriate Regulatory Authority” means the Department of Insurance except for health care service plans, in which case it means the Department of Managed Health Care. (c) “Benefit plan design” means a specific health coverage product issued by a carrier to employers or small employers, to trustees of associations, or to individuals if the coverage is offered through employment or sponsored by an employer or small employer. It includes the services covered and the levels of copayment and deductibles. (d) “Board” means the governing body of the purchasing alliance. This term shall include the board of directors of a nonprofit corporation or trust, a for-profit corporation, the general partners of a partnership, or a sole proprietor. (e) “Carrier” means any licensed disability insurance company or licensed health care service plan or any other entity that writes, issues, or administers any health benefit plan or ancillary benefit plan to employers or small employers in this state. (f) “Commissioner” means the Insurance Commissioner, who shall have regulatory jurisdiction over purchasing alliances. (g) “Dependent” has the same meaning as in the subdivision (a) of Section 1357 of the Health and Safety Code and in subdivision (e) of Section 10700 of this code. (h) “Eligible employee” means any permanent employee who is actively engaged on a full-time basis in the conduct of business of the employer or small employer and, who has satisfied any employer or small employer waiting period requirements. The term includes sole proprietors or partners of a partnership if they are actively engaged on a full-time basis in the employer’s or small employer’s business, but does not include employees who work on a part-time, temporary, or substitute basis. (i) “Employer” means any corporation, partnership, sole proprietorship, or other business entity doing business in this state that may be eligible to participate in a purchasing alliance. The term “employer” shall not include “small employer” as defined in subdivision (s). (j) “Enrollee” means an eligible employee or a dependent of an eligible employee who is enrolled in a health benefit plan or ancillary benefit plan offered through the purchasing alliance by a participating carrier. (k)“Health benefit plan” means a policy or contract written or administered by a participating carrier that arranges or provides health care benefits for the covered eligible employees of an employer or small employer and their dependents. The term does not include accident only, credit, dental, vision, disability income, or long-term care insurance, coverage issued as a supplement to liability insurance, automobile medical payments insurance, or insurance under which benefits are payable with or without regard to fault and is statutorily required to be continued in any liability insurance policy or equivalent self-insurance. (l) “Management company” means the company under contract to the purchasing alliance to provide managerial services for the operation of the purchasing alliance. (m) “Participating carrier” means a carrier that contracts with a purchasing alliance to provide coverage to enrollees under a health benefit plan or ancillary benefit plan. (n) “Participating employer” means an employer or small employer who contracts with a purchasing alliance to provide coverage to the employer’s or small employer’s employees. (o) “Purchasing alliance” means a non-risk-bearing entity issued a certificate of registration pursuant to this chapter to provide health benefits through multiple unaffiliated participating carriers to multiple participating employers, small employers and their employees within this state as authorized by the commissioner. That entity shall include nonprofit corporations, for-profit corporations, trusts, partnerships, and sole proprietorships. (p) “Risk adjustment factor” for small employer benefit plan designs and contracts has the same meaning as in subdivision (j) of Section 1357 of the Health and Safety Code and in subdivision (u) of Section 10700 of this code. (q) “Service region” means that portion of the state, designated by the commissioner pursuant to regulations as described in this chapter in which each purchasing alliance must fairly and affirmatively offer, market, and sell all of the health benefit plan designs offered through the purchasing alliance that are sold or offered to a small employer to all small employers. (r) “Small employer” has the same meaning as in paragraph (1) of subdivision (l) of Section 1357 of the Health and Safety Code and in paragraph (1) of subdivision (w) of Section 10700 of this code. (s) “Third-party administrator” means the company contracted by the purchasing alliance to provide administrative services for the purchasing alliance and that is licensed to provide those services by the department pursuant to Section 1759.10. (Amended by Stats. 2000, Ch. 857, Sec. 70. Effective January 1, 2001.)
  87. 10820.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

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    The commissioner regulates purchasing alliances, sets six service regions, and can adopt rules. Unregistered persons or entities generally cannot market certain bundled health plans or use alliance-like names, and purchasing alliances must report suspected violations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10820. (a) The commissioner shall regulate the establishment and conduct of purchasing alliances as set forth in this chapter. (b) No person or entity may market, sell, offer, or contract for a package of one or more health benefit plans underwritten by two or more carriers to two or more employers or small employers or their eligible employees within a purchasing alliance without first being registered by the commissioner pursuant to this chapter. This subdivision does not apply to entities licensed by the Department of Managed Health Care as health care service plans or entities licensed by the Department of Insurance as disability insurers except that no licensed health care service plan or licensed disability insurer may be registered with the commissioner as a purchasing alliance. This chapter does not apply to any entity exempt pursuant to Section 1349.2 of the Health and Safety Code. (c) A person or entity not registered by the commissioner as a purchasing alliance and engaged in the purchase, sale, marketing or distribution of health insurance or health care benefit plans shall not hold itself out as an alliance, health insurance purchasing alliance, purchasing alliance, health alliance, health insurance purchasing cooperative, or purchasing cooperative, or otherwise use a confusingly similar name. (d) The commissioner shall establish six geographic service regions throughout which all purchasing alliances shall operate. These regions shall be established with no region smaller than an area in which the first three digits of all its postal ZIP Codes are in common within a county and shall divide no county into more than two service regions. Geographic service regions established pursuant to this section shall, as a group, cover the entire state, and the areas encompassed in geographic service regions shall be separate and distinct from regions encompassed in other geographic service regions. Geographic service regions may be noncontiguous. (e) Nothing in this chapter shall be deemed to be in conflict with or limit the duties and powers granted to the commissioner under the laws of this state. (f) Purchasing alliances shall report to the commissioner any suspected or alleged law violations of this chapter. (g) Violations of this chapter shall be subject to the penalties outlined hereafter. (h) The commissioner shall adopt reasonable rules and regulations as are necessary to administer this chapter. (i) Nothing in this chapter shall be construed or interpreted to apply to an entity that has been approved by the Director of the Department of Managed Health Care, pursuant to Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code, to act as a solicitor and third-party administrator with respect to a multiple carrier or health care service plan marketing cooperative in which each carrier or health care service plan contracts directly with subscribing groups or individuals for the provision of health care, for the arranging for the provision of health care, or for the provision of coverage for health care. (Amended by Stats. 2000, Ch. 857, Sec. 71. Effective January 1, 2001.)
  88. 10821.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

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    An entity applying to operate as a purchasing alliance must file a commissioner-designated application and supporting information, and a purchasing alliance must meet stated reserve and current-asset requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10821. (a) An entity seeking to obtain a certificate of registration to act as a purchasing alliance shall complete and file with the commissioner an application designated by the commissioner. An application will not be deemed filed until all information necessary to properly process the application has been received by the commissioner. (b) Upon filing, the commissioner shall make a determination concerning the application and provide notice of file determination to the applicant within 180 days of the date the application is deemed filed. If approved, a copy of a certificate of registration, in a form designed by the commissioner, shall be provided to the purchasing alliance. The certificate of registration shall serve as authorization to operate pursuant to this chapter. (c) A purchasing alliance shall maintain a minimum net worth of forty thousand dollars ($40,000) plus one months operating expenses as reserves. Net worth is defined as the excess of admitted assets over all liabilities. (d) A purchasing alliance shall at all times maintain current assets of at least ten thousand dollars ($10,000) in excess of current liabilities, as such current assets and liabilities may be defined pursuant to regulations made by the commissioner. In making those regulations, the commissioner shall be guided by generally accepted accounting principles followed by certified public accountants in this state. (e) The entity that is seeking to obtain a certificate of registration to act as a purchasing alliance shall file with the commissioner the following information or documents: (1) At the time of initial registration, the entity shall provide a written description as to how the entity intends to meet the public policy objectives of increased access and improved quality of health care services. The written description shall also demonstrate that the purchasing alliance will have the technical expertise and physical capacity to serve employers or small employers and their eligible employees in this state. The written description shall also describe the scope of services to be offered in this state and the resources and expertise to be used to implement and administer those services. (2) Current partnership agreements, articles of incorporation, trust documents, or similar documents establishing the group. (3) Current bylaws of the group. (4) A statement of grievance procedures relative to the eligibility, enrollment, premium collection, and administrative services provided by the alliance. (5) A statement of enrollment procedures and requirements, including participation and contribution rules and requirements. (6) A statement of disenrollment criteria and procedures. (7) A statement of payment procedures, late payment procedures, and grace periods. (8) A purchasing alliance shall demonstrate to the satisfaction of the commissioner that its governance makes it an appropriate and effective representative of employers or small employers and their eligible employees’ interests throughout this state. A purchasing alliance shall organize and facilitate competition between multiple unaffiliated carriers. (9) A list of owners, partners, officers, and directors of the applicant and the contracted management company or third-party administrator, if such are employed, and personal biographical information or firm descriptions for each. The owners, partners, officers, directors, and contracted managers and administrators shall not have a prior record of administrative, civil, or criminal violations within any financial service industry. The personal biographical information and firm descriptions shall demonstrate by clear and convincing evidence that those involved in the operation of the alliance have the expertise, experience, and character to effectively and professionally represent employers or small employers and their eligible employees in a fiduciary capacity. (10) Evidence of adequate security and prudence in the accounting, deposit, collection, handling, and transfer of moneys. A purchasing alliance shall affirmatively demonstrate adequate financial controls to the satisfaction of the commissioner as a condition of being issued a certificate of registration. (11) A description of the employers or small employers and their eligible employees to which the purchasing alliance will be marketing. A purchasing alliance shall demonstrate to the satisfaction of the commissioner that it will fairly and affirmatively offer, market, and sell all of its available small employer health benefit plan products to all small employers throughout all the service regions in this state. (12) Disclosure of any preexisting oral or written agreements. (13) Any other information required by the commissioner deemed pertinent to the policies and operation of the alliance. (f) Thirty days prior to any amendment or modification to any of the documents submitted pursuant to subdivision (e), the alliance shall file with the commissioner a copy of the amended or modified document. Any amendment or modification shall be deemed approved if the commissioner has not disapproved the document within 30 days. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  89. 10821.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

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    The purchasing alliance must file an annual financial audit with the commissioner, pay filing and late fees, and follow audit and registration fee rules set by the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10821.5. (a) The purchasing alliance shall furnish an annual financial audit to the commissioner on the forms provided by the commissioner. The annual financial audit may be filed either on a calendar year basis on or before March 31, or, if approved in writing by the commissioner in respect to any individual purchasing alliance, on a fiscal year basis on or before 90 days after the end of the fiscal year. The deadline for filing the annual audit may be extended by the commissioner for good cause, as determined by the commissioner for a period not to exceed 60 days. Failure to submit an audit on time, or within any extended time that the commissioner may grant, shall be grounds for an order by the commissioner to prohibiting the alliance from accepting any new business pursuant to this section. The audits shall be private, except that a synopsis of the balance sheet on a form prescribed by the commissioner may be made available to the public upon request. The audits shall be conducted and prepared in accordance with generally accepted auditing standards by an independent certified public accountant or independent licensed public accountant whose certification or license is in good standing at the time of the preparation. The fee for filing of the audit shall be three hundred thirteen dollars ($313). Any purchasing alliance that fails to file any audit or other report on or before the date it is due shall pay to the commissioner a penalty fee of one hundred eighteen dollars ($118) payable within 30 days of the due date of the audit and on failure to pay that fine or any fee or file the audit required by this section, shall forfeit the privilege of accepting new business until the delinquency is corrected. The commissioner may refuse to accept an audit or order a new audit for any of the following reasons: (1) Adverse result in any proceeding before the California Board of Accountancy affecting the auditor’s license. (2) The auditor has an affiliation with the purchasing alliance or any of its officers or directors that could prevent his or her reports on the purchasing alliance from being reasonably objective. (3) The auditor has been convicted of any misdemeanor or felony based on his or her activities as an accountant. (4) Judgment adverse to the auditor in any civil action finding him or her guilty of fraud, deceit, or misrepresentation in the practice of his or her profession. (b) Financial and performance audits or examinations of the purchasing alliance shall be conducted by the commissioner once every two years. The cost of the examinations or audits are to be paid by the purchasing alliance. The commissioner may impose conditions on registration, or continued registration to remedy compliance or performance problems. (c) At any time the commissioner determines, after notice and hearing, that a purchasing alliance registered under this article has willfully failed to comply with any of the provisions of this section, the commissioner shall make his or her order prohibiting the purchasing alliance from conducting its business for a period not to exceed one year. Any purchasing alliance violating an order made under this subdivision is subject to seizure under Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1, is guilty of a misdemeanor, and may have its certificate of registration revoked by the commissioner. Any person aiding and abetting any purchasing alliance in violation of that order is guilty of a misdemeanor. The purpose of this section is to maintain the solvency of the purchasing alliance subject to this article and to protect the public by preventing fraud and requiring fair dealing. The audit shall be designed to ensure that the purchasing alliance is not a risk-bearing entity, to ensure sound financial controls and money management, and to prevent mismanagement or misappropriation of funds either through neglect or malfeasance. In order to carry out those purposes the commissioner shall make reasonable rules and regulations to govern the conduct of the business of the purchasing alliance subject to this chapter. (d) The commissioner shall establish fees for initial registration of a purchasing alliance and for renewal of registration of a purchasing alliance in an amount sufficient to cover the costs of administering this chapter. A purchasing alliance shall pay the initial registration fee at the time of application for registration, and the renewal fee at the time of application for renewal. (Amended by Stats. 2000, Ch. 1055, Sec. 49. Effective September 30, 2000.)
  90. 10822.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

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    After a certificate of registration is issued or reissued, the holder must keep complying with the business requirements in this chapter, related sections of the code, and other California laws.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10822. After the issuance or reissuance of a certificate of registration to act as a purchasing alliance, the holder shall continue to comply with the requirements as to its business set forth in this chapter and in the other applicable sections of this code, and in the other laws of this state. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  91. 10823.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

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    This section lists grounds on which the commissioner may deny, nonrenew, suspend, or revoke an application or existing certificate of registration, after notice and a hearing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10823. In addition to any other grounds specified in this chapter, the following constitute grounds for denial, nonrenewal, suspension, or revocation of an application or existing certificate of registration, following notice and an opportunity for hearing: (a) Failure to comply with the provisions of this chapter. (b) Failure to disclose a preexisting oral or written agreement during the alliance application process. (c) Failure to fairly and affirmatively offer, market, and sell all of the health benefit plan designs offered through a purchasing alliance that are sold or offered to small employers to all small employers. (d) Failure to have adequate controls or failure to follow approved procedures. (e) Failure to meet minimum standards in a financial or performance audit or examination. (f) Failure to comply with a lawful order of the commissioner. (g) Committing an unfair or deceptive act or practice as defined in Section 17200 of the Business and Professions Code or under Chapter 6.5 (commencing with Section 790) of Part 2 of Division 1. (h) Filing any necessary form with the commissioner that contains fraudulent information or omission. (i) Misappropriation, conversion, illegal withholding, or refusal to pay over upon proper demand any moneys that belong to a person or participating carrier otherwise not entitled to the alliance and that have been entrusted to the alliance in its fiduciary capacity. (j) Operation of the purchasing alliance that is at variance with the basic organizational documents as filed pursuant to this chapter or as published by the purchasing alliance, or in any manner contrary to that described in, or reasonably inferred from, the purchasing alliance’s application for certification and annual report, or any modification thereof, unless amendments allowing the variation have been submitted to, and approved by, the commissioner pursuant to this chapter. (k) The continued operation of the purchasing alliance will constitute a substantial risk to its subscribers and enrollees. (l) The purchasing alliance has violated, attempted to violate, or conspired to violate, directly or indirectly, or assisted in or abetted a violation or conspiracy to violate any provision of this chapter or any rule or regulation adopted by the commissioner pursuant to this chapter. (m) The purchasing alliance has permitted, or aided or abetted, any violation by an employee or contractor who is a holder of any license, certificate, permit, or registration issued pursuant to the Business and Professions Code, the Health and Safety Code, or this code, which violation would constitute grounds for discipline against that licensee, or certificate, permit, or registration holder. (n) The purchasing alliance has aided, abetted, or permitted the commission of any illegal acts. (o) The purchasing alliance, its management company, or any other affiliate of the purchasing alliance, or any controlling person, officer, director, or other person occupying a principal management or supervisory position in the purchasing alliance, management company, or affiliate, has been convicted or pleaded no contest to a crime, or committed any act involving dishonesty, fraud, or deceit, which crime or act is substantially related to the qualifications, functions, or duties of that person under this chapter. The commissioner may revoke or deny a certificate issued under this chapter irrespective of a subsequent order under Section 1203.4 of the Penal Code. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  92. 10824.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    The commissioner can discipline a purchasing alliance for certain violations, must notify the alliance of suspension or bar orders, and a purchasing alliance may not enroll new employers after receiving notice of such an order.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10824. (a) The commissioner may take disciplinary action against a purchasing alliance if the commissioner determines that the purchasing alliance has committed any of the acts set forth in Section 10823. The disciplinary action may include censuring the purchasing alliance, or prohibiting for a period not exceeding 24 months or barring permanently, a person, partnership, corporation, or trust from acting as a purchasing alliance. (b) The commissioner shall notify the purchasing alliance of any order that suspends or bars a person from engaging in operations as a purchasing alliance. It shall be unlawful for any purchasing alliance, after receipt of notice of the order, to enroll any new employers or small employers. (c) The commissioner may prohibit any person from serving as an officer, director, employee, or associate of any purchasing alliance or solicitor firm of any purchasing alliance, or any management company of any purchasing alliance, or as a solicitor or agent if any of the following applies: (1) The prohibition is in the public interest and the person has committed or caused, participated in, or had knowledge of, and failed to properly report a violation of this chapter by a purchasing alliance, management company, or solicitor firm. (2) The person was an officer, director, employee, associate, or provider of a purchasing alliance or of a management company or solicitor firm of any purchasing alliance whose certificate has been suspended or revoked pursuant to this section and the person had knowledge of and failed to report, or participated in, any of the prohibited acts for which the certificate was suspended or revoked. (3) The person was an officer director, employee, or associate of a purchasing alliance that has been the subject of an order of suspension or bar from engaging in operations as a purchasing alliance under this section and the person had knowledge of, or participated in, any of the prohibited acts for which the order was issued. A proceeding for the issuance of an order under this subdivision may be included with a proceeding against a purchasing alliance under this section, or may conduct a separate proceeding. (4) The person has been convicted or pleaded no contest to a crime, or committed any act involving dishonesty, fraud, or deceit, which crime or act is substantially related to the qualifications, functions, or duties of the person under this chapter. (d) Any disciplinary action under Section 10823 and this section shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  93. 10825.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A purchasing alliance may ask the commissioner to restore a revoked or long-suspended certificate, but the commissioner can refuse to consider the petition if the petitioner is under certain criminal sanctions. The commissioner may also set the petition form, charge a filing fee up to $1,000, and require extra information, unpaid assessments, or a new registration application in some cases.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10825. (a) A purchasing alliance whose certificate has been revoked or suspended for more than one year may petition the commissioner to reinstate the certificate as provided by Section 11522 of the Government Code. No petition may be considered if the petitioner is under criminal sentence for a violation of this chapter, or for any offense that would constitute grounds for discipline or denial of registration under this chapter, including any period of probation or parole. (b) A purchasing alliance that is barred or suspended for more than one year from acting as such, or that is subject to an order imposing discipline that by its terms is effective for more than one year, may petition the commissioner to reduce by order the penalty in a manner generally consistent with the provisions of Section 11522 of the Government Code. No petition may be considered if the petitioner is under criminal sentence for a violation of this chapter, or for any offense that would constitute grounds for discipline or denial of registration under this chapter, including any period of probation or parole. (c) The petition for restoration shall be in the form prescribed by the commissioner and the commissioner may condition the granting of the petition on any additional information and undertakings that the commissioner may require in order to determine whether the purchasing alliance, if restored, would engage in business in full compliance with the objectives and provisions of this chapter and the rules and regulations adopted by the commissioner under this chapter. (d) The commissioner may prescribe a fee not to exceed one thousand dollars ($1,000) for the filing of a petition for restoration pursuant to this section. In addition, the commissioner may condition the granting of the petition to a purchasing alliance upon payment of the assessment due and unpaid as of December 15 during the preceding 12-calendar-month period, and if the purchasing alliance’s suspension or revocation was in effect for more than 12 months, upon the filing of a new application for registration as a purchasing alliance and the payment of the fee for certification. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  94. 10826.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    Violators of this chapter or related rules/orders may owe a civil penalty of up to $2,500 per violation, enforced by the commissioner; enforcement remedies are cumulative, and actions must be brought within four years.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 3. Regulation [10820 - 10826] ( Article 3 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10826. (a) Any person who violates any provision of this chapter, or who violates any rule or order adopted or issued pursuant to this chapter, shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the state by the commissioner in any court of competent jurisdiction. (b) As applied to the civil penalties for acts in violation of this chapter, the remedies provided by this article and by other sections of this chapter are not exclusive, and may be sought and employed in any combination to enforce this chapter. (c) No action may be maintained to enforce any liability created under article unless brought before the expiration of four years after the act or transaction constituting the violation. (d) The commissioner shall be able to recover the costs of investigating an alleged violation of this chapter in which a violation has been determined. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  95. 10830.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 4. Conflicts of Interest [10830- 10830.] ( Article 4 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    People connected to a private health care purchasing alliance are barred from working with, representing, or being affiliated with insurers, agents, brokers, or health care providers, and from tying compensation or steering decisions to listed health or location factors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 4. Conflicts of Interest [10830- 10830.] ( Article 4 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10830. No owner, officer, partner, or board members or members of their household nor any management personnel of the alliance may be employed by, be a consultant for, be a member of the board of directors of, be affiliated with an agent of, or otherwise be a representative of any carrier or other insurer, agent or broker, or a health care provider. This provision shall not preclude any of the above from purchasing coverage through an alliance. Any employee of a purchasing alliance and any person or organization having any ownership interest in a purchasing alliance or any organization the alliance contracts with for marketing purposes shall be prohibited from receiving compensation based upon the health status, claims experience, industry, occupation, or geographic location of participating employers or small employers or the participating employer’s or small employer’s employees exclusive of a compensation arraignment that provides compensation on the basis of a percentage of premium, provided that the percentage shall not vary because of health status, industry, occupation, medical utilization, claims experience, or geographic location within a service region. Those employees, persons, and organizations are expressly prohibited from receiving compensation based upon a participating carrier’s loss ratio resulting from the carrier’s participation in the purchasing alliance. Additionally, any employee of a purchasing alliance and those persons or organizations having an ownership interest in the purchasing alliance shall be prohibited from encouraging or directing employers or small employers to seek coverage from a source other than the alliance because of the health status, claims experience, industry, occupation, or geographic location of the employer or small employer or the employer’s or small employer’s employees. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  96. 10840.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A purchasing alliance must follow detailed rules for fees, participation, contracting, reporting, and administration, and it must not set fees based on certain health or location factors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10840. A purchasing alliance shall do all of the following: (a) Set reasonable fees, which may vary by employer or small employer size, in the purchasing alliance that will finance reasonable and necessary costs incurred in marketing, selling, servicing, and administering the purchasing alliance. Fees may not vary based upon the small employer or his or her enrollees and dependents’ actual or expected health status, medical utilization, claims experience, industry, occupation, or the geographic location of participating small employers within the same service region. (b) Define, market, offer, and sell to small employers the health benefit plans purchased from participating carriers. The purchasing alliance may also incidentally offer optional ancillary benefit plans. The purchasing alliance may also define, market, and offer health benefit plans and ancillary benefit plans to employers. (c) Require as a condition of participation that all employers or small employers include all their eligible employees or a minimum percentage of eligible employees in coverage purchased through the purchasing alliance. (d) With respect to small employers, the purchasing alliance shall require that the application of participation requirements be uniformly applied to all small employers. (e) Provide premium collection services for health benefit plans and ancillary benefit plans offered through the purchasing alliance. (f) Establish administrative and accounting procedures for operating the purchasing alliance and for services to employers and small employers and enrollees, including billing, administration, underwriting, marketing, enrollment, sales, regulatory compliance, and ensuring carrier and member compliance with the purchasing alliance requirements. (g) Establish rules, conditions, and procedures for participating members. The rules, conditions, and procedures for participating small employers shall be uniformly applied. (h) Establish rules, conditions, and procedures for participating carriers. (i) Reject or allow a participating carrier to reject an employer or small employer from participation or drop or allow a participating carrier to drop a participating employer if the participating employer or any of its eligible employees fail to pay premiums, or if the participating employer fails to maintain the minimum participation and contribution requirements or if the participating employer has engaged in fraud or material misrepresentation in connection with a health benefit plan or ancillary benefit plan purchased through the purchasing alliance. If a participating employer or enrollee is dropped from coverage, the enrollee shall be entitled to continuation and conversion coverage to the extent provided for under applicable state or federal continuation laws and the state conversion law. (j) Contract with at least three unaffiliated participating carriers offering health benefit plans to provide benefits in all regions of the state in which each carrier is licensed to operate and together to provide health benefit plans throughout all service regions in this state to ensure that enrollees have a personal choice from among a reasonable number of competing carriers. The commissioner may, upon a showing of good cause, waive the requirement to have at least three unaffiliated participating medical carriers. (k) Fairly and affirmatively offer, market, and sell all the health benefit plans sponsored by the purchasing alliance that are sold or offered to small employers to all small employers, in all service regions. In addition, the alliance shall require all participating carriers to make their purchasing alliance products available in all portions of each of the alliances service regions where the carrier offers health care benefits. (l) Be registered to operate in all service regions in this state and throughout each service region. (m) Develop standard enrollment procedures. (n) Publish educational materials, plan descriptions, and comparison sheets describing participating carriers and the benefit plan designs available through the purchasing alliance for use in enrolling employers or small employers and their eligible employees. The information may include an assessment of utilization management procedures and the level of quality and cost-effective care. (o) Establish conditions for participation of employers or small employers that conform to the requirements of this chapter and that include, but are not limited to, assurances that the employer or small employer is a bona fide employer or small employer group and provision for prepayment of premiums or other mechanisms to ensure that payment will be made for coverage. Conditions for participating small employers shall be uniformly applied to all small employers. (p) Provide that each eligible employee may choose from any participating medical carrier as long as the participating carrier provides coverage where the employee works or lives. (q) Receive, review, and act, as appropriate, on grievances by participating employers or enrollees. (r) Review information and recommendations from consumers, employers, small employers, participating carriers, health care providers, and other sources. After the review, the board may issue reports or otherwise make recommendations to improve the delivery or purchase of health care. (s) Establish administrative and accounting procedures for operating the purchasing alliance and for providing services to employers, small employers, and enrollees. (t) Prepare an annual report on the operations of the purchasing alliance to the commissioner, which shall include an accounting of all outside revenues received by the board and internal and independent audits and any other information the commissioner may require. (u) Establish procedures for billing and collection of premiums from employers and small employers, including any share of the premium paid by enrollees. (v) Establish procedures for annual open enrollment periods during which an employee enrolled in a health benefit plan through the purchasing alliance may elect to enroll in any health benefit plan that is available to that size group through the purchasing alliance, and that provides health coverage where the employee lives or works and during which any enrollee may elect to enroll in any health benefit plan that is available to that size group through the purchasing alliance, and that provides health coverage where the enrollee lives or works. For purposes of this subdivision, “size group” refers to whether the employer is a small employer or any other employer covered by this chapter. (w) Provide that in the event an employer or small employer terminates coverage purchased through the purchasing alliance, the former employer or small employer shall be ineligible to purchase a health benefit plan or ancillary benefit plan through the purchasing alliance for a period determined by the alliance, but not to exceed 12 months. (x) Maintain a trust account or accounts in a California bank for deposit of all moneys received and collected for operation of the purchasing alliance. A purchasing alliance, its owners, operators, partners, board members, employees, and agents shall have a fiduciary duty with respect to all moneys received or owed to it to ensure payment of its obligations and a full accounting to its participating employers, health plans, and the commissioner. (y) With respect to small employers, ensure that all carrier rates for purchasing alliance small group health benefit plans are consistent with the requirements of Sections 1357.12 and 1357.13 of the Health and Safety Code and Sections 10714 and 10715. (z) Treat all members within an employer or small employer group equally with regard to administrative fees and benefits of participation. (aa) Every purchasing alliance shall offer at least one health plan that compensates its providers on an other than capitated basis in every region in which the alliance operates. (ab) Have the authority to develop or contract for the development of uniform standards for data to be provided by participating carriers and providers. The purchasing alliance may collect or contract for the collection of data necessary for evaluation of the performance of participating carriers and their provider networks by consumers, providers, employers, small employers, and the commissioner. In formulating data collection standards, the board may use standards based on, and consistent with, existing state, National Association of Insurance Commissioners, and national health care data collection initiatives, and shall take into account their feasibility and cost-effectiveness. (ac) Not expend for administrative purposes and profits in any fiscal year an excessive amount of the aggregate premiums, fees, and other periodic payments received by the purchasing alliance for providing health benefits to employers, small employers, and their employees, through a contract with participating carriers. As used in this subdivision, “administrative costs” includes costs in connection with marketing and sales of the health benefit plans offered by the purchasing alliance. (ad) Exercise all powers reasonably necessary to carry out the powers and responsibilities expressly granted or imposed by this chapter. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  97. 10841.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A purchasing alliance must follow the listed requirements for small-employer underwriting, rating, renewal, marketing, and participation practices.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10841. (a) A purchasing alliance shall comply with all requirements pertaining to the underwriting, rating and renewal practices for small employers, pursuant to subdivisions (a) and (b) of Section 1357.12 of , and subdivision (f) of Section 1357.03 of, the Health and Safety Code, and subdivisions (a) and (b) of Section 10714. (b) A purchasing alliance shall comply with all requirements pertaining to the marketing practices for small employers who participate in the purchasing alliance, pursuant to subdivision (d) of Section 1357.03 of the Health and Safety Code and subdivisions (f) and (j) of Section 10705. (c) A purchasing alliance shall comply with all requirements pertaining to the participation requirements for small employers who participate in the purchasing alliance, pursuant to subdivision (b) of Section 1357.03 of the Health and Safety Code and Section 10706. A carrier participating in a purchasing alliance shall be deemed to be in compliance with this requirement. (Amended by Stats. 1999, Ch. 83, Sec. 127. Effective January 1, 2000.)
  98. 10842.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A purchasing alliance may carry out listed activities, including contracting for services, hiring staff, suing or being sued, choosing benefit plan options, enrolling eligible employees, contracting with agents or brokers, and excluding or freezing carriers that fail standards. It may not vary agent or broker compensation based on certain health-related or location factors, except for a percentage-of-premium arrangement that also does not vary on those factors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10842. A purchasing alliance may do any of the following: (a) Contract with qualified independent third parties for any services necessary to carry out the powers and duties authorized or required by this chapter. (b) Employ necessary staff. (c) Sue or be sued, including taking any legal actions necessary or proper for recovering any penalties for or on behalf of the health insurance purchasing group. (d) Allow a participating employer to choose the benefit plan design, from those offered by the purchasing alliance, to be made available to their eligible employees. (e) Allow eligible employees to enroll in any benefit plan design offered by the purchasing alliance. (f) Contract with licensed insurance agents or brokers to market and service coverage made available through the purchasing alliance to its members. Compensation for agents and brokers may not vary based on the small employer or his or her enrollees and dependents’ actual or expected health status, industry, occupation, medical utilization, claims experience, or geographic location within the service region. This subdivision shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker on the basis of percentage of premium; provided that percentage shall not vary because of the health status, industry, occupation, medical utilization, claims experience, or geographic location within the service region. (g) Exclude a carrier or freeze enrollment in a carrier for failure to achieve established quality, access, or information reporting standards of the purchasing alliance. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  99. 10843.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A purchasing alliance is barred from doing several things, including directly providing or contracting for health care services, excluding eligible small employers or employees who meet the membership terms, charging unrelated fees, or using practices that steer risk pools or conflict with state law.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10843. A purchasing alliance shall not do any of the following: (a) Purchase health care services, assume risk for the cost or provision of health services, or otherwise contract with health care providers for the provision of health care services directly to enrollees. (b) Exclude a small employer or eligible employee or dependent of an eligible employee of a small employer from membership in the purchasing alliance who agrees to pay fees for membership and the premium for coverage through the purchasing alliance and who abides by the bylaws and rules of the purchasing alliance. (c) Prohibit the participation of small employers, as described in subdivision (a) of Section 1357.03 of the Health and Safety Code and in subdivision (b) of Section 10705, or utilize risk adjustment practices that conflict with the small employer group health provisions described in subdivisions (a) and (b) of Section 1357.12 of the Health and Safety Code and subdivision (b) of Section 10714. (d) Charge a fee not directly related to the operation of the purchasing alliance. (e) As a condition of participation, require an employer or small employer, eligible employee or dependent to subscribe to nonhealth care or nonhealth insurance related products or services. (f) Operate the purchasing alliance or market the purchasing alliance in a service region in a way that would cause the purchasing alliance to select a risk pool with health care utilization that is significantly below the average for all similar groups with similar coverage in the same region. (g) Engage in any competitive act or practice that results in the selection of small employers and his or her enrollees and dependents based on actual or expected health status, claims experience, medical utilization, industry, occupation, or geographic location within the service region. (h) Require or take any action inconsistent or in conflict with state laws or regulations. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  100. 10844.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A purchasing alliance may offer coverage under Chapter 9.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10844. A purchasing alliance may offer coverage pursuant to Chapter 9.5 (commencing with Section 10900). (Added by Stats. 2000, Ch. 810, Sec. 4. Effective January 1, 2001.)
  101. 10845.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    Purchasing alliances must file and keep a service-of-process agent on record with the commissioner, update the agent promptly if it changes, and pay a $45 filing fee for later agent filings.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 5. Additional Powers of and Restrictions on Purchasing Alliances [10840 - 10845] ( Article 5 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10845. (a) The commissioner shall require every purchasing alliance, as a condition precedent to receiving and holding a certificate of registration, to file and maintain in the commissioner’s office a writing designating an agent for service of process. The writing shall state the name of the agent and his or her place of business in this state with sufficient particularity so that he or she can readily be found by peace officers or process servers. Appointment of the agent reasonably available for service of papers, notice, proof of loss, summons or other process during business hours shall be continuously maintained by every registered purchasing alliance subject to this article while it holds a valid and unrevoked certificate of registration. (b) An agent designated by a purchasing alliance as provided in this article may file with the commissioner a written statement of resignation as that agent, which shall be signed and execution thereof shall be duly acknowledged by the agent. Thereupon, the authority of the agent to act in such capacity shall cease and the commissioner shall forthwith give written notice of the resignation by mail to the purchasing alliance addressed to its principal office as shown by the commissioner’s records. If an agent who has been appointed by a purchasing alliance as provided by this article dies or resigns or removes his or her residence from the state, the purchasing alliance shall forthwith file with the commissioner an appointment of a new agent on a form provided by the commissioner for such purpose and pay the filing fee therefor, and the filing shall be deemed to revoke any prior designation of agent. (c) No fee shall be charged, except as included in the application for certificate of registration fee provided in this article, for filing the initial appointment under this article by an applicant for registration. Thereafter the commissioner shall require the payment of forty-five dollars ($45) in advance as a fee for filing appointment of agent or stipulation or both by every registered purchasing alliance. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  102. 10850.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A carrier can qualify as a participating carrier only if it meets specified operating characteristics that satisfy the board.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10850. (a) In order to be eligible to be a participating carrier, a carrier shall demonstrate the following operating characteristics satisfactory to the board: (1) Be licensed and approved as a carrier and in good standing with the appropriate regulatory authority. (2) The ability to provide data required by the board, including information on enrollee satisfaction based on standard surveys, as may be prescribed, and to meet reasonable satisfaction measures as may be established. (3) The ability to provide standard data elements in a manner prescribed by the board. (4) All other criteria established by the board. (b) Carriers that contract with or employ health care providers shall have mechanisms to accomplish all of the following in a manner satisfactory to the purchasing alliance, provided that the requirements of the alliance do not conflict with the carrier’s licensing requirements: (1) Review the quality of care covered. (2) Review the appropriateness of care covered. (3) Provide accessible health care services. (c) In evaluating which carriers may participate in the purchasing alliance, the board shall consider all of the following: (1) Minimum geographic service and participation requirements, maximum thresholds for premium rates, and standards for determining whether a carrier operates efficiently. (2) The ability of a carrier to provide services within the purchasing alliance service regions. (3) Pricing and the competitiveness of each bid from a carrier. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  103. 10851.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    Participating carriers must meet board standards, provide required data, and follow applicable coverage and risk-rating rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10851. Every participating carrier shall: (a) Meet the standards established by the board pursuant to this chapter. (b) Provide any data required by the board. (c) Comply with, all applicable laws and regulations that regulate health care coverage or medical benefits provided to employers, including, with respect to coverage that is provided to small employers, Chapter 8 (commencing with Section 10700) for insurers and Article 3.1 (commencing with Section 1357) of Chapter 2.2 of Division 2 of the Health and Safety Code for health care service plans. However, a carrier contracting to participate in a purchasing alliance shall be deemed to be in compliance with the requirements for small employers of subdivision (a) of Section 1357.03 of the Health and Safety Code and of subdivisions (b) and (c) of Section 10705 for a benefit plan design offered through the purchasing alliance in those service regions in which the carrier participates in the purchasing alliance and the benefit plan design is offered exclusively through the purchasing alliance. (d) Comply with all rules and regulations regarding the application of risk adjustment factors to standard risk rates for small employers as specified in subdivisions (a) and (b) of Section 1357.12 of the Health and Safety Code and subdivisions (a) and (b) of Section 10714 of this code. A participating carrier shall also comply with the requirements that coverage be issued to small employers on a guaranteed issue basis as is specified in subdivision (a) of Section 1357.03 of the Health and Safety Code and subdivision (b) of Section 10705 of this code for small employers. (e) All participating medical carriers shall, in determining small employer rates for health benefit plans offered through a purchasing alliance, use the six service regions established by this chapter in determining risk categories for standard employee risk rates. (f) Enroll and disenroll individuals as directed by the purchasing alliance or its designee. (g) Comply with any other requirement established by the board pursuant to this chapter. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  104. 10853.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    The purchasing alliance may set performance standards and penalties in contracts with participating carriers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10853. In contracts with participating carriers, the purchasing alliance may establish performance standards for specific contractual elements and penalties for failure to fulfill specific contractual obligations. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  105. 10854.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A participating carrier is not barred from contracting with certain health care providers or from setting reimbursement methodology.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10854. Nothing in this chapter shall prohibit a participating carrier from contracting with particular health care providers or types, classes, or categories of health care providers or setting reimbursement methodology. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  106. 10855.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    A participating carrier that ends its agreement with a purchasing alliance must give notice to the board and also give notice to employers or small employers and enrollees at least 180 days before any nonrenewal. If the carrier does not renew a health benefit plan with the alliance, it may not write new business through the alliance for three years, unless earlier invited back with the commissioner’s concurrence.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10855. In the event the participating carrier elects to terminate its participating agreement with a purchasing alliance, the participating carrier shall do both of the following: (a) Provide advance notice of its decision to the board. (b) Provide notice of the decision at least 180 days prior to the nonrenewal of any health benefit plan or ancillary benefit plan to employers or small employers and enrollees. A participating carrier that elects not to renew a health benefit plan with a purchasing alliance shall be prohibited from writing new business through the purchasing alliance for a period of three years from the date of the notice to the purchasing alliance or until the purchasing alliance, with the concurrence of the commissioner, invites the former participating carrier to renew participation, whichever is sooner. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  107. 10856.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    This article does not limit the Department of Managed Health Care’s or Department of Insurance’s existing regulatory authority, and the article’s requirements must not conflict with a participating carrier’s licensing requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 6. Participating Carriers [10850 - 10856] ( Article 6 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10856. Nothing in this article shall be construed to limit the existing regulatory authority of the Department of Managed Health Care to regulate health care service plans or of the Department of Insurance to regulate disability or life insurers or hospital service plans. None of the requirements of this article shall conflict with the participating carrier’s licensing requirements. (Amended by Stats. 2000, Ch. 857, Sec. 72. Effective January 1, 2001.)
  108. 10860.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 7. Contracts with Employers, Small Employers, and Participating Carriers [10860 - 10861] ( Article 7 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    Contracts between the purchasing alliance and participating carriers must specify how premiums will be transmitted and set out payment penalties and grace periods.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 7. Contracts with Employers, Small Employers, and Participating Carriers [10860 - 10861] ( Article 7 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10860. Contracts between the purchasing alliance and participating carriers shall specify how all premiums will be transmitted, and penalties and grace periods for payments. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  109. 10861.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 7. Contracts with Employers, Small Employers, and Participating Carriers [10860 - 10861] ( Article 7 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    Purchasing alliance contracts must cover the alliance’s administrative role, require a coverage certificate from the participating carrier, and provide a required notice at enrollment.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 7. Contracts with Employers, Small Employers, and Participating Carriers [10860 - 10861] ( Article 7 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10861. Contracts between purchasing alliances and participating employers shall provide all of the following: (a) For administrative purposes, the purchasing alliance shall be the policyholder or contractholder of the health benefit plan or ancillary benefit plan on behalf of participating employers, their eligible employees, and dependents. (b) That the participating carrier will issue a certificate of coverage, or equivalent document, specifying the essential features of the health benefit plan’s or ancillary benefit plan’s coverage to each enrolled eligible employee. (c) The following notice shall be provided to employers, small employers, and eligible employees who obtain coverage from a purchasing alliance at the time of enrollment: ## NOTICE (1) THE PURCHASING ALLIANCE IS NOT AN INSURANCE COMPANY AND DOES NOT PAY BENEFITS OR CLAIMS. IT COLLECTS AND DISTRIBUTES PREMIUMS IN YOUR EMPLOYER’S BEHALF TO INSURERS WHO MAY PARTICIPATE IN A GUARANTEE FUND CREATED BY CALIFORNIA LAW. THE ALLIANCE ITSELF DOES NOT PARTICIPATE IN A GUARANTEE FUND CREATED BY CALIFORNIA LAW. (2) THE PURCHASING ALLIANCE WHICH YOUR EMPLOYER HAS JOINED IS REGISTERED BY THE CALIFORNIA DEPARTMENT OF INSURANCE TO PROVIDE SPECIFIC ADMINISTRATIVE SERVICES AND MAY NOT ASSUME ANY RISK FOR CLAIM AND BENEFIT PAYMENTS. (3) FOR ADDITIONAL INFORMATION ABOUT THE PURCHASING ALLIANCE YOU SHOULD ASK QUESTIONS OF YOUR BENEFITS ADMINISTRATOR OR YOU MAY CONTACT THE CALIFORNIA DEPARTMENT OF INSURANCE AT 1-800-927-4356. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  110. 10870.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    The board must establish marketing standards for participating carriers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10870. The board shall establish marketing standards to be used by participating carriers. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  111. 10871.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    Marketing, advertisement, or educational material for certain health benefit plans sold through the purchasing alliance must be approved by the board before use.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10871. Any marketing, advertisement, or educational material for health benefit plans or ancillary benefit plans sold through the purchasing alliance shall be approved by the board prior to its use. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  112. 10872.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    This article says it does not force or forbid a purchasing alliance or participating carrier from using an agent or broker.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10872. This article shall not be construed to prohibit or to compel the purchasing alliance or a participating carrier from using the services of an agent or broker. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  113. 10873.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    Certain insurance market participants may not use marketing practices that encourage small employers or eligible enrollees to make plan choices based on health status, claims experience, industry, occupation, or geographic location.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 8. Marketing [10870 - 10873] ( Article 8 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10873. (a) A participating carrier, agent, broker, contractor, or producer of a participating carrier, or independent insurance agent, broker, contractor, or producer may not engage, directly or indirectly, in an activity or marketing practice that would encourage small employers or eligible enrollees to do any of the following: (1) Refrain from enrolling in a health benefit plan offered through the purchasing alliance because of their health status, claims experience, industry, occupation, or geographic location within the service region. (2) Seek coverage from other participating carriers because of their health status, claim experience, industry, occupation, or geographic location within the service region. (3) Enroll or fail to enroll in the purchasing alliance because of their health status, claims experience, industry, occupation, or geographic location within the service region. (b) In the event that an agent, broker, contractor, carrier, or producer of a participating carrier fails to abide by these provisions, they shall be subject to the penalties and fines described in Section 10718. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  114. 10880.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 9. Solvency [10880- 10880.] ( Article 9 added by Stats. 1996, Ch. 916, Sec. 1. )

    Verify source ↗

    If a purchasing alliance becomes insolvent, the commissioner must keep jurisdiction over it to protect enrollees and may take steps to preserve coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 9. Solvency [10880- 10880.] ( Article 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10880. In the event a purchasing alliance becomes insolvent, the commissioner shall maintain jurisdiction of the alliance for purposes of protection of the interests of the alliance enrollees. In that event, the commissioner may do any of the following: (a) Arrange for transfer of coverage from the insolvent purchasing alliance to one that is deemed to be solvent by the commissioner. (b) Arrange for individual employers or small employers participating in the purchasing alliance to obtain coverage through one or more participating carriers outside of an alliance arrangement. (c) Take any other actions necessary to preserve the coverage provided to employers, small employers, and enrollees in the insolvent alliance. (d) In any proceedings under this article, the costs of employing special deputy commissioners, clerks, or assistants appointed to carry out this article, and all expenses of taking possession of, conversing, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the alliance under this article, shall be fixed by the commissioner, subject to the approval of the court, and shall be paid out of the assets of the alliance to the department. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  115. 10885.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 10. Exemptions [10885 - 10887] ( Article 10 added by Stats. 1996, Ch. 916, Sec. 1. )

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    Purchasing alliances are exempt from licensure as a health care service plan or solicitor under the cited Health and Safety Code chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 10. Exemptions [10885 - 10887] ( Article 10 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10885. Purchasing alliances shall be exempt from requirements of licensure as a health care service plan or solicitor under Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  116. 10886.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 10. Exemptions [10885 - 10887] ( Article 10 added by Stats. 1996, Ch. 916, Sec. 1. )

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    A purchasing alliance is treated as providing administrative services for carrier product disclosure, does not have to summarize plans offered by outside participating carriers, and must provide a summary brochure of all benefit plan designs it offers to employers or small employers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 10. Exemptions [10885 - 10887] ( Article 10 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10886. For purposes of carrier product disclosure, a purchasing alliance shall be considered an entity that provides administrative services, as is described in paragraph (1) of subdivision (d) of Section 10705. As such, a purchasing alliance shall not be required to provide a summary of those plans offered by participating carriers outside of the purchasing alliance with whom they have contracted. A purchasing alliance shall be required to provide a summary brochure of all benefit plan designs that the purchasing alliance offers to employers or small employers. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  117. 10887.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 10. Exemptions [10885 - 10887] ( Article 10 added by Stats. 1996, Ch. 916, Sec. 1. )

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    This section exempts certain licensed health care service plans from this chapter when they act within their license and do not contract with a registered purchasing alliance, except as stated in Section 10820(c).

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9. The Private Health Care Voluntary Purchasing Alliance Act [10800 - 10887] ( Chapter 9 added by Stats. 1996, Ch. 916, Sec. 1. ) ## ARTICLE 10. Exemptions [10885 - 10887] ( Article 10 added by Stats. 1996, Ch. 916, Sec. 1. ) ## 10887. Except as provided in subdivision (c) of Section 10820, nothing in this chapter shall apply to a health care service plan licensed under the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of the Health and Safety Code) when operating within the scope of that license and not contracting with a purchasing alliance registered under this chapter. (Added by Stats. 1996, Ch. 916, Sec. 1. Effective January 1, 1997.)
  118. 109.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    Workers’ compensation insurance includes coverage for employer liability to pay employees and their dependents for work-related injury, even if no one was negligent.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 109. Workers’ compensation insurance includes insurance against loss from liability imposed by law upon employers to compensate employees and their dependents for injury sustained by the employees arising out of and in the course of the employment, irrespective of negligence or of the fault of either party. (Amended by Stats. 2018, Ch. 231, Sec. 2. (AB 2045) Effective January 1, 2019.)
  119. 1090.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 16. Approval of Reinsurance Plans [1080 - 1091] ( Article 16 enacted by Stats. 1935, Ch. 145. )

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    An insurer in these conditions may not reinsure its business until its reinsurance plan is submitted to the commissioner and approved.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 16. Approval of Reinsurance Plans [1080 - 1091] ( Article 16 enacted by Stats. 1935, Ch. 145. ) ## 1090. An insurer which is insolvent, retiring from business in this state other than by merger or consolidation into an admitted insurer with the commissioner’s prior written consent, or the required paid-in capital of which is impaired, shall not reinsure its business until its plan to effect such reinsurance is first submitted to the commissioner and approved by him. (Amended by Stats. 1969, Ch. 1055.)
  120. 10900.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    This section defines key terms used in this chapter on individual access to health care service contracts.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10900. As used in this chapter: (a) “Benefit plan design” means a specific health coverage policy issued by a carrier to individuals, to trustees of associations that cover individuals. It includes services covered and the levels of copayment and deductibles, and it may include the professional providers who are to provide those services and the sites where those services are to be provided. A benefit plan design may also be an integrated system for the financing and delivery of quality health services that has significant incentives for the covered individuals to use the system. (b) “Carrier” means any disability insurance company or any other entity that writes, issues, or administers health benefit plans, as defined in subdivision (a) of Section 10198.6, that cover individuals, regardless of the situs of the contract or master policyholder. (c) “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 plans. The term includes continuation or conversion coverage but does not include accident only, credit, disability income, Champus supplement, 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 federal Medicare program pursuant to Title XVIII of the Social Security Act. (3) The medicaid program pursuant to Title XIX of the Social Security Act. (4) Any other publicly sponsored program, provided in this state or elsewhere, of medical, hospital, and surgical care. (5) 10 U.S.C.A. Chapter 55 (commencing with Section 1071) (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 5 U.S.C.A. Chapter 89 (commencing with Section 8901) (FEHBP). (9) A public health plan as defined in federal regulations authorized by Section 2701(c)(1)(l) of the Public Health Service Act, as amended by Public Law 104-191. (10) A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C.A. 2504(e)). (d) “Dependent” means the spouse or child of an eligible individual or other individual applying for coverage, subject to applicable terms of the health benefit plan covering the eligible person. (e) “Federally eligible defined individual” means an individual who as of the date on which the individual seeks coverage under this part, (1) has 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 an employer-sponsored health benefit plan, Medicare, or Medi-Cal, and has no other health insurance coverage, (3) was not terminated from his or her most recent creditable coverage due to nonpayment of premiums or fraud, and (4) if offered continuation coverage under COBRA or Cal-COBRA, had elected and exhausted such coverage. (f) “In force business” means an existing health benefit plan issued by a carrier to a federally eligible defined individual. (g) “New business” means a health benefit plan issued to an eligible individual that is not the carrier’s in force business. (h) “Preexisting condition provision” means a policy provision that excludes coverage for charges and expenses incurred during a specified period following the eligible individual’s effective date, 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. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  121. 10901.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    Carriers offering health benefit plans to individuals must comply with this chapter and the rules adopted under it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901. Every carrier offering health benefit plans to individuals shall comply with the provisions of this chapter and the rules adopted thereunder. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  122. 10901.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    This section says the chapter can still apply to certain associations, trusts, welfare arrangements, and related organizations or persons.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901.1. Nothing in this chapter 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, multiple employer welfare arrangement, or other organization or person presenting information regarding a health benefit plan to persons who may be interested in subscribing or enrolling in the plan. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  123. 10901.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    Carriers must offer and make available certain health plan designs to federally eligible defined individuals, and they may not reject qualifying applications or steer people away from applying for protected reasons.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901.2. (a) Commencing January 1, 2001, a carrier shall fairly and affirmatively offer, market, and sell the health benefit plan designs described in subdivision (d) of Section 10785 that are sold to individuals or to associations that include individuals to all federally eligible defined individuals in each geographic region in which the carrier provides coverage for health care services. Each carrier shall make available to each federally eligible defined individual the identified health benefit plan designs which the plan offers and sells to individuals or to associations that include individuals. (b) A carrier may not reject an application from a federally eligible defined individual for a benefit plan design under the following circumstances: (1) The federally eligible defined individual as defined by subdivision (e) of Section 10900 agrees to make the required premium payments. (2) The federally eligible defined individual, and his or her dependents who are to be covered by the carrier, work or reside in the service area in which the plan provides or otherwise arranges for the provision of health care services. (c) No carrier or agent or broker shall, directly or indirectly, encourage or direct federally eligible defined individuals to refrain from filing an application for coverage with a carrier because of health status, claims experience, industry, occupation, receipt of health care, genetic information, evidence of insurability, including conditions arising out of acts of domestic violence, disability, or geographic location provided that it is within the carrier’s approved service area. (d) No carrier shall, directly or indirectly, enter into any contract, agreement, or arrangement with an agent or broker that provides for or results in the compensation paid to a solicitor for the sale of a health benefit plan design to be varied because of health status, claims experience, industry, occupation, receipt of health care, genetic information, evidence of insurability, including conditions arising out of acts of domestic violence, disability, or geographic location of the individual. This subdivision shall not apply with respect to a compensation arrangement that provides compensation to an agent or broker on the basis of percentage of premium, provided that the percentage shall not vary for the reasons listed in this subdivision. (e) If a carrier enters into a contract, agreement, or other arrangement with a third-party administrator or other entity to provide administrative, marketing, or other services related to the offering of health benefit plans to individuals in this state, the third-party administrator shall be subject to this chapter. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  124. 10901.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    A carrier must tell a federally eligible defined individual the actual premium within 30 days after a completed application, and premium charges for certain plans are capped by age, family size, and year-based formulas. The individual also has time windows to buy coverage and change plans, and coverage effective dates depend on when payment or notice is delivered or postmarked.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901.3. (a) (1) After the federally eligible defined individual submits a completed application form for a health benefit plan, the carrier shall, within 30 days, notify the individual of the individual’s actual premium charges for that health benefit plan design. In no case shall the premium charged for any health benefit plan identified in subdivision (d) of Section 10785 exceed the following amounts: (A) For health benefit plans that offer services through a preferred provider arrangement, the average premium paid by a subscriber of the Major Risk Medical Insurance Program who is of the same age and resides in the same geographic area as the federally eligible defined individual. However, for a federally eligible defined individual who is between the ages of 60 and 64 years, inclusive, the premium shall not exceed the average premium paid by a subscriber of the Major Risk Medical Insurance Program who is 59 years of age and resides in the same geographic area as the federally eligible defined individual. (B) For health benefit plans identified in subdivision (d) of Section 10785 that do not offer services through a preferred provider arrangement, 170 percent of the standard premium charged to an individual who is of the same age and resides in the same geographic area as the federally eligible defined individual. However, for a federally eligible defined individual who is between the ages of 60 and 64 years, inclusive, the premium shall not exceed 170 percent of the standard premium charged to an individual who is 59 years of age and resides in the same geographic area as the federally eligible defined individual. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium rates. (2) A carrier may adjust the premium based on family size, not to exceed the following amounts: (A) For health benefit plans that offer services through a preferred provider arrangement, the average of the Major Risk Medical Insurance Program rate for families of the same size that reside in the same geographic area as the federally eligible defined individual. (B) For health benefit plans identified in subdivision (d) of Section 10785 that do not offer services through a preferred provider arrangement, 170 percent of the standard premium charged to a family that is of the same size and resides in the same geographic area as the federally eligible defined individual. (3) This subdivision shall become inoperative on January 1, 2014. This subdivision shall become operative on January 1, 2020. (b) (1) On and after January 1, 2014, after the federally eligible defined individual submits a completed application form for a health benefit plan, the carrier shall, within 30 days, notify the individual of the individual’s actual premium charges for that health benefit plan design. In no case shall the premium charged for any health benefit plan identified in subdivision (d) of Section 10785 exceed the following amounts: (A) With respect to the rate charged for coverage provided in 2014, the rate charged in 2013 for that coverage multiplied by 1.09. (B) With respect to the rate charged for coverage provided in 2015 and each subsequent year, the rate charged in the prior year multiplied by a factor of one plus the percentage change in the statewide average premium for the second lowest cost silver plan offered on the Exchange. The Exchange shall determine the percentage change in the statewide average premium for the second lowest cost silver plan by subtracting clause (i) from clause (ii) and dividing the result by clause (i). (i) The average of the premiums charged in the year prior to the applicable year for the second lowest cost silver plan in all 19 rating regions, with the premium for each region weighted based on the region’s relative share of the Exchange’s total individual enrollment according to the latest data available to the Exchange. (ii) The average of the premiums to be charged in the applicable year for the second lowest cost silver plan in all 19 rating regions, with the premium for each region weighted based on the region’s relative share of the Exchange’s total individual enrollment according to the latest data available to the Exchange. (C) The Exchange shall determine the percentage change in the statewide average premium no later than 30 days after the Exchange’s rates for individual coverage for the applicable year have been finalized. (2) For purposes of this subdivision, “Exchange” means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code. (3) This subdivision shall become operative on January 1, 2014, and shall become inoperative on January 1, 2020. (c) When a federally eligible defined individual 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 shall begin 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. (d) During the first 30 days after the effective date of the health benefit plan, the individual shall have the option of changing coverage to a different health benefit plan design offered by the same carrier. If the individual notified the plan of the change within the first 15 days of a month, coverage under the new health benefit plan shall become effective no later than the first day of the following month. If an enrolled individual notified the carrier of the change after the 15th day of a month, coverage under the health benefit plan shall become effective no later than the first day of the second month following notification. (e) (1) On and after January 1, 2014, and except as provided in paragraph (2), this section shall apply only to individual grandfathered health plans previously issued pursuant to this section to federally eligible defined individuals. (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), paragraph (1) shall become inoperative on the date of that repeal or amendment and this section shall apply to health benefit plans issued, amended, or renewed on or after that date. (3) For purposes of this subdivision, the following definitions apply: (A) “Grandfathered health plan” has the same meaning as that term is defined in Section 1251 of PPACA. (B) “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. (Amended by Stats. 2013, Ch. 441, Sec. 18. (AB 1180) Effective October 1, 2013.)
  125. 10901.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    Carriers and health benefit plans must not deny or limit coverage based on an eligible person's health condition or illness type.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901.4. A carrier may not exclude any federally eligible defined individual, or his or her dependents, who would otherwise be entitled to health care services, on the basis of an actual or expected health condition of that individual or dependent. No health benefit plan may limit or exclude coverage for a specific federally eligible defined individual, or his or her dependents, by type of illness, treatment, medical condition, or accident. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  126. 10901.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    The commissioner may stop a carrier from offering health benefit plans or taking applications if the carrier is financially too weak to serve enrollees, and the carrier must not resume until the commissioner says it is no longer financially impaired.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901.7. (a) The commissioner may require a carrier to discontinue the offering of health benefit plans or the acceptance of applications from any individual upon a determination by the commissioner that the plan carrier does not have sufficient financial viability, organization, and administrative capacity to assure the delivery of health care services to its enrollees. (b) The commissioner’s determination shall follow an evaluation that includes a certification by the commissioner that the acceptance of an application or applications would place the carrier in a financially impaired condition. (c) A carrier that has not offered coverage or accepted applications pursuant to this chapter shall not offer coverage or accept applications for any individual until the commissioner has determined that the carrier has ceased to be financially impaired. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  127. 10901.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    Health benefit plans offered to a federally eligible defined individual must be renewable, unless a listed exception applies.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901.8. All health benefit plans offered to a federally eligible defined individual shall be renewable with respect to the individual and dependents at the option of the enrolled individual except in cases of: (a) Nonpayment of the required premiums. (b) Fraud or misrepresentation by the enrolled individual. (c) The carrier ceases to provide or arrange for the provision of health care services for individual health benefit plan contracts in this state, provided, however, that the following conditions are satisfied: (1) Notice of the decision to cease new or existing individual health benefit plans in this state is provided to the commissioner and to the contractholder. (2) Individual health benefit plan contracts subject to this chapter shall not be canceled for 180 days after the date of the notice required under paragraph (1) and for that business of a carrier that remains in force, any carrier that ceases to offer for sale new individual health benefit plan contracts shall continue to be governed by this article with respect to business conducted under this chapter. (3) A carrier that ceases to write new individual business in this state after the effective date of this chapter shall be prohibited from offering for sale new individual health benefit plan contracts in this state for a period of three years from the date of the notice to the commissioner. (d) When a carrier withdraws a health benefit plan design from the individual market, provided that a carrier makes available to eligible individuals all health plan benefit designs that it makes available to new individual business, and provided that premium for the new health benefit plan complies with the renewal increase requirements set forth in Section 10901.9. (e) (1) On and after January 1, 2014, and except as provided in paragraph (2), this section shall apply only to individual grandfathered health plans previously issued pursuant to this section to federally eligible defined individuals. (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), paragraph (1) shall become inoperative on the date of that repeal or amendment and this section shall apply to health benefit plans issued, amended, or renewed on or after that date. (3) For purposes of this subdivision, the following definitions apply: (A) “Grandfathered health plan” has the same meaning as that term is defined in Section 1251 of PPACA. (B) “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. (Amended by Stats. 2013, Ch. 441, Sec. 19. (AB 1180) Effective October 1, 2013.)
  128. 10901.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    Carriers must follow premium limits for certain health benefit plans, including capped rates and limits on premium increases for federally eligible defined individuals.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10901.9. (a) Commencing January 1, 2001, premiums for health benefit plans offered, delivered, amended, or renewed by carriers shall be subject to the following requirements: (1) The premium for new business for a federally eligible defined individual shall not exceed the following amounts: (A) For health benefit plans identified in subdivision (d) of Section 10785 that offer services through a preferred provider arrangement, the average premium paid by a subscriber of the Major Risk Medical Insurance Program who is of the same age and resides in the same geographic area as the federally eligible defined individual. However, for federally eligible defined individuals who are between 60 to 64 years of age, inclusive, the premium shall not exceed the average premium paid by a subscriber of the Major Risk Medical Insurance Program who is 59 years of age and resides in the same geographic area as the federally eligible defined individual. (B) For health benefit plans identified in subdivision (d) of Section 10785 that do not offer services through a preferred provider arrangement, 170 percent of the standard premium charged to an individual who is of the same age and resides in the same geographic area as the federally eligible defined individual. However, for federally eligible defined individuals who are between 60 to 64 years of age, inclusive, the premium shall not exceed 170 percent of the standard premium charged to an individual who is 59 years of age and resides in the same geographic area as the federally eligible defined individual. (2) The premium for in force business for a federally eligible defined individual shall not exceed the following amounts: (A) For health benefit plans identified in subdivision (d) of Section 10785 that offer services through a preferred provider arrangement, the average premium paid by a subscriber of the Major Risk Medical Insurance Program who is of the same age and resides in the same geographic area as the federally eligible defined individual. However, for federally eligible defined individuals who are between 60 and 64 years of age, inclusive, the premium shall not exceed the average premium paid by a subscriber of the Major Risk Medical Insurance Program who is 59 years of age and resides in the same geographic area as the federally eligible defined individual. (B) For health benefit plans identified in subdivision (d) of Section 10785 that do not offer services through a preferred provider arrangement, 170 percent of the standard premium charged to an individual who is of the same age and resides in the same geographic area as the federally eligible defined individual. However, for federally eligible defined individuals who are between 60 and 64 years of age, inclusive, the premium shall not exceed 170 percent of the standard premium charged to an individual who is 59 years of age and resides in the same geographic area as the federally eligible defined individual. The premium effective on January 1, 2001, shall apply to in force business at the earlier of either the time of renewal or July 1, 2001. (3) This subdivision shall become inoperative January 1, 2014. This subdivision shall become operative on January 1, 2020. (b) (1) Commencing January 1, 2014, premiums for health benefit plans offered, delivered, amended, or renewed by carriers shall be subject to the following requirements: (A) With respect to the rate charged for coverage provided in 2014, the rate charged in 2013 for that coverage multiplied by 1.09. (B) With respect to the rate charged for coverage provided in 2015 and each subsequent year, the rate charged in the prior year multiplied by a factor of one plus the percentage change in the statewide average premium for the second lowest cost silver plan offered on the Exchange. The Exchange shall determine the percentage change in the statewide average premium for the second lowest cost silver plan by subtracting clause (i) from clause (ii) and dividing the result by clause (i). (i) The average of the premiums charged in the year prior to the applicable year for the second lowest cost silver plan in all 19 rating regions, with the premium for each region weighted based on the region’s relative share of the Exchange’s total individual enrollment according to the latest data available to the Exchange. (ii) The average of the premiums to be charged in the applicable year for the second lowest cost silver plan in all 19 rating regions, with the premium for each region weighted based on the region’s relative share of the Exchange’s total individual enrollment according to the latest data available to the Exchange. (C) The Exchange shall determine the percentage change in the statewide average premium no later than 30 days after the Exchange’s rates for individual coverage for the applicable year have been finalized. (2) For purposes of this subdivision, “Exchange” means the California Health Benefit Exchange established pursuant to Section 100500 of the Government Code. (3) This subdivision shall become operative on January 1, 2014, and shall become inoperative on January 1, 2020. (c) The premium applied to a federally eligible defined individual may not increase by more than the following amounts: (1) For health benefit plans identified in subdivision (d) of Section 10785 that offer services through a preferred provider arrangement, the average increase in the premiums charged to a subscriber of the Major Risk Medical Insurance Program who is of the same age and resides in the same geographic area as the federally eligible defined individual. (2) For health benefit plans identified in subdivision (d) of Section 10785 that do not offer services through a preferred provider arrangement, the increase in premiums charged to a nonfederally eligible defined individual who is of the same age and resides in the same geographic area as the federally eligible defined individual. The premium for an eligible individual may not be modified more frequently than every 12 months. (3) For a contract that a carrier has discontinued offering, the premium applied to the first rating period of the new contract that the federally eligible defined individual elects to purchase shall be no greater than the premium applied in the prior rating period to the discontinued contract. (d) (1) On and after January 1, 2014, and except as provided in paragraph (2), this section shall apply only to individual grandfathered health plans previously issued pursuant to this section to federally eligible defined individuals. (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), paragraph (1) shall become inoperative on the date of that repeal or amendment and this section shall apply to health benefit plans issued, amended, or renewed or amended on or after that date. (3) For purposes of this subdivision, the following definitions apply: (A) “Grandfathered health plan” has the same meaning as that term is defined in Section 1251 of PPACA. (B) “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. (Amended by Stats. 2013, Ch. 441, Sec. 20. (AB 1180) Effective October 1, 2013.)
  129. 10902.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    Carriers must apply premiums consistently for all federally eligible defined individuals who apply for coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10902. Carriers shall apply premiums consistently with respect to all federally eligible defined individuals who apply for coverage. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  130. 10902.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    When offering an individual health benefit plan for sale, each carrier must make a reasonable disclosure of all individual contracts in its solicitation and sales materials.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10902.1. In connection with the offering for sale of any health benefit plan designed to an individual, each carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of all individual contracts. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  131. 10902.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    A health benefit plan is not required to offer an individual contract if the carrier does not otherwise offer contracts to individuals.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10902.2. Nothing in this chapter shall be construed to require a health benefit plan to offer a contract to an individual if the carrier does not otherwise offer contracts to individuals. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  132. 10902.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    A carrier must file a statement with the commissioner at least 20 business days before certain plan renewals, amendments, or initial offerings, and must file amendments for premium changes and other plan changes. The commissioner may disapprove, suspend, or postpone use of a carrier’s plan design and must state the reasons in writing.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10902.3. (a) At least 20 business days prior to renewing or amending a health benefit plan contract subject to this chapter, or at least 20 business days prior to the initial offering of a health benefit plan subject to this chapter, a carrier shall file a statement with the commissioner in the same manner as required for small employers as outlined in Section 10717. The statement shall include a statement certifying that the carrier is in compliance with subdivision (a) of Section 10901.3 and with Section 10901.9. Any action by the commissioner, as permitted under Section 10717, to disapprove, suspend, or postpone the plan’s use of a carrier’s health benefit plan design shall be in writing, specifying the reasons the health benefit plan does not comply with the requirements of this chapter. (b) Prior to making any changes in the premium, the carrier shall file an amendment in the same manner as required for small employers as outlined in Section 10717, and shall include a statement certifying the carrier is in compliance with subdivision (a) of Section 10901.3 and with Section 10901.9. All other changes to a health benefit plan previously filed with the commissioner pursuant to subdivision (a) shall be filed as an amendment in the same manner as required for small employers as outlined in Section 10717. (c) (1) On and after January 1, 2014, and except as provided in paragraph (2), this section shall apply only to individual grandfathered health plans previously issued pursuant to this section to federally eligible defined individuals. (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), paragraph (1) shall become inoperative on the date of that repeal or amendment and this section shall apply to health benefit plans issued, amended, or renewed on or after that date. (3) For purposes of this subdivision, the following definitions apply: (A) “Grandfathered health plan” has the same meaning as that term is defined in Section 1251 of PPACA. (B) “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. (Amended by Stats. 2013, Ch. 441, Sec. 21. (AB 1180) Effective October 1, 2013.)
  133. 10902.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. )

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    The commissioner may issue and enforce regulations for this chapter, and those rules may be adopted as emergency regulations.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.5. Individual Access to Contracts for Health Care Services [10900 - 10902.5] ( Chapter 9.5 added by Stats. 2000, Ch. 810, Sec. 5. ) ## 10902.5. The commissioner may issue regulations that are necessary to carry out the purposes of this chapter. Any rules and regulations adopted pursuant to this chapter may be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Until December 31, 2001, 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. The regulations shall be enforced by the commissioner. (Added by Stats. 2000, Ch. 810, Sec. 5. Effective January 1, 2001.)
  134. 1091.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 16. Approval of Reinsurance Plans [1080 - 1091] ( Article 16 enacted by Stats. 1935, Ch. 145. )

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    A retiring insurer must pay the commissioner $1,794 to file documents starting approval proceedings for a reinsurance plan.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 16. Approval of Reinsurance Plans [1080 - 1091] ( Article 16 enacted by Stats. 1935, Ch. 145. ) ## 1091. The retiring insurer shall pay to the commissioner a fee of one thousand seven hundred ninety-four dollars ($1,794) for filing the documents initiating approval proceedings under this article. If the plan be approved and consummated the retiring insurer shall apply for withdrawal under Article 15 of this chapter and that fee shall also cover the services and expenses of the commissioner in connection with the withdrawal. (Amended by Stats. 2017, Ch. 534, Sec. 20. (AB 1699) Effective January 1, 2018.)
  135. 10930.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    This section defines terms used for CO-OP insurance plans, including what counts as a consumer operated and oriented plan, different boards, members, and certain CMS loans.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930. For purposes of this chapter, the following definitions shall apply: (a) “Consumer operated and oriented plan” means a nonprofit member organization or nonprofit member corporation that has been established consistent with the requirements of Section 1322 of PPACA and Subpart F (commencing with Section 156.500) of Part 156 of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations and remains in full compliance with those requirements. A consumer operated and oriented plan shall also be known as a “CO-OP.” (b) “Formation board” means the initial board of directors of a CO-OP before it has begun accepting enrollment and had an election by the members of the CO-OP to the board of directors. (c) “Member” includes all individuals, including dependents, 18 years of age or older covered under health insurance policies issued by the CO-OP insurer. (d) “Operational board” means the board of directors elected by the members of the CO-OP after it has begun accepting enrollment under its health insurance policies. (e) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules or regulations issued thereunder. (f) “Nonprofit member organization” or “nonprofit member corporation” means a nonprofit public benefit corporation organized under Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code, a nonprofit mutual benefit corporation organized under Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code, or a similar entity organized under applicable provisions of the Corporations Code, or in the case of a foreign corporation, a nonprofit public benefit corporation, a mutual benefit corporation, or a similar entity organized under nonprofit laws in a state other than California. (g) “Solvency loan” means a loan provided by the federal Centers for Medicare and Medicaid Services to a nonprofit member organization or nonprofit member corporation seeking to become licensed as a CO-OP insurer, to be used to assist in meeting the state’s solvency and reserve requirements. (h) “Start-up loan” means a loan provided by the federal Centers for Medicare and Medicaid Services to a nonprofit member organization or nonprofit member corporation seeking to become licensed as a CO-OP insurer, to be used for allowed expenses associated with establishing a CO-OP, as further specified by PPACA. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  136. 10930.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    The commissioner can issue disability-insurer certificates of authority to qualifying CO-OPs, including certain foreign CO-OPs, and CO-OPs with certificates are charged the same fees and premium taxes as comparable insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.1. (a) The commissioner shall have the authority to issue a certificate of authority as a disability insurer to a CO-OP that has been organized as a nonprofit member organization or nonprofit member corporation under the laws of this state. The commissioner may also issue a certificate of authority as a disability insurer to a foreign CO-OP that has been organized as a nonprofit member organization or nonprofit member corporation under the laws of another state, provided that the entity meets the requirements governing CO-OPs under PPACA and this chapter. A CO-OP seeking or maintaining a certificate of authority pursuant to this chapter shall be subject to the same fees that are imposed on mutual insurers. (b) A CO-OP admitted as a CO-OP insurer shall be subject to the same premium taxes as are imposed on for-profit health insurers with a certificate of authority from the commissioner. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  137. 10930.2.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    A CO-OP insurer must meet the same paid-in capital requirements as domestic and foreign mutual insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.2. A domestic or foreign insurer admitted as a CO-OP insurer shall be subject to the same “paid-in capital” or “capital paid-in” requirements as are imposed on domestic and foreign mutual insurers pursuant to Sections 36 and 4011. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  138. 10930.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    A domestic or foreign CO-OP admitted as a CO-OP insurer must follow the insurance code, the commissioner’s rules, and certain state laws that do not block PPACA requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.3. (a) A domestic or foreign CO-OP admitted as a CO-OP insurer shall be subject to all of the provisions of this code that are applicable to insurers issuing policies of health insurance in the state and all applicable rules and regulations of the commissioner, including, but not limited to, the general provisions governing issuance of a certificate of authority in Article 3 (commencing with Section 699) of, the examination provisions in Article 4 (commencing with Section 729) of, the risk-based capital requirements in Article 4.1 (commencing with Section 739) of, and the financial statement filing requirements in Article 10 (commencing with Section 900) of, Chapter 1 of Part 2 of Division 1. (b) In compliance with Section 1322(c)(5) of PPACA (42 U.S.C. Sec. 18042(c)(5)), and any rules or regulations issued under that section, a domestic or foreign CO-OP admitted as a CO-OP insurer shall be subject to any state laws that do not prevent the application of requirements under PPACA. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  139. 10930.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    CO-OP solvency loans are treated like surplus notes, and CO-OPs are subject to the same securities permit requirements as mutual insurers unless the commissioner waives them.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.4. (a) A solvency loan obtained by a CO-OP shall be treated as a surplus note and shall be subject to the same requirements as are imposed on mutual insurers pursuant to Article 4 (commencing with Section 4040) of Chapter 4 of Part 1 of Division 2. The commissioner may request any documentation relating to a CO-OP’s start-up loan or solvency loan. (b) A CO-OP shall be subject to the same securities permit requirements as are imposed upon mutual insurers pursuant to Section 4042; however, the commissioner shall have the authority to waive the requirements under Section 4042 upon a determination that they are not applicable following a full review of the CO-OP’s plan of operations and any other documents as requested by the commissioner prior to the admission of the CO-OP. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  140. 10930.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    Section 699.5 applies to insurers admitted as CO-OP insurers, but solvency or start-up loans to the CO-OP are not treated as subsidy, ownership, or financial control under that section.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.5. The provisions of Section 699.5 shall apply to any insurer admitted as a CO-OP insurer; however, any loans received by the CO-OP in the form of a solvency or start-up loan shall not be construed as any form of subsidy, ownership, or financial control of the CO-OP insurer within the meaning of Section 699.5. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  141. 10930.6.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    A CO-OP must follow member-control, board-governance, ethics, and conflict-of-interest rules, and violations can threaten its certificate of authority.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.6. (a) A CO-OP shall be subject at all times to the prohibitions in PPACA against converting or selling to a for-profit or nonconsumer-operated entity at any time after receiving a solvency loan. (b) A CO-OP shall do all of the following, in addition to any other requirements imposed under Section 156.515 of Title 45 of the Code of Federal Regulations: (1) Implement policies and procedures to foster and ensure member control of the organization. For purposes of this paragraph, a CO-OP shall meet the following requirements: (A) The CO-OP shall have governing documents that incorporate governing rules that ensure that the directors of the operational board are elected by a majority vote of a quorum of the CO-OP members. (B) All members of the CO-OP shall be eligible to vote for each director on the CO-OP’s operational board. (C) Each member of the CO-OP shall have one vote in the election of each director of the CO-OP’s operational board. (D) The first elected directors of the CO-OP’s operational board shall be elected no later than one year after the effective date on which the CO-OP provides coverage to its first member; the entire operational board shall be elected no later than two years after the same date. (E) Elections of the directors on the CO-OP’s operational board shall be contested so that the total number of candidates for vacant positions on the operational board exceeds the number of vacant positions, except in cases where a seat is vacated midterm due to death, resignation, or removal. (F) A majority of the voting directors on the operational board shall be members of the CO-OP. (2) Have an operational board of directors that meets the following requirements: (A) Each director shall have one vote unless he or she is a nonvoting director. (B) Positions on the board of directors may be designated for individuals with specialized expertise, experience, or affiliation (for example, providers, employers, including small business consortia, and unions); however, those positions shall not constitute a majority of the operational board even if the individuals in those positions are also members of the CO-OP. (C) (i) No representative of any federal, state, or local government, or of any political subdivision or instrumentality thereof, and no representative of any organization described in Section 156.510(b)(1)(i) of Title 45 of the Code of Federal Regulations may serve as staff of the CO-OP or on the CO-OP’s formation board or operational board. (ii) No board member or staff of the CO-OP shall enter into an agreement or transaction that would jeopardize member control as required by Section 156.515 of Title 45 of the Code of Federal Regulations. A board member or staff of the CO-OP shall only enter into arm’s length transactions as described in Section 156.510(b)(2)(ii) of Title 45 of the Code of Federal Regulations. (3) Have governing documents that incorporate ethics, conflict of interest, and disclosure standards. These standards shall protect against insurance industry involvement and interference. In addition, these standards shall ensure that each director acts in the sole interest of the CO-OP, its members, and its local geographic community, as appropriate, and acts consistently with the terms of the CO-OP’s governance documents and applicable state and federal law. At a minimum, these standards shall include the following: (A) A mechanism to identify potential ethical or other conflicts of interest. (B) A duty on the CO-OP’s executive officers and directors to publicly disclose all potential conflicts of interest pursuant to the same standards required for state boards or commissions. (C) A process to determine the extent to which a conflict exists. (D) A process to address any conflict of interest. (E) A process to be followed in the event a director or executive officer of the CO-OP violates the standards described in this paragraph. (c) A violation of any of the requirements of this section shall constitute grounds for revocation of the CO-OP insurer’s certificate of authority, in addition to any other grounds in this code for revocation of the certificate. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  142. 10930.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    A CO-OP insurer is insolvent when its surplus falls below a stated paid-in-capital benchmark, and conservation and liquidation provisions apply to CO-OP insurers.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.7. A CO-OP insurer is insolvent if its surplus becomes less than the amount of paid-in capital required of a capital stock company to qualify to transact the class of disability and health insurance. The conservation and liquidation provisions of Article 14 (commencing with Section 1010) of Chapter 1 of Part 2 of Division 1 shall apply to CO-OP insurers. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  143. 10930.8.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    A CO-OP must stay fully compliant with PPACA requirements, and the commissioner may ask for federal certification and compliance-status information.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.8. In addition to any applicable requirements in this code for maintaining a certificate of authority, a CO-OP is required at all times to be in full compliance with the requirements of PPACA governing CO-OPs. The commissioner may request the federal government’s certification that a CO-OP is in compliance with the requirements of PPACA governing CO-OPs, as well as the status of the CO-OP’s compliance with its obligations under any loan or loan modification agreement. (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  144. 10930.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. )

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    The department may adopt regulations to implement this chapter, following the Administrative Procedure Act.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.6. Consumer Operated and Oriented Plans [10930 - 10930.9] ( Chapter 9.6 added by Stats. 2012, Ch. 859, Sec. 3. ) ## 10930.9. The department may adopt regulations implementing this chapter pursuant 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). (Added by Stats. 2012, Ch. 859, Sec. 3. (AB 1846) Effective January 1, 2013.)
  145. 10950.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

    Verify source ↗

    This section defines key terms used in the chapter about child access to health insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10950. As used in this chapter: (a) “Child” means any individual under 19 years of age. (b) “Individual grandfathered plan coverage” means health care coverage in which an individual was enrolled on March 23, 2010, consistent with Section 1251 of PPACA and any rules or regulations adopted pursuant to that law. (c) “Initial open enrollment period” means the open enrollment period beginning on January 1, 2011, and ending 60 days thereafter. (d) “Late enrollee” means a child without coverage who did not enroll in a health benefit plan during an open enrollment period because of any of the following: (1) The child lost dependent coverage due to termination or change in employment status of the child or the person through whom the child was covered; cessation of an employer’s contribution toward an employee or dependent’s coverage; death of the person through whom the child was covered as a dependent; legal separation; divorce; loss of coverage under the Healthy Families Program, the Access for Infants and Mothers Program, or the Medi-Cal program; or adoption of the child. (2) The child became a resident of California during a month that was not the child’s birth month. (3) The child is born as a resident of California and did not enroll in the month of birth. (4) The child is mandated to be covered pursuant to a valid state or federal court order. (e) “Open enrollment period” means the annual open enrollment period subsequent to the initial open enrollment period, applicable to each individual child that is the month of the child’s birth date. (f) “PPACA” means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any subsequent rules or regulations issued pursuant to that law. (g) “Preexisting condition exclusion” means, with respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment of the coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date. (h) “Responsible party for a child” means an adult having custody of the child or with responsibility for the financial needs of the child, including the responsibility to provide health care coverage. (i) “Standard risk rate” means the lowest rate that can be offered for a child with the same benefit plan, effective date, age, geographic region, and family status. (Added by Stats. 2010, Ch. 656, Sec. 6. (AB 2244) Effective January 1, 2011. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  146. 10951.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    Carriers in the individual market must offer child coverage during open enrollment and may not reject certain child applications or use listed health-related factors to deny individual coverage.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10951. (a) (1) During each open enrollment period, every carrier offering health benefit plans in the individual market, other than individual grandfathered plan coverage, shall offer to the responsible party for a child coverage for the child that does not exclude or limit coverage due to any preexisting condition of the child. (b) A carrier offering coverage in the individual market shall not reject an application for a health benefit plan from a child or filed on behalf of a child by the responsible party during an open enrollment period or from a late enrollee during a period no longer than 63 days from the qualifying event listed in subdivision (d) of Section 10950. (c) Except to the extent permitted by federal law, rules, regulations, or guidance issued by the relevant federal agency, a carrier shall not condition the issuance or offering of individual coverage on any of the following 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 department. This subdivision shall not apply to a health benefit plan providing individual grandfathered plan coverage. (d) When a responsible party for a child 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 health benefit plan 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 the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment. (e) A carrier offering coverage in the individual market shall not reject the request of a responsible party for a child to include that child as a dependent on an existing health benefit plan that includes dependent coverage during an open enrollment period. (f) Nothing in this chapter shall be construed to prohibit a carrier offering coverage in the individual market from establishing rules for eligibility for coverage and offering coverage pursuant to those rules for children and individuals based on factors otherwise authorized under federal and state law for health benefit plans in addition to those offered on a guaranteed issue basis during an open enrollment period to children or late enrollees pursuant to this chapter. However, a carrier, other than a carrier providing individual grandfathered plan coverage, shall not impose a preexisting condition provision on coverage, including dependent coverage, offered to a child. (g) Nothing in this chapter shall be construed to require a carrier to establish a new service area or to offer health care coverage on a statewide basis, outside of the carrier’s existing service area. (h) Nothing in this chapter shall be construed to prevent a carrier from offering coverage to a family member of an enrollee in grandfathered health plan coverage consistent with Section 1251 of PPACA. (Added by Stats. 2010, Ch. 656, Sec. 6. (AB 2244) Effective January 1, 2011. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  147. 10952.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    This chapter does not apply to several specified health benefit plans and coverage types.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10952. This chapter shall not apply to health benefit plans for coverage of Medicare services pursuant to contracts with the United States government, Medicare supplement policies, Medi-Cal contracts with the State Department of Health Care Services, policies offered under the Healthy Families Program, long-term care coverage, or specialized health benefit plans. (Added by Stats. 2010, Ch. 656, Sec. 6. (AB 2244) Effective January 1, 2011. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  148. 10953.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    A carrier must fairly offer and sell child health plans in covered service areas, and carriers and solicitors may not steer children away from applying or to another carrier for specified reasons. Carriers also may not vary solicitor compensation based on a child’s listed characteristics, except for a permitted percentage-of-premium arrangement that does not vary on those factors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10953. (a) Upon the effective date of this chapter, a carrier shall fairly and affirmatively offer, market, and sell all of the carrier’s health benefit plans that are offered and sold to a child or the responsible party for a child in each service area in which the plan provides or arranges for health care coverage during any open enrollment period, to late enrollees, and during any other period in which state or federal law, rules, regulations, or guidance expressly provide that a carrier shall not condition offer or acceptance of coverage on any preexisting condition. (b) No carrier or solicitor shall, directly or indirectly, engage in the following activities: (1) Encourage or direct a child or responsible party for a child to refrain from filing an application for coverage with a carrier because of the health status, claims experience, industry, occupation, or geographic location, provided that the location is within the carrier’s approved service area, of the child. (2) Encourage or direct a child or responsible party for a child to seek coverage from another carrier because of the health status, claims experience, industry, occupation, or geographic location, provided that the location is within the carrier’s approved service area, of the child. (c) A carrier 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 benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the child. 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 child. (Added by Stats. 2010, Ch. 656, Sec. 6. (AB 2244) Effective January 1, 2011. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  149. 10954.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    Carriers may use limited characteristics to set a child’s health plan rate, but must follow child-specific rate limits, give required notices, and not demand coverage-history documentation.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10954. (a) A carrier may use the following characteristics of an eligible child for purposes of establishing the rate of the health benefit plan for that child, where consistent with federal regulations under PPACA: age, geographic region, and family composition, plus the health benefit plan selected by the child or the responsible party for a child. (b) From the effective date of this chapter to December 31, 2013, inclusive, rates for a child applying for coverage shall be subject to the following limitations: (1) During any open enrollment period or for late enrollees, the rate for any child due to health status shall not be more than two times the standard risk rate for a child. (2) The rate for a child shall be subject to a 20-percent surcharge above the highest allowable rate on a child applying for coverage who is not a late enrollee and who failed to maintain coverage with any carrier or health care service plan for the 90-day period prior to the date of the child’s application. The surcharge shall apply for the 12-month period following the effective date of the child’s coverage. (3) If expressly permitted under PPACA and any rules, regulations, or guidance issued pursuant to that act, a carrier may rate a child based on health status during any period other than an open enrollment period if the child is not a late enrollee. (4) If expressly permitted under PPACA and any rules, regulations, or guidance issued pursuant to that act, a carrier may condition an offer or acceptance of coverage on any preexisting condition or other health status-related factor for a period other than an open enrollment period and for a child who is not a late enrollee. (c) For any individual health benefit plan issued, sold, or renewed prior to December 31, 2013, the carrier shall provide to a child or responsible party for a child a notice that states the following: “Please consider your options carefully before failing to maintain or renewing coverage for a child for whom you are responsible. If you attempt to obtain new individual coverage for that child, the premium for the same coverage may be higher than the premium you pay now.” (d) A child who applied for coverage between September 23, 2010, and the end of the initial enrollment period shall be deemed to have maintained coverage during that period. (e) Effective January 1, 2014, except for individual grandfathered health plan coverage, the rate for any child shall be identical to the standard risk rate. (f) Carriers shall not require documentation from applicants relating to their coverage history. (g) (1) On and after the operative date of the act adding this subdivision, and until January 1, 2014, a carrier shall provide the model notice, as provided in paragraph (3), to all applicants for coverage under this chapter and to all insureds, or the responsible party for an insured, renewing coverage under this chapter that contains the following information: (A) Information about the open enrollment period provided under Section 10965.3. (B) An explanation that obtaining coverage during the open enrollment period described in Section 10965.3 will not affect the effective dates of coverage for coverage purchased pursuant to this chapter unless the applicant cancels that coverage. (C) An explanation that coverage purchased pursuant to this chapter shall be effective as required under subdivision (d) of Section 10951 and that such coverage shall not prevent an applicant from obtaining new coverage during the open enrollment period described in Section 10965.3. (D) Information about the Medi-Cal program, information about the Healthy Families Program if the Healthy Families Program is accepting enrollment, and information about subsidies available through the California Health Benefit Exchange. (2) The notice described in paragraph (1) shall be in plain language and 14-point type. (3) The department shall adopt a uniform model notice to be used by carriers in order to comply with this subdivision, and shall consult with the Department of Managed Health Care in adopting that uniform model notice. Use of the model notice shall not require prior approval of the department. The adoption of the model notice by the department for purposes of this section 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). (Amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 17. (AB 2 1x) Effective September 30, 2013. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  150. 10957.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    A carrier generally does not have to offer a health benefit plan or accept applications for a child outside its approved service area, or where it lacks enough delivery resources. The carrier also may not sell a contract to new employer groups in an area where it is not offering coverage to individuals until it notifies and certifies to the commissioner that it can enroll individuals there.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10957. No carrier shall be required to offer a health benefit plan or accept applications for the contract pursuant to this chapter in the case of any of the following: (a) To a child, if the child who is to be covered by the health benefit plan does not work or reside within the carrier’s approved service areas. (b) (1) Within a specific service area or portion of a service area, if the carrier reasonably anticipates and demonstrates to the satisfaction of the commissioner that it will not have sufficient health care delivery resources to ensure that health care services will be available and accessible to the child because of its obligations to existing insureds. (2) A carrier that cannot offer a health benefit plan to individuals or children 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 carrier is not offering coverage to individuals to new employer groups until the carrier notifies the commissioner that it has the ability to deliver services to individuals, and certifies to the commissioner that from the date of the notice it will enroll all individuals requesting coverage in that area from the carrier. (3) Nothing in this chapter shall be construed to limit the commissioner’s authority to develop and implement a plan of rehabilitation for a carrier whose financial viability or organizational and administrative capacity has become impaired. (Added by Stats. 2010, Ch. 656, Sec. 6. (AB 2244) Effective January 1, 2011. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  151. 10958.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    The commissioner may require a carrier to stop offering contracts or accepting applications if the commissioner determines the carrier lacks enough financial, organizational, or administrative capacity to deliver health care services. The commissioner must also consider the carrier’s compliance with this part and the adopted rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10958. The commissioner may require a carrier to discontinue the offering of contracts or acceptance of applications from any individual or child or responsible party for a child upon a determination by the commissioner that the carrier does not have sufficient financial viability or organizational and administrative capacity to ensure the delivery of health care services to its insureds. In determining whether the conditions of this section have been met, the commissioner shall consider, but not be limited to, the carrier’s compliance with the requirements of this part and the rules adopted under those provisions. (Added by Stats. 2010, Ch. 656, Sec. 6. (AB 2244) Effective January 1, 2011. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  152. 10959.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    Health benefit plans for children must comply with specified sections and be renewable, subject to stated cancellation or nonrenewal exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10959. (a) All health benefit plans offered to a child or on behalf of a child to a responsible party for a child shall conform to the requirements of Section 10127.18, 10273.4, and 12682.1, and shall be renewable at the option of the child or responsible party for a child on behalf of the child except as permitted to be canceled, rescinded, or not renewed pursuant to Section 10273.4. (b) Any carrier that ceases to offer for sale new individual health benefit plans pursuant to Section 10273.4 shall continue to be governed by this chapter with respect to business conducted under this chapter. (c) Except as authorized under Section 10958, a carrier that as of the effective date of this chapter does not write new health benefit plans for children in this state or that after the effective date of this chapter ceases to write new health benefit plans for children in this state shall be prohibited from offering for sale new individual health benefit plans or in this state for a period of five years from the date of notice to the commissioner. (Amended by Stats. 2011, Ch. 296, Sec. 191. (AB 1023) Effective January 1, 2012. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  153. 10960.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    The commissioner may issue guidance to health plans about compliance with this chapter, and that guidance is temporarily outside the APA until joint regulations are adopted.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10960. On or before July 1, 2011, the commissioner may issue guidance to health plans regarding compliance with this chapter and 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). The guidance shall only be effective until the commissioner and the Director of the Department of Managed Health Care adopt joint regulations pursuant to the Administrative Procedure Act. (Amended by Stats. 2011, Ch. 296, Sec. 192. (AB 1023) Effective January 1, 2012. Inoperative, pursuant to Section 10960.5, on January 1, 2014, subject to condition for resuming operation.)
  154. 10960.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. )

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    This section says Chapter 9.7 becomes inoperative on a specified date, but can become operative again later if a stated federal law change happens.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.7. Child Access to Health Insurance [10950 - 10960.5] ( Heading of Chapter 9.7 amended by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 16. ) ## 10960.5. (a) This chapter shall become inoperative on January 1, 2014, or the 91st calendar day following the adjournment of the 2013–14 First Extraordinary Session, whichever date is later. (b) 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-4), this chapter shall become operative 12 months after the date of that repeal or amendment. (Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 18. (AB 2 1x) Effective September 30, 2013. Note: This section provides for Chapter 9.7 (commencing with Section 10950) to become inoperative on January 1, 2014, and, under certain conditions, to resume operation later.)
  155. 10965.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    This section defines key terms used in Chapter 9.9 on individual access to health insurance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965. For purposes of this chapter, 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, child, or parent or stepparent pursuant to Section 10278.1, of an individual, subject to applicable terms of the health benefit plan. (c) “Exchange” means the California Health Benefit Exchange created by Section 100500 of the Government Code. (d) “Family” means the policyholder and dependent or dependents. (e) “Grandfathered health plan” has the same meaning as defined in Section 1251 of PPACA. (f) “Health benefit plan” means an individual or group policy of health insurance, as defined in Section 106. The term does not include a health insurance policy that provides excepted benefits, as described in Sections 2722 and 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21; 42 U.S.C. Sec. 300gg-91), subject to Section 10965.01 a health insurance policy 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 Healthy Families Program (Part 6.2 (commencing with Section 12693) of Division 2), the Access for Infants and Mothers Program (Part 6.3 (commencing with Section 12695) of Division 2), or the program under Part 6.4 (commencing with Section 12699.50) of Division 2, or Medicare supplement coverage, to the extent consistent with PPACA or a specified disease or hospital indemnity policy, subject to Section 10965.01. (g) “Policy year” means the period from January 1 to December 31, inclusive. (h) “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. (i) “Preexisting condition provision” means a policy provision that excludes coverage for charges or expenses incurred during a specified period following the insured’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. (j) “Rating period” means the calendar year for which premium rates are in effect pursuant to subdivision (d) of Section 10965.9. (k) “Registered domestic partner” means a person who has established a domestic partnership as described in Section 297 of the Family Code. (Amended by Stats. 2021, Ch. 468, Sec. 4. (AB 570) Effective January 1, 2022.)
  156. 10965.01.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    Certain specified disease and hospital confinement indemnity policies are excluded from “health benefit plan” only if the carrier follows the required filing, disclosure, timing, and coverage rules.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.01. (a) For purposes of this chapter, “health benefit plan” does not include policies or certificates of specified disease or hospital confinement indemnity provided that the carrier offering those policies or certificates complies with the following: (1) The carrier files, on or before March 1 of each year, a certification with the commissioner that contains the statement and information described in paragraph (2). (2) The certification required in paragraph (1) shall contain the following: (A) A statement from the carrier certifying that policies or certificates described in this section (i) are being offered and marketed as supplemental health insurance and not as a substitute for coverage that provides essential health benefits as defined by the state pursuant to Section 1302 of PPACA, and (ii) the disclosure forms as described in Section 10603 contains the following statement prominently on the first page: “This is a supplement to health insurance. It is not a substitute for essential health benefits or minimum essential coverage as defined in federal law.” (B) A summary description of each policy or certificate described in this section, including the average annual premium rates, or range of premium rates in cases where premiums vary by age, gender, or other factors, charged for the policies and certificates issued or delivered in this state. (3) In the case of a policy or certificate that is described in this section and that is offered in this state on or after January 1, 2014, the carrier files with the commissioner the information and statement required in paragraph (2) at least 30 days prior to the date such a policy or certificate is issued or delivered in this state. (4) The carrier issuing a policy or certificate of specified disease or a policy or certificate of hospital confinement indemnity requires that the person to be insured is covered by an individual or group policy or contract that arranges or provides medical, hospital, and surgical coverage not designed to supplement other private or governmental plans. (b) As used in this section, “policies or certificates of specified disease” and “policies or certificates of hospital confinement indemnity” mean policies or certificates of insurance sold to an insured to supplement other health insurance coverage as specified in this section. (Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. (AB 2 1x) Effective September 30, 2013.)
  157. 10965.02.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    This section says certain owners and spouses are not treated as employees for small-employer health coverage eligibility, and it limits coverage sales for businesses without employees.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.02. For the purposes of determining eligibility for small employer coverage, a sole proprietor and the sole proprietor’s spouse are not considered employees with respect to a sole proprietorship that consists only of the sole proprietor and the sole proprietor’s spouse. A partner and a partner’s spouse are not employees of a partnership that consists solely of partners and their spouses. Employer group health benefit plans shall not be issued, marketed, or sold to a sole proprietorship or partnership without employees directly or indirectly through any arrangement. Only individual health benefit plans shall be sold to any entity without employees. (Added by Stats. 2018, Ch. 700, Sec. 11. (SB 1375) Effective January 1, 2019.)
  158. 10965.03.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    This section sets rules for student health insurance coverage in California, including when coverage must comply with individual-health rules, when students may terminate coverage, when waivers apply, and what notice, rating, and penalty rules apply.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.03. (a) It is the intent of the Legislature to encourage self-funded student health coverage offered by the University of California Student Health Insurance Plan and the University of California Voluntary Dependent Plan to maintain or exceed coverage standards of the federal Patient Protection and Affordable Care Act. All other student health coverage offered by an institution of higher education in California shall comply with the provisions of the act that added this subdivision. (b) For policy years beginning on or after January 1, 2024, a blanket disability insurance policy that meets the definition of student health insurance coverage as set forth in this section shall be considered individual health insurance coverage for purposes of subdivision (b) of Section 106. (c) “Student health insurance coverage” is a blanket disability policy under paragraph (2) of subdivision (a) of Section 10270.2, that covers hospital, medical, or surgical benefits, that is provided pursuant to a written agreement between an institution of higher education, as defined in the federal Higher Education Act of 1965, and a disability insurance issuer, and provided to students enrolled in that institution of higher education and their dependents, that meets all of the following conditions: (1) Does not make coverage available other than in connection with enrollment as a student, or as a dependent of a student, in the institution of higher education. (2) Does not condition eligibility for the insurance coverage on any health status-related factor relating to a student or a dependent of a student. (3) Does not condition eligibility, an offer, issuance, a sale, or a renewal for the insurance coverage on any factor other than enrollment as a student or dependent of a student in the institution of higher education. (d) (1) (A) Except as otherwise expressly provided in this section, a blanket disability insurance policy that meets the definition of student health insurance coverage shall comply with the provisions of this code that are applicable to nongrandfathered individual health insurance, including, but not limited to, essential health benefits requirements as set forth in Section 10112.27, rating factors consistent with Section 10965.9, the annual limit on maximum out-of-pocket expenses as set forth in Section 10112.28, the prohibition against annual and lifetime limits under Section 10112.1, and all rules and regulations issued thereunder. (B) Commencing July 1, 2026, if a student certificate holder graduates, takes a leave of absence, or is no longer enrolled at the institution of higher education, they may request to terminate their student health insurance coverage during the policy year. The request shall be provided to the institution of higher education at least 30 calendar days before the effective date of termination. Upon receipt of the request to terminate coverage, the institution of higher education shall terminate coverage effective within the same calendar month if feasible, but no later than the last day of the calendar month in which the 30-day period ends. When a student certificate holder, or dependent of a student, chooses to terminate their student health insurance coverage during the policy year consistent with the circumstances set forth under this subparagraph, the student shall only pay the premium through the date of their termination of coverage. A student or dependent of a student shall not be liable for a premium payment during the time that they are not enrolled in student health insurance coverage. In the case of premium paid in full for an academic term, the student shall be refunded pro rata for any time they are not enrolled in student health insurance coverage. Notice of the ability to terminate coverage pursuant to this subparagraph shall be provided in the student health insurance enrollment materials provided to a student or a dependent of a student. A student or dependent of a student shall also be notified of premium liability to the student or dependent of the student, if any, if a student or dependent of a student chooses not to terminate coverage pursuant to this subparagraph. (2) Any reference to the insured in a blanket disability insurance policy that meets the definition of student health insurance coverage shall also refer to the individual students and dependents insured under those policies. (3) For the purposes of applying Sections 10123.81, 10123.84, 10123.87, 10123.135, 10123.194, 10278, 10354, 10965, and 10965.3 to student health insurance coverage, any reference to the policyholder shall also refer to the individual students. (e) (1) A student, or dependent of a student, shall not be required to purchase a blanket disability insurance policy if they have minimum essential coverage that meets the requirements of the Minimum Essential Coverage Individual Mandate under Section 100705 of the Government Code. (2) Commencing July 1, 2026, a student that obtains or maintains health coverage that is minimum essential coverage and who requests a waiver shall be granted a waiver from obtaining student health insurance coverage from their institution of higher education and shall not be required to pay a fee or premium for student health insurance coverage. (f) The following provisions apply to student health insurance coverage: (1) Student health insurance coverage is exempt from laws requiring guaranteed availability or guaranteed renewability, as follows: (A) Subdivision (f) of Section 10273.6 applies if the basis of student health insurance coverage is enrollment in the institution of higher education and an individual’s enrollment in the institution ceases. (B) For purposes of Sections 10965.3 and 10965.4, a disability insurance issuer that offers student health insurance coverage is not required to accept individuals who are not students or dependents of students in that coverage. Notwithstanding the requirements of subdivisions (a) and (c) of Section 10965.3 and Section 10965.4, a disability insurance issuer that offers student health insurance coverage is not required to establish open enrollment periods or coverage effective dates that are based on a calendar policy year or to offer policies on a calendar year basis. (C) For purposes of Sections 10273.6 and 10965.7, a disability insurance issuer that offers student health insurance coverage is not required to renew or continue in force coverage for individuals who are no longer students or dependents of students. To the extent the institution of higher education opts to renew the student health insurance policy, student health insurance coverage shall be renewable with respect to all eligible students or dependents of students at the option of the student. (2) The requirement to provide a specific level of coverage described in Sections 10112.3 and 10112.295 does not apply to student health insurance coverage. However, the benefits provided by that coverage shall provide at least 60 percent actuarial value, as calculated in accordance with Section 10112.295. The issuer shall specify in any plan materials summarizing the terms of the coverage the actuarial value and level of coverage, or the next lowest level of coverage, and how the coverage would otherwise satisfy requirements under Sections 10112.295 and 10112.296. (3) Student health insurance coverage is not subject to the requirements of subdivision (h) of Section 10965.3. A health insurance issuer that offers student health insurance coverage may establish one or more separate risk pools for an institution of higher education if the distinction between or among groups of students or dependents of students who form the risk pool is based on a bona fide school-related classification and not based on a health factor. However, student health insurance rates shall reflect the claims experience of individuals who comprise the risk pool, and any adjustments to rates within a risk pool shall be actuarially justified. (4) Student health insurance coverage shall not be required to comply with nongrandfathered individual health insurance rate review, but shall be subject to the nongrandfathered large group market rate review requirements under Article 4.7 (commencing with Section 10181) of Chapter 1, with the exception of paragraph (2) of subdivision (b) of Section 10181 and Section 10181.4. If the department determines that a rate is unreasonable or not justified consistent with Article 4.7 (commencing with Section 10181) of Chapter 1, the insurer shall notify the policyholder of this decision. If an insurer fails to comply with the timeline specified in paragraph (1) of subdivision (a) of Section 10181.3, the department may prohibit the proposed rate change. (5) For purposes of subdivision (c) of Section 10113.9, the notification shall be provided to a student certificate holder in addition to the policyholder. For purposes of subdivision (b) of Section 10113.9, the insurer shall provide the notification to the policyholder, and the institution of higher education shall provide the notification of the actual change in premiums to the student certificate holders. (6) Student health insurance coverage shall be subject to the requirements of subdivisions (b) and (c) of Section 10270.3, Section 10290, paragraph (1) of subdivision (b) of Section 10291.5, and Section 10382. (g) Each of the following shall not apply to student health insurance coverage: (1) (A) Subdivision (d) of Section 10965.9. (B) The rating period, instead, is the policy year for which premium rates are established for student health insurance coverage. (C) The premium rate for student health insurance coverage shall not vary during the rating period. (2) Sections 2236.1, 2236.3, 2236.4, 2236.5, and 2236.6 of Article 4 of Subchapter 2 of Chapter 5 of Title 10 of the California Code of Regulations. (3) Subdivision (a) of Section 10270.3. (4) Subdivision (a) of Section 10144.4. (5) Subdivisions (a) to (e), inclusive, of Section 10277. (6) Section 10278 for dependents under 26 years of age. (7) Subdivisions (g) and (j) of Section 10965. (8) Subdivisions (a), (c), and (e) of, paragraphs (1) to (3), inclusive, of subdivision (f) of, and subdivision (h) of, Section 10965.3. (h) (1) The following notice shall be provided in the student health insurance enrollment materials provided to a student or a dependent of a student: California requires residents and their dependents to obtain, and maintain, health coverage or pay a penalty, unless they qualify for an exemption. Enrolling in student health insurance offered by the college or university you are attending is one way to meet this requirement. You may be eligible to get free or low-cost health coverage through Medi-Cal regardless of immigration status. In addition, you may be eligible for free or low-cost health coverage through Covered California. Visit Covered California at www.coveredca.com to learn about health coverage options that are available for you and your dependents, and how you might qualify to get financial assistance with the cost of coverage. If you are under 26 years of age, you may be eligible for coverage as a dependent in a group health plan of your parent’s employer or under your parents’ individual market coverage. In addition, you may be eligible to buy individual health insurance directly from a health insurer or health plan, regardless of immigration status. Please examine your options carefully to see if other options are more affordable and whether you are currently eligible to enroll in these other forms of coverage pursuant to an open or special enrollment period. (2) The notice shall be prominently displayed in clear, conspicuous, 14-point bold type. (3) In addition to the enrollment materials, the notice also may be provided on the internet website of the institution of higher education. (i) (1) A “student administrative health fee” is a fee charged by the institution of higher education on a periodic basis to students of the institution of higher education to offset the cost of providing health care through health clinics regardless of whether the students utilize the health clinics or enroll in student health insurance coverage. (2) Notwithstanding the requirements under Section 10112.2, a student administrative health fee is not considered a cost-sharing requirement with respect to specified recommended preventive services. (j) A “health factor” means, in relation to an individual, any of the following health status-related factors: (1) Health status. (2) Medical condition, including both 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 regulation, rule, or guidance issued under Section 2705 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-26). (k) The commissioner may exercise the authority provided by this code and the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) to implement and enforce this section and all sections referenced in this section. If the commissioner assesses an administrative penalty for a violation, any hearing that is requested by the insurer may be conducted by an administrative law judge of the administrative hearing bureau of the department under the formal procedure of Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. An administrative penalty shall not exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, shall not exceed ten thousand dollars ($10,000) for each violation. This subdivision does not impair or restrict the commissioner’s authority pursuant to another provision of this code or the Administrative Procedure Act. (Amended by Stats. 2025, Ch. 272, Sec. 1. (AB 594) Effective January 1, 2026.)
  159. 10965.1.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    This chapter applies only to nongrandfathered individual health benefit plans offered by a health insurer, except as provided in Section 10965.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.1. Except as provided in Section 10965.15, the provisions of this chapter shall only apply with respect to nongrandfathered individual health benefit plans offered by a health insurer, and shall apply in addition to other provisions of this chapter and the rules adopted thereunder. (Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. (AB 2 1x) Effective September 30, 2013.)
  160. 10965.11.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    A health insurer may refuse to offer or delay certain individual health benefit plans in limited situations, including outside approved service areas, when resources or reserves are insufficient, and must keep renewal obligations intact.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.11. (a) A health insurer shall not be required to offer an individual health benefit plan or accept applications for the plan pursuant to Section 10965.3 in the case of any of the following: (1) To an individual who does not live or reside within the insurer’s approved service areas. (2) (A) Within a specific service area or portion of a service area, if the insurer reasonably anticipates and demonstrates to the satisfaction of the commissioner both 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 individual because of its obligations to existing insureds. (ii) It is applying this subparagraph uniformly to all individuals without regard to the claims experience of those individuals or any health status-related factor relating to those individuals. (B) A health insurer that cannot offer an individual health benefit plan to individuals 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) shall not offer an individual health benefit plan in that area until the later of the following dates: (i) The 181st day after the date coverage is denied pursuant to this paragraph. (ii) The date the insurer notifies the commissioner that it has the ability to deliver services to individuals, and certifies to the commissioner that from the date of the notice it will enroll all individuals requesting coverage in that area from the insurer. (C) Subparagraph (B) shall not limit the insurer’s ability to renew coverage already in force or relieve the insurer of the responsibility to renew that coverage as described in Section 10273.6. (D) Coverage offered within a service area after the period specified in subparagraph (B) shall be subject to this section. (b) (1) A health insurer may decline to offer an individual health benefit plan to an individual if the insurer demonstrates to the satisfaction of the commissioner 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 commissioner shall consider, but not be limited to, the insurer’s compliance with the requirements of this part and the rules adopted thereunder. (B) It is applying this subdivision uniformly to all individuals without regard to the claims experience of those individuals or any health status-related factor relating to those individuals. (2) A health insurer that denies coverage to an individual under paragraph (1) shall not offer coverage before the later of the following dates: (A) The 181st day after the date coverage is denied pursuant to this subdivision. (B) The date the insurer demonstrates to the satisfaction of the commissioner that the insurer has sufficient financial reserves necessary to underwrite additional coverage. (3) Paragraph (2) shall not limit the insurer’s ability to renew coverage already in force or relieve the insurer of the responsibility to renew that coverage as described in Section 10273.6. Coverage offered within a service area after the period specified in paragraph (2) shall be subject to this section. (c) This chapter shall not be construed to limit the commissioner’s authority to develop and implement a plan of rehabilitation for a health insurer whose financial viability or organizational and administrative capacity has become impaired, to the extent permitted by PPACA. (d) This section shall not apply to an individual health benefit plan that is a grandfathered plan. (Amended by Stats. 2014, Ch. 71, Sec. 105. (SB 1304) Effective January 1, 2015.)
  161. 10965.13.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    A health insurer must tell certain applicants and policyholders about Exchange coverage and the applicable enrollment periods, unless the plan is a grandfathered health plan.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.13. (a) A health insurer that receives an application for an individual health benefit plan outside the Exchange during the initial open enrollment period, an annual enrollment period, or a special enrollment period described in Section 10965.3 shall inform the applicant that he or she may be eligible for lower cost coverage through the Exchange and shall inform the applicant of the applicable enrollment period provided through the Exchange described in Section 10965.3. (b) On or before October 1, 2013, and annually every October 1 thereafter, a health insurer shall issue a notice to a policyholder enrolled in an individual health benefit plan offered outside the Exchange. The notice shall inform the policyholder that he or she may be eligible for lower cost coverage through the Exchange and shall inform the policyholder of the applicable open enrollment period and special enrollment periods provided through the Exchange described in Section 10965.3. (c) This section shall not apply where the individual health benefit plan described in subdivision (a) or (b) is a grandfathered health plan. (Amended by Stats. 2017, Ch. 468, Sec. 8. (AB 156) Effective January 1, 2018.)
  162. 10965.15.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    A health insurer must give specified notices to policyholders in grandfathered individual health plans and may not market those plans to enroll dependents for certain later policy years.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.15. (a) On or before October 1, 2013, and annually every October 1 thereafter, a health insurer shall issue the following notice to all policyholders enrolled in an individual health benefit plan that is a grandfathered health plan: New improved health insurance options are available in California. You currently have health insurance that is not required to follow many of the new laws. For example, your policy may not provide preventive health services without you having to pay any cost sharing (copayments or coinsurance). Also your current policy may be allowed to increase your rates based on your health status while new policies cannot. You have the option to remain in your current policy or switch to a new policy. Under the new rules, a health insurance company cannot deny your application based on any health conditions you may have. For more information about your options, please contact Covered California at ____, your policy representative or insurance agent, or an entity paid by Covered California to assist with health coverage enrollment, such as a navigator or an assister. (b) Commencing October 1, 2013, a health insurer shall include the notice described in subdivision (a) in any renewal material of the individual grandfathered health plan and in any application for dependent coverage under the individual grandfathered health plan. (c) A health insurer shall not advertise or market an individual health benefit plan that is a grandfathered health plan for purposes of enrolling a dependent of a policyholder into the plan for policy years on or after January 1, 2014. Nothing in this subdivision shall be construed to prohibit an individual enrolled in an individual grandfathered health plan from adding a dependent to that plan to the extent permitted by PPACA. (Amended by Stats. 2014, Ch. 31, Sec. 34. (SB 857) Effective June 20, 2014.)
  163. 10965.16.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    This chapter must be implemented in a way that meets or exceeds PPACA requirements, unless another part of the chapter says otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.16. Except as otherwise provided in this chapter, this chapter shall be implemented to the extent that it meets or exceeds the requirements set forth in PPACA. (Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. (AB 2 1x) Effective September 30, 2013.)
  164. 10965.17.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    The commissioner may adopt emergency regulations for this chapter by December 31, 2014, may readopt one substantially equivalent emergency regulation, must consult the Director of the Department of Managed Health Care before adopting regulations, and the initial emergency regulations and one readoption are exempt from Office of Administrative Law review.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.17. (a) The commissioner may, no later than December 31, 2014, adopt emergency regulations implementing this chapter. The commissioner 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 chapter and the one readoption of emergency regulation authorized by this section shall be deemed an emergency and necessary for the immediate preservation of the public peace, health, safety, or general welfare. Initial emergency regulations and the one readoption of emergency regulations authorized by this section shall be exempt from review by the Office of Administrative Law. 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 one year, by which time final regulations may be adopted. The commissioner shall consult with the Director of the Department of Managed Health Care prior to adopting any regulations pursuant to this subdivision for the specific purpose of ensuring, to the extent practical, that there is consistency of regulations applicable to entities regulated by the commissioner and those regulated by the Department of Managed Health Care. (Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. (AB 2 1x) Effective September 30, 2013.)
  165. 10965.18.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    This section defines a bridge plan product and requires certain health insurers to file policy forms, provide enrollment periods, keep a 85% medical loss ratio, and report that ratio to the department.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.18. (a) For purposes of this chapter, a bridge plan product shall mean an individual health benefit plan that is offered by a health insurer licensed under this part that contracts with the Exchange pursuant to Title 22 (commencing with Section 100500) of the Government Code. (b) On and after September 30, 2013, if a health insurance policy has not been filed with the commissioner, a health insurer that contracts with the Exchange to offer a qualified bridge plan product pursuant to Section 100504.5 of the Government Code shall file the policy form with the commissioner pursuant to Section 10290. (c) (1) Notwithstanding subdivision (a) of Section 10965.3, a health insurer selling a bridge plan product shall not be required to fairly and affirmatively offer, market, and sell the health insurer’s bridge plan product except to individuals eligible for the bridge plan product pursuant to the State Department of Health Care Services and the Medi-Cal managed care plan’s contract entered into pursuant to Section 14005.70 of the Welfare and Institutions Code, provided the health care service plan meets the requirements of subdivision (b) of Section 14005.70 of the Welfare and Institutions Code. (2) Notwithstanding subdivision (c) of Section 10965.3, a health insurer selling a bridge plan product shall provide an initial open enrollment period of six months, and an annual enrollment period and a special enrollment period consistent with the annual enrollment and special enrollment periods of the Exchange. (d) A health insurer that contracts with the Exchange to offer a qualified bridge plan product pursuant to Section 100504.5 of the Government Code shall maintain a medical loss ratio of 85 percent for the bridge plan product. A health insurer shall utilize, to the extent possible, the same methodology for calculating the medical loss ratio for the bridge plan product that is used for calculating the health insurer’s medical loss ratio pursuant to Section 10112.25 and shall report its medical loss ratio for the bridge plan product to the department as provided in Section 10112.25. (e) This section shall become inoperative on the October 1 that is five years after the date that federal approval of the bridge plan option occurs, and, as of the second January 1 thereafter, is repealed, unless a later enacted statute that is enacted before that date deletes or extends the dates on which it becomes inoperative and is repealed. (Added by renumbering Section 10961 by Stats. 2014, Ch. 442, Sec. 8. (SB 1465) Effective September 18, 2014. Conditionally inoperative, on date prescribed by its own provisions. Repealed, by its own provisions, on second January 1 after inoperative date.)
  166. 10965.3.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    Health insurers must offer and enroll individual health plans only under specified enrollment rules, may not use health status to decide eligibility, and must not impose preexisting condition exclusions for covered individual plans.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.3. (a) (1) On and after October 1, 2013, a health insurer shall fairly and affirmatively offer, market, and sell all of the insurer’s health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the insurer provides or arranges for the provision of health care services. A health insurer shall limit enrollment in individual health benefit plans to open enrollment periods, annual enrollment periods, and special enrollment periods as provided in subdivisions (c) and (d). (2) A health insurer shall allow the policyholder of an individual health benefit plan to add a dependent to the policyholder’s health benefit plan at the option of the policyholder, consistent with the open enrollment, annual enrollment, and special enrollment period requirements in this section. (b) An individual health benefit plan issued, amended, or renewed on or after January 1, 2014, shall not impose any preexisting condition provision upon any individual. (c) (1) With respect to individual health benefit plans offered outside of the Exchange, a health insurer shall provide an initial open enrollment period from October 1, 2013, to March 31, 2014, inclusive, an annual enrollment period for the policy year beginning on January 1, 2015, from November 15, 2014, to February 15, 2015, inclusive, annual enrollment periods for policy years beginning on or after January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from October 15 of the preceding calendar year, to January 15 of the benefit year, inclusive. (2) With respect to individual health benefit plans offered through the Exchange, a health insurer shall provide an annual enrollment period for the policy years beginning on January 1, 2016, to December 31, 2018, inclusive, from November 1, of the preceding calendar year, to January 31 of the benefit year, inclusive, and annual enrollment periods for policy years beginning on or after January 1, 2019, from November 1 to December 15 of the preceding calendar year, inclusive. (3) With respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2019, a health insurer shall provide a special enrollment period for all individuals selecting an individual health benefit plan through the Exchange from October 15 to October 31 of the preceding calendar year, inclusive, and from December 16, of the preceding calendar year, to January 15 of the benefit year, inclusive. An application for a health benefit plan submitted during these two special enrollment periods shall be treated the same as an application submitted during the annual open enrollment period. The effective date of coverage for plan selections made between October 15 and October 31, inclusive, shall be January 1 of the benefit year, and for plan selections made from December 16 to January 15, inclusive, shall be no later than February 1 of the benefit year. (4) Pursuant to Section 147.104(b)(2) of Title 45 of the Code of Federal Regulations, for individuals enrolled in noncalendar year individual health plan contracts, a health insurer shall also provide a limited open enrollment period beginning on the date that is 30 calendar days prior to the date the policy year ends in 2014. (d) (1) Subject to paragraph (2), commencing January 1, 2014, a health insurer shall allow an individual to enroll in or change individual health benefit plans as a result of the following triggering events: (A) The individual or the individual’s dependent loses minimum essential coverage. For purposes of this paragraph, both of the following definitions shall apply: (i) “Minimum essential coverage” has the same meaning as that term is defined in Section 1345.5 of the Health and Safety Code or subsection (f) of Section 5000A of the Internal Revenue Code (26 U.S.C. Sec. 5000A). (ii) “Loss of minimum essential coverage” includes, but is not limited to, loss of that coverage due to the circumstances described in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal Regulations and the circumstances described in Section 1163 of Title 29 of the United States Code. “Loss of minimum essential coverage” also includes loss of that coverage for a reason that is not due to the fault of the individual. (iii) “Loss of minimum essential coverage” does not include loss of that coverage due to the individual’s failure to pay premiums on a timely basis or situations allowing for a rescission, subject to clause (ii) and Sections 10119.2 and 10384.17. (B) The individual gains a dependent or becomes a dependent. (C) The individual is mandated to be covered as a dependent pursuant to a valid state or federal court order. (D) The individual has been released from incarceration. (E) The individual’s health coverage issuer substantially violated a material provision of the health coverage contract. (F) The individual gains access to new health benefit plans as a result of a permanent move. (G) The individual was receiving services from a contracting provider under another health benefit plan, as defined in Section 10965 of this code or Section 1399.845 of the Health and Safety Code, for one of the conditions described in subdivision (a) of Section 10133.56 of this code and that provider is no longer participating in the health benefit plan. (H) The individual demonstrates to the Exchange, with respect to health benefit plans offered through the Exchange, or to the department, with respect to health benefit plans offered outside the Exchange, that the individual did not enroll in a health benefit plan during the immediately preceding enrollment period available to the individual because the individual was misinformed that the individual was covered under minimum essential coverage. (I) The individual is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service under Title 32 of the United States Code. (J) With respect to individual health benefit plans offered through the Exchange, in addition to the triggering events listed in this paragraph, any other events listed in Section 155.420(d) of Title 45 of the Code of Federal Regulations. (2) With respect to individual health benefit plans offered outside the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to apply for coverage from a health care service plan subject to this section. With respect to individual health benefit plans offered through the Exchange, an individual shall have 60 days from the date of a triggering event identified in paragraph (1) to select a plan offered through the Exchange, unless a longer period is provided in Part 155 (commencing with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the Code of Federal Regulations. (e) With respect to individual health benefit plans offered through the Exchange, the effective date of coverage required pursuant to this section shall be consistent with the dates specified in Section 155.410 or 155.420 of Title 45 of the Code of Federal Regulations, as applicable. A dependent who is a registered domestic partner pursuant to Section 297 of the Family Code shall have the same effective date of coverage as a spouse. (f) With respect to an individual health benefit plan offered outside the Exchange, the following provisions shall apply: (1) After an individual submits a completed application form for a plan, the insurer shall, within 30 days, notify the individual of the individual’s actual premium charges for that plan established in accordance with Section 10965.9. The individual shall have 30 days in which to exercise the right to buy coverage at the quoted premium charges. (2) With respect to an individual health benefit plan for which an individual applies during the initial open enrollment period described in paragraph (1) of subdivision (c), when the policyholder submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs earlier, by December 15, 2013, coverage under the individual health benefit plan shall become effective no later than January 1, 2014. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16, 2013, to December 31, 2013, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment. (3) With respect to an individual health benefit plan for which an individual applies during the annual open enrollment period described in paragraph (1) of subdivision (c), when the individual submits a premium payment, based on the quoted premium charges, and that payment is delivered or postmarked, whichever occurs later, by December 15 of the preceding calendar year, coverage shall become effective on January 1 of the benefit year. When that payment is delivered or postmarked within the first 15 days of any subsequent month, coverage shall become effective no later than the first day of the following month. When that payment is delivered or postmarked between December 16 to December 31, inclusive, or after the 15th day of any subsequent month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment. (4) With respect to an individual health benefit plan for which an individual applies during a special enrollment period described in subdivision (d), the following provisions shall apply: (A) When the individual 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 shall become effective no later than the first day of the following month. When the premium payment is neither delivered nor postmarked until after the 15th day of the month, coverage shall become effective no later than the first day of the second month following delivery or postmark of the payment. (B) Notwithstanding subparagraph (A), in the case of a birth, adoption, or placement for adoption, the coverage shall be effective on the date of birth, adoption, or placement for adoption. (C) Notwithstanding subparagraph (A), in the case of marriage or becoming a registered domestic partner or in the case where a qualified individual loses minimum essential coverage, the coverage effective date shall be the first day of the month following the date the insurer receives the request for special enrollment. (g) (1) A health insurer shall not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of an individual health benefit plan based on any of the following factors: (A) Health status. (B) Medical condition, including physical and mental illnesses. (C) Claims experience. (D) Receipt of health care. (E) Medical history. (F) Genetic information. (G) Evidence of insurability, including conditions arising out of acts of domestic violence. (H) Disability. (I) Any other health status-related factor as determined by any federal regulations, rules, or guidance issued pursuant to Section 2705 of the federal Public Health Service Act (Public Law 78-410). (2) Notwithstanding subdivision (c) of Section 10291.5, a health insurer shall not require an individual applicant or the applicant’s dependent to fill out a health assessment or medical questionnaire prior to enrollment under an individual health benefit plan. A health insurer shall not acquire or request information that relates to a health status-related factor from the applicant or the applicant’s dependent or any other source prior to enrollment of the individual. (h) (1) A health insurer shall consider as a single risk pool for rating purposes in the individual market the claims experience of all insureds and enrollees in all nongrandfathered individual health benefit plans offered by that insurer in this state, whether offered as health care service plan contracts or individual health insurance policies, including those insureds and enrollees who enroll in individual coverage through the Exchange and insureds and enrollees who enroll in individual coverage outside the Exchange. Student health insurance coverage, as such coverage is defined in Section 147.145(a) of Title 45 of the Code of Federal Regulations, shall not be included in a health insurer’s single risk pool for individual coverage. (2) Each calendar year, a health insurer shall establish an index rate for the individual market in the state based on the total combined claims costs for providing essential health benefits, as defined pursuant to Section 1302 of PPACA, within the single risk pool required under paragraph (1). The index rate shall be adjusted on a marketwide basis based on the total expected marketwide payments and charges under the risk adjustment program established for the state pursuant to Section 1343 of PPACA and Exchange user fees, as described in subdivision (d) of Section 156.80 of Title 45 of the Code of Federal Regulations. The premium rate for all of the health benefit plans in the individual market within the single risk pool required under paragraph (1) shall use the applicable marketwide adjusted index rate, subject only to the adjustments permitted under paragraph (3). (3) A health insurer may vary premium rates for a particular health benefit plan from its index rate based only on the following actuarially justified plan-specific factors: (A) The actuarial value and cost-sharing design of the health benefit plan. (B) The health benefit plan’s provider network, delivery system characteristics, and utilization management practices. (C) The benefits provided under the health benefit plan that are in addition to the essential health benefits, as defined pursuant to Section 1302 of PPACA and Section 10112.27. These additional benefits shall be pooled with similar benefits within the single risk pool required under paragraph (1) and the claims experience from those benefits shall be utilized to determine rate variations for plans that offer those benefits in addition to essential health benefits. (D) With respect to catastrophic plans, as described in subsection (e) of Section 1302 of PPACA, the expected impact of the specific eligibility categories for those plans. (E) Administrative costs, excluding any user fees required by the Exchange. (i) This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014. (j) This section shall not apply to a grandfathered health plan. (Amended by Stats. 2021, Ch. 764, Sec. 11. (SB 326) Effective January 1, 2022.)
  167. 10965.4.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    Health insurers must provide an annual enrollment period for individual health benefit plans, with different coverage for plans inside and outside the Exchange.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.4. (a) Notwithstanding paragraph (1) of subdivision (c) of Section 10965.3, with respect to individual health benefit plans offered outside of the Exchange, a health insurer shall provide an annual enrollment period for policy years beginning on or after January 1, 2020, from November 1 of the preceding calendar year, to January 31 of the benefit year, inclusive. (b) Notwithstanding paragraphs (2) and (3) of subdivision (c) of Section 10965.3, with respect to individual health benefit plans offered through the Exchange, for policy years beginning on or after January 1, 2023, a health insurer shall provide an annual enrollment period from November 1 of the preceding calendar year to January 31 of the benefit year, inclusive. (c) Notwithstanding paragraph (3) of subdivision (c) of Section 10965.3, with respect to individual health benefit plans offered outside and through the Exchange, the effective date of coverage shall be as follows: (1) No later than January 1 of the benefit year for plan selection made from November 1 to December 31 of the preceding calendar year, inclusive. (2) No later than February 1 of the benefit year for plan selection made from January 1 to January 31 of the benefit year, inclusive. (Amended by Stats. 2022, Ch. 545, Sec. 6. (SB 1473) Effective September 25, 2022.)
  168. 10965.5.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    Health insurers, agents, and brokers must not steer individuals away from individual coverage or use marketing and compensation practices that discriminate based on health-related or other listed personal factors.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.5. (a) Commencing on October 1, 2013, a health insurer or agent or broker shall not, directly or indirectly, engage in the following activities: (1) Encourage or direct an individual to refrain from filing an application for individual coverage with an insurer because of the health status, claims experience, industry, occupation, or geographic location, provided that the location is within the insurer’s approved service area, of the individual. (2) Encourage or direct an individual to seek individual coverage from another health care service plan or health insurer or the California Health Benefit Exchange because of the health status, claims experience, industry, occupation, or geographic location, provided that the location is within the insurer’s approved service area, of the individual. (3) Employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs or discriminate based on an individual’s race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions. (b) Commencing on October 1, 2013, a health insurer shall not, directly or indirectly, enter into any contract, agreement, or arrangement with a broker or agent that provides for or results in the compensation paid to a broker or agent for the sale of an individual health benefit plan to be varied because of the health status, claims experience, industry, occupation, or geographic location of the individual. This subdivision does not apply to a compensation arrangement that provides compensation to a broker or agent 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 individual. (c) This section shall only apply with respect to individual health benefit plans for policy years on or after January 1, 2014. (d) This section shall be enforced in the same manner as Section 790.03, including through Sections 790.05 and 790.035. (Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. (AB 2 1x) Effective September 30, 2013.)
  169. 10965.7.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    An individual health benefit plan must be renewable at the insured’s option, except where cancellation, rescission, or nonrenewal is allowed under the referenced federal rule. Insurers that stop offering new individual health benefit plans must still follow this chapter for business already covered by it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.7. (a) An individual health benefit plan shall be renewable at the option of the insured except as permitted to be canceled, rescinded, or not renewed pursuant to Section 155.430(b) of Title 45 of the Code of Federal Regulations. (b) Any insurer that ceases to offer for sale new individual health benefit plans pursuant to Section 10273.6 shall continue to be governed by this chapter with respect to business conducted under this chapter. (Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. (AB 2 1x) Effective September 30, 2013.)
  170. 10965.9.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. )

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    Health insurers may rate individual health benefit plans only by the factors listed here, and must not use any other factor.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 9.9. Individual Access to Health Insurance [10965 - 10965.18] ( Chapter 9.9 added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 19. ) ## 10965.9. (a) With respect to individual health benefit plans issued, amended, or renewed on or after January 1, 2014, a health insurer may use only the following characteristics of an individual, and any dependent thereof, for purposes of establishing the rate of the individual health benefit plan covering the individual and the eligible dependents thereof, along with the health benefit plan selected by the individual: (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 federal 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 plan issuance or renewal, as applicable, and shall not vary by more than three to one for like individuals of different ages 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 Managed Health Care, 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 make a report to the appropriate policy committees of the Legislature. (3) Whether the plan covers an individual or family, as described in PPACA. (b) The rate for a health benefit plan subject to this section shall not vary by any factor not described in this section. (c) With respect to family coverage under an individual health benefit plan, the rating variation permitted under paragraph (1) of subdivision (a) shall be applied based on the portion of the premium attributable to each family member covered under the plan. The total premium for family coverage shall be determined by summing the premiums for each individual family member. In determining the total premium for family members, premiums for no more than the three oldest family members who are under 21 years of age shall be taken into account. (d) The rating period for rates subject to this section shall be from January 1 to December 31, inclusive. (e) This section shall not apply to an individual health benefit plan that is a grandfathered health plan. (f) The requirement for submitting a report imposed under subparagraph (B) of paragraph (2) of subdivision (a) is inoperative on June 1, 2021, pursuant to Section 10231.5 of the Government Code. (Amended by Stats. 2021, Ch. 764, Sec. 12. (SB 326) Effective January 1, 2022.)
  171. 10970.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. )

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    Fraternal benefit societies are governed by this chapter and are exempt from other code provisions, with listed exceptions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. ) ## 10970. Fraternal benefit societies shall be governed by this chapter and shall be exempt from all other provisions of this code, except: (a) Those provisions prior to Division 1 entitled “General Provisions.” (b) Sections 880, 881, 10112, 10114, 10117, 10118, 10119, 10120, 10171, 10172, and 10191. (c) Article 15 (commencing with Section 1070) and Article 17 (commencing with Section 1100) of Chapter 1 of Part 2 of Division 1. (d) Those provisions specifically referred to in this chapter to the extent made necessary by such reference. A statute relating to insurance shall not apply to them, unless they are expressly designated therein. (Amended by Stats. 1995, Ch. 166, Sec. 1. Effective January 1, 1996.)
  172. 10971.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. )

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    This chapter generally does not apply to certain lodges, member associations, court-authorized organizations, and related reinsurance plans, subject to benefit limits and other conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. ) ## 10971. This chapter shall not, except as provided by Sections 10972 and 10974, affect: (a) A lodge operating under the lodge system, which provides in its bylaws or rules or regulations for the payment of death benefits not exceeding one thousand dollars ($1,000) on the death of a member or for the payment of disability benefits not exceeding one thousand dollars ($1,000) to a member during any period of 12 consecutive calendar months, or both of those types of benefits. (b) The subordinate branch of a lodge, as a lodge is defined in Section 10972, or any association formed by the members of a lodge, which association confines its membership to the members of such lodge, which subordinate branch or association (1) is organized without capital stock, (2) is organized and operated solely for the benefit of its members or their beneficiaries and not for profit, and (3) provides in its bylaws or rules or regulations for the payment of either or both of the following benefits: (i) a benefit of not exceeding one thousand dollars ($1,000) on the death of a member from any cause; (ii) a benefit of not exceeding one thousand dollars ($1,000) on the accidental death of a member or benefits not exceeding one thousand dollars ($1,000) during any period of 12 consecutive calendar months to a member for his or her disability. (c) A lodge operating under the lodge system or any subordinate branch thereof or any association formed by the members thereof which association confines its membership to the members of such lodge, which subordinate branch or association (1) is organized without capital stock, (2) is organized and operated solely for the benefit of its members or their beneficiaries and not for profit, and (3) provides in its bylaws or rules or regulations for the payment of death benefits not exceeding five thousand dollars ($5,000) on the death of a member or for the payment of disability benefits not exceeding one thousand dollars ($1,000) to a member during any period of 12 consecutive calendar months, or both of those types of benefits. (d) An organization authorized to operate pursuant to a superior court judgment issued between January and April of 1940 whether or not the amount of benefits offered by that organization conforms to that judgment. (e) Contracts of reinsurance on a plan under subdivisions (a), (b), (c), or (d). (Amended by Stats. 1996, Ch. 391, Sec. 1. Effective January 1, 1997.)
  173. 10972.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. )

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    A lodge operating under the lodge system must meet specified membership, governance, and nonprofit characteristics, and certain lodges that issue benefit policies or certificates must comply with this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. ) ## 10972. (1) A lodge operating under the lodge system, as this term is used in Section 10971, shall have all of the following characteristics: (a) It is organized without capital stock. (b) It is organized and operated solely for the benefit of its members or their beneficiaries and not for profit. (c) It has a lodge system and representative form of government within the meaning of Section 10992, holds regular meetings at periodical intervals, and has a ritualistic form of work, and it has not less than 10 subordinate branches with more than a total of 1,000 dues-paying, active members in good standing. (2) Any lodge, subordinate branch or association otherwise covered by Section 10971, which issues to any person a policy or certificate providing for the payment of benefits, shall comply with all the requirements of this chapter. (Repealed and added by Stats. 1951, Ch. 1193.)
  174. 10973.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. )

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    The commissioner may require information from any society to decide whether the society is exempt from this chapter.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. ) ## 10973. The commissioner may require from any society such information as will enable him to determine whether or not such society is exempt from the provisions of this chapter. (Repealed and added by Stats. 1951, Ch. 1193.)
  175. 10974.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. )

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    An exempt lodge, subordinate branch, or member association must not give, allow, or promise compensation for recruiting new members.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. ) ## 10974. A lodge, subordinate branch thereof or association formed by the members thereof which is exempted from the requirements of this chapter by Section 10971 shall not give or allow, nor promise to give or allow, any compensation for procuring new members. (Repealed and added by Stats. 1951, Ch. 1193.)
  176. 10975.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. )

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    Certain qualifying fraternal benefit societies may get a certificate of authority, and once they do, they are subject to this chapter except for some medical-exam and policy-detail requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. ) ## 10975. Any fraternal benefit society organized and operating within the definition set forth in Sections 10990 to 10992 on July 29, 1911, providing benefits in case of death or disability resulting solely from accidents but not obligating itself to pay death or sick benefits, may obtain a certificate of authority under this chapter. Such society shall have all the privileges and shall be subject to all the provisions of this chapter, except those requiring medical examination, valuations of policies, and that the policies specify the amount of benefits. (Repealed and added by Stats. 1951, Ch. 1193.)
  177. 10976.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. )

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    Certain fraternal benefit societies may keep and use their existing rights, and some may incorporate or amend their articles; amendments must be filed with the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 1. Scope of Chapter [10970 - 10976] ( Article 1 added by Stats. 1951, Ch. 1193. ) ## 10976. Any incorporated fraternal benefit society engaged on July 29, 1911, in transacting business in this State may exercise all of the rights conferred by this chapter, and all of the rights, powers and privileges not inconsistent with this chapter, which were theretofore exercised or possessed by it under its charter. Any unincorporated fraternal benefit society thus engaged may incorporate hereunder. A society already incorporated shall not be required to reincorporate hereunder. Any such society may amend its articles of incorporation. All such amendments shall be filed with the commissioner and shall become operative upon such filing, unless a later time is otherwise provided. (Repealed and added by Stats. 1951, Ch. 1193.)
  178. 10990.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. )

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    This section defines what counts as a fraternal benefit society, and says that “society” means fraternal benefit society in this chapter unless stated otherwise.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. ) ## 10990. Any incorporated society, order or supreme lodge, without capital stock, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which makes provision for the payment of benefits in accordance with this chapter, is hereby declared to be a fraternal benefit society. When used in this chapter, the word “society,” unless otherwise indicated, shall mean fraternal benefit society. (Repealed and added by Stats. 1951, Ch. 1193.)
  179. 10991.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. )

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    This section defines when a society is treated as operating on the lodge system.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. ) ## 10991. A society having a supreme legislative or governing body and subordinate lodges or branches by whatever name known, into which members are elected, initiated, or admitted in accordance with its constitution, laws, and ritual, which subordinate lodges or branches shall be required by the laws of the society to hold regular meetings at least once a month in furtherance of the purposes of the society, shall be deemed to be operating on the lodge system. (Amended by Stats. 1995, Ch. 166, Sec. 1.5. Effective January 1, 1996.)
  180. 10992.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. )

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    A society is treated as having a representative form of government only if it meets the listed governance and voting conditions.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. ) ## 10992. A society shall be deemed to have a representative form of government when: (a) It provides in its constitution or laws for a supreme legislative or governing body, composed of representatives elected either by the members or by delegates elected directly or indirectly by the members, together with such other members as may be prescribed by the society’s constitution and laws; (b) The representatives elected constitute a majority in number and have not less than two-thirds of the votes nor less than the votes required to amend its constitution and laws; (c) The meetings of the supreme legislative or governing body and the election of officers, representatives and delegates, by whatever name known, are held as often as once in four calendar years; (d) The members, officers, representatives and delegates, by whatever name known, shall not vote by proxy; and (e) The officers may be elected by the board of directors if the board of directors is itself elected by the supreme legislative or governing body. (Repealed and added by Stats. 1951, Ch. 1193.)
  181. 10993.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. )

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    Fraternal benefit societies covered by this chapter are treated as charitable and benevolent institutions, and their funds are exempt from most state and local taxes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 2. Definitions [10990 - 10993] ( Article 2 added by Stats. 1951, Ch. 1193. ) ## 10993. Every fraternal benefit society organized or admitted under this chapter is hereby declared to be a charitable and benevolent institution, and all of its funds shall be exempt from all and every state, county, district, municipal and school tax, other than taxes on real estate and office equipment. (Repealed and added by Stats. 1951, Ch. 1193.)
  182. 11.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. )

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    This section says tense words are read broadly: present includes past and future, and future includes present.

    ## Insurance Code - INS ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1935, Ch. 145. ) ## 11. The present tense includes the past and future tenses; and the future, the present. (Enacted by Stats. 1935, Ch. 145.)
  183. 110.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. )

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    This section defines common carrier liability insurance and says it covers loss from a common carrier’s liability for fatal or nonfatal accidents or injuries to any person, but not liability insurance or workers’ compensation insurance.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 1. THE CONTRACT [100 - 679.75] ( Part 1 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. Classes of Insurance [100 - 124.5] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## 110. Common carrier liability insurance includes insurance against loss resulting from liability of a common carrier for accident or injury, fatal or nonfatal, to any person but does not include liability or workers’ compensation insurance. (Amended by Stats. 2018, Ch. 231, Sec. 3. (AB 2045) Effective January 1, 2019.)
  184. 1100.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Insurer investments, deposits, purchases, and sales must be made in specified names, with limited alternative naming options and commissioner-approved nominees.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1100. In this state, all investments and deposits of the assets of an insurer, all purchases on behalf of an insurer, and all sales made of the property and effects of an insurer shall be made in its own name, or in that of a corporation authorized to act as a trustee under the laws of this state, or in the name of a nominee of such a corporation in accordance with any law of this state permitting such a trustee to make use of nominees, or in the name of a qualified custodian, qualified subcustodian, or qualified depository (as defined in Section 1104.9) or in the name of a nominee of a qualified custodian, qualified subcustodian, or qualified depository, provided that the nominee is not a corporation and, as to any nominee which is a partnership, the partnership shall consist solely of the employees, officers, or directors of the qualified custodian, qualified subcustodian, or qualified depository or a corporation which is a member of the same holding company system as the nominee, or any combination thereof, or in the name of a nominee approved by the commissioner. (Amended by Stats. 1988, Ch. 1466, Sec. 1.5.)
  185. 1100.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Admitted incorporated insurers may make otherwise permitted loan transactions in the state without any other license or certificate, and interest-rate restrictions do not apply to certain obligations, loans, or forbearances involving them.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1100.1. Every admitted incorporated insurer may under a certificate of authority issued pursuant to the provisions of Article 3 (commencing with Section 699), engage in this state in the type of loan transactions otherwise permitted by law without obtaining any other license or certificate. Pursuant to the authority contained in Section 1 of Article XV of the State Constitution, the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any obligation of, loans made by, or forbearances of, any incorporated admitted insurer. This section creates and authorizes incorporated admitted insurers as an exempt class of persons pursuant to Section 1 of Article XV of the Constitution. (Amended by Stats. 1981, Ch. 979, Sec. 1.)
  186. 1101.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Certain admitted insurer insiders are barred from taking or profiting from money, deals, or insurer assets tied to purchases, sales, or loans, unless a stated exception applies.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1101. (a) An admitted insurer’s officers, directors, trustees, and any persons who have authority in the management of the insurer’s funds, shall not, unless otherwise provided in this code: (1) Receive any money or valuable thing for negotiating, procuring, recommending, or aiding in, any purchase by or sale to such insurer of any property, or any loan from such insurer. (2) Be pecuniarily interested as principal, coprincipal, agent, attorney, or beneficiary, in any such purchase, sale, or loan. (3) Directly or indirectly purchase, or be interested in the purchase of, any of the assets of the insurer. (b) This section shall not apply to: (1) The purchase or exchange of stock of an admitted insurer by an admitted insurer or between admitted insurers nor to any merger, consolidation, or corporate reorganization of such insurers, and shall not apply as to such purchase, merger, exchange, consolidation, or reorganization, nor to the officers, directors, trustees, or any persons having authority in the management of such insurers funds in respect to any such transaction, and no such transaction shall be either void or voidable, if: (i) The transaction is just and reasonable as to the insurers involved at the time it is authorized or approved and if no such officer, director, trustee, or other person having authority in the management of such insurers funds receives any money or other valuable thing, other than his or her usual compensation for his or her regular duties, for negotiating, procuring, recommending, or aiding in such transaction, and, either of the following apply: (ii) Any interest in such transaction on the part of any officers, directors, trustees, or persons who have authority in the management of any such insurer’s funds is disclosed or known to its board of directors or committee, authorizing, approving, or ratifying the transaction, and noted in the minutes thereof, and the board or committee authorizes, approves, or ratifies the transaction in good faith by a vote sufficient for the purpose without counting the vote or votes of any interested officers, directors, trustees, or persons who have authority in the management of the funds of any such insurer. (iii) The fact of such interest is disclosed or known to the shareholders in the case of a stock insurance company, or in the case of a mutual insurer to the policyholders, and they approve or ratify the transaction in good faith by a vote or written consent of a majority of the shares or policyholders, as the case may be, entitled to vote, unless the consent or vote of more than a majority is otherwise required, in which event the vote or written consent shall be that so otherwise required. Any such officer, director, trustee, or other person who has such interest may be counted in determining the presence of a quorum at any meeting that authorizes, approves, or ratifies such transaction. (2) Any transaction relating to an insurer if the transaction meets the other requirements of subdivision (b) and such officers, directors, and trustees of the insurer do not in the aggregate own more than 5 percent of the stock of any corporation with which the insurer is entering into a transaction. (3) Any transaction if prior to its consummation the insurer has applied for and obtained from the commissioner a certificate of exemption in respect to the specific transaction therein described and such transaction is consummated in conformity with such certificate and the representations and disclosures made in, or in connection with, the application therefor. (4) To obtain the certificate of exemption the insurer shall file with the commissioner a written application, accompanied by a filing fee of seven hundred five dollars ($705). The application shall be verified as provided in Section 834, be in a form as the commissioner shall require and shall contain all of the following: (A) A specific description of the particular transaction for which the certificate is sought. (B) Copies of all contracts and other legal documents involved or to be involved in the transaction. (C) A description of all assets involved in the transaction. (D) The names, titles, capacities, and business relationships of all persons in any way involved in the transaction who are connected with the insurer or any of its affiliates, officers, directors, managers, or controlling persons or entities in any of the capacities described in this section. (E) A description of any and all considerations on either or any side of the transaction. (F) Evidence that its governing board has specifically authorized the filing of the application. (G) Such other information, opinions, or matters as the commissioner may require. The commissioner may issue such certificate of exemption if he or she finds, with or without a hearing, that the transaction is fair, just, and equitable, and not hazardous to policyholders, stockholders, or creditors. The commissioner may impose such conditions, including, but not limited to, disclosure of the circumstances and terms of the transaction either before or after its consummation either publicly or to such persons and entities as he or she may designate and the approval of the transaction by such persons or entities as he or she may designate. He or she may also require that a report of the transaction be filed with him or her subsequent to its consummation in such form and containing such information as he or she may prescribe. The certificate of exemption issued pursuant to paragraph (3) of subdivision (b) shall only exempt the transaction from the prohibitions of this section and shall not affect the rights or remedies of any persons under any other law. The amendment made to this section at the 1955 General Session shall not apply to contracts, sales, transfers, or other transactions entered into prior to the effective date hereof. The commissioner shall not issue a certificate of exemption under paragraph (3) of subdivision (b) in respect to any transaction consummated prior to the effective date of the amendment made to this section at the 1967 Regular Session. (c) Whenever it appears to the commissioner that any insurer, or any director, officer, employee, or agent thereof, has committed or is about to commit a violation of this section, the commissioner may apply to the superior court for the county in which the principal office of the insurer is located, or if such insurer has no such office in this state, then to the Superior Court for the County of Los Angeles, or for the City and County of San Francisco, for an order enjoining such insurer, or such director, officer, employee, or agent thereof, from violating or continuing to violate this section, and for such other equitable relief as the nature of the case and the interests of the insurer’s policyholders, creditors, and shareholders or the public may require. (Amended by Stats. 2017, Ch. 534, Sec. 21. (AB 1699) Effective January 1, 2018.)
  187. 1101.1.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    Certain officers and employees of an admitted insurer must not receive brokerage commissions on reinsurance ceded by that insurer, and the insurer must not pay those commissions.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1101.1. An officer, excluding a director who holds no other office, or employee of an admitted insurer shall not receive any money or valuable thing directly or indirectly as a brokerage commission on reinsurance ceded by such insurer and an insurer shall not pay such commissions. This provision shall not apply to brokerage or commissions authorized by the board of directors of the ceding insurer as compensation for services actually rendered nor to dividends received by any such officer or employee upon the stock of a corporation in which such officer or employee or his immediate family does not own a controlling interest or in fact exercises control. (Added by Stats. 1951, Ch. 592.)
  188. 11010.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    Certain U.S. citizens may form a fraternal benefit society by signing and acknowledging articles of incorporation, and the articles must include specified information.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11010. Seven or more United States citizens, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign, and acknowledge articles of incorporation before an officer competent to take acknowledgment of deeds. The articles of incorporation shall state: (a) The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company as to be misleading or confusing. (b) The purposes for which it is being formed, and the mode in which its corporate powers are to be exercised. The purposes shall not include more liberal powers than are granted by this chapter, provided that any lawful, social, intellectual, educational, charitable, benevolent, moral, fraternal, or religious purposes shall be set forth among the purposes of the society. (c) The names and residences of the incorporators, and the names, residences and official titles of all the officers, trustees, directors, or other persons who are to have and exercise the general control of the management of the affairs and funds of the society for the first year, or until the ensuing election at which all officers shall be elected by the supreme legislative or governing body. The election shall be held within one year of the date of the issuance of the permanent certificate. (Amended by Stats. 1995, Ch. 166, Sec. 2. Effective January 1, 1996.)
  189. 11011.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    To organize, the required incorporation papers and related documents must be filed with the commissioner, in English, and the bond must be approved by the commissioner.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11011. The articles of incorporation, duly certified copies of the constitution, laws and rules, copies of all proposed forms of certificates, applications therefor, and circulars to be issued by the society, and a bond, conditioned upon the return to applicants of the advanced payments if the organization is not completed within one year, such bond to be in the amount of ten thousand dollars ($10,000) and approved by the commissioner, shall be filed with the commissioner, who may require such further information as the commissioner deems necessary. All documents filed are to be in the English language. If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the commissioner shall so certify, retain and file the articles of incorporation and furnish the incorporators a preliminary certificate authorizing the society to solicit members as hereinafter provided. Copies of the articles of incorporation shall also be filed with the Secretary of State. (Amended by Stats. 1982, Ch. 517, Sec. 292.)
  190. 11012.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A preliminary certificate expires after one year unless the society secures 500 applicants, completes organization, and receives a certificate of authority; the commissioner may extend the period by up to one year for cause shown.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11012. No such preliminary certificate shall be valid after one year from its date, or after such further period, not exceeding one year, as may be authorized by the commissioner, upon cause shown, unless the 500 applicants hereinafter required have been secured and the organization has been completed as provided in this article. The articles of incorporation and all other proceedings thereunder shall become null and void in one year from the date of the preliminary certificate, or at the expiration of the extended period, unless the society shall have completed its organization and received a certificate of authority to do business as hereinafter provided. (Repealed and added by Stats. 1951, Ch. 1193.)
  191. 11013.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A fraternal benefit society may solicit members after receiving a preliminary certificate, but it must collect required advance payments and cannot issue certificates or promise benefits until all listed organizational conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11013. Upon receipt of a preliminary certificate from the commissioner, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one semiannual payment or six monthly payments, in accordance with its table of rates as provided by its constitution and laws, and shall issue to each such applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of such advance payment, nor issue any certificate, nor pay, allow, or offer or promise to pay or allow any death or disability benefit to any person until: (a) Actual bona fide applications for death benefits have been secured aggregating at least five hundred thousand dollars ($500,000) on not less than 500 lives. (b) All such applicants for death benefits shall have been regularly examined by qualified practicing physicians or shall have made acceptable declarations of insurability. (c) Certificates of examinations or acceptable declarations of insurability meeting the established underwriting standards of the society have been duly filed and approved by the society. (d) Ten subordinate lodges or branches have been established into which the 500 applicants have been admitted. (e) There has been submitted to the commissioner, under oath of the president or secretary, or corresponding officer of the society, a list of such applicants, giving their names, addresses, date each was admitted, name and number of the subordinate branch of which each applicant is a member, amount of benefits to be granted and rates therefor. (f) It shall have been shown to the commissioner, by sworn statement of the treasurer, or corresponding officer of such society, that at least 500 applicants have each paid in cash at least one semiannual payment or six monthly payments as herein provided, which payments in the aggregate shall amount to at least five thousand dollars ($5,000), all of which shall be credited to the fund or funds from which benefits are to be paid, and no part of which may be used for expenses. Said advance payments shall be held in trust during the period of organization and if the organization has not qualified for a certificate of authority within one year or within the extended period, as provided in Section 11012, such payments shall be returned to said applicants. (Repealed and added by Stats. 1951, Ch. 1193.)
  192. 11014.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    The commissioner may examine a society and ask for more information. If satisfactory evidence shows the society has complied with the law, the commissioner must issue a certificate and make a record of it.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11014. The commissioner may make such examination and require such further information as he deems advisable. Upon presentation of satisfactory evidence that the society has complied with all the provisions of law, he shall issue to the society a certificate to that effect and that the society is authorized to transact business pursuant to the provisions of this chapter. The certificate shall be prima facie evidence of the existence of the society at the date of such certificate. The commissioner shall cause a record of such certificate to be made. A certified copy of such record may be given in evidence with like effect as the original certificate. (Repealed and added by Stats. 1951, Ch. 1193.)
  193. 11015.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A fraternal benefit society may make and amend its constitution and by-laws and use other powers needed to carry out its purposes.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11015. Every such society shall have the power to make a constitution and by-laws for the government of the society, the admission of its members, the management of its affairs, and the fixing and readjusting of the rates of its members from time to time. It shall have the power to change, alter, add to or amend such constitution and by-laws and shall have such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society. (Repealed and added by Stats. 1951, Ch. 1193.)
  194. 11016.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A society must operate for the benefit of its members and beneficiaries, using the listed kinds of purposes and benefits. Some incorporated societies may continue exercising their existing rights, powers, and privileges, and a domestic society is not required to reincorporate.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11016. A society shall operate for the benefit of its members and their beneficiaries by: (a) Providing benefits under Section 11041, and (b) Operating for one or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic, or religious purposes for the benefit of its members, and, if desired, for others. The society’s purposes may be carried out directly by the society or indirectly through subsidiary or affiliated entities established in furtherance of the purposes of the society. Any incorporated society authorized to transact business in this state on January 1, 1996, may thereafter exercise all the rights, powers, and privileges prescribed in this chapter and in its charter or articles of incorporation as far as consistent with this chapter. A domestic society shall not be required to reincorporate. (Repealed and added by Stats. 1995, Ch. 166, Sec. 4. Effective January 1, 1996.)
  195. 11017.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    After September 21, 1952, unincorporated or voluntary associations cannot operate in this state as fraternal benefit societies under this chapter. A domestic voluntary association already authorized to do business may incorporate if it completes conversion, files incorporation papers, and meets the article’s requirements.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11017. After September 21, 1952, no unincorporated or voluntary association shall be permitted to transact business in this State as a fraternal benefit society under this chapter. Any domestic voluntary association now authorized to transact business in this State may incorporate when: (a) It shall have completed its conversion to an incorporated society, not later than one year after the effective date of this chapter; (b) It has filed its articles of incorporation and has satisfied the other requirements prescribed in this article; and (c) The commissioner shall have made such examination and procured whatever additional information he shall deem advisable. Every voluntary association so incorporated shall incur the obligations and enjoy the benefits thereof the same as though originally incorporated, and such corporation shall be deemed a continuation of the original voluntary association. The officers thereof shall serve through their respective terms as provided in its original articles of association, but their successors shall be elected and serve as provided in its articles of incorporation. Incorporation of a voluntary association shall not affect existing suits, claims or contracts. (Repealed and added by Stats. 1951, Ch. 1193.)
  196. 11018.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A domestic society may hold its legislative or governing body meetings outside the state if it has at least five subordinate branches there, but its principal office must be in this State.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11018. Any domestic society may provide that the meetings of its legislative or governing body may be held in any state, district, province or territory wherein such society has at least five subordinate branches, and all business transacted at such meetings shall be as valid in all respects as if such meetings were held in this State. However, its principal office shall be located in this State. (Repealed and added by Stats. 1951, Ch. 1193.)
  197. 11019.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    A domestic society may not consolidate or merge with another society unless it files the required papers with the commissioner and pays a $386 filing fee in advance.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11019. A domestic society shall not consolidate or merge with any other society unless it files with the commissioner the papers and evidence specified in this section and pays the sum of three hundred eighty-six dollars ($386) to the commissioner in advance as a filing fee therefor. The papers and evidence herein required to be filed with the commissioner in that instance are: (a) A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger; (b) A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date not earlier than December 31, next preceding the date of the contract; (c) A certificate of those officers, duly verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds vote of the supreme legislative or governing body of each society; and (d) Evidence that at least 60 days prior to the action of the supreme legislative or governing body of each society, the text of the contract has been furnished to all members of the society by being sent by mail or by being published in full in the official organ of the society and the issue containing the text of the contract being mailed to each member of the society. (Amended by Stats. 2017, Ch. 534, Sec. 65. (AB 1699) Effective January 1, 2018.)
  198. 1102.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. )

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    An insurer may not guarantee the financial obligation of its officers, directors, trustees, or other people managing the insurer’s funds; any such guarantee is void.

    ## Insurance Code - INS ## DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 - 1879.8] ( Division 1 enacted by Stats. 1935, Ch. 145. ) ## PART 2. THE BUSINESS OF INSURANCE [680 - 1879.8] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 1. General Regulations [680 - 1113] ( Chapter 1 enacted by Stats. 1935, Ch. 145. ) ## ARTICLE 17. Loans and Investments [1100 - 1107.1] ( Article 17 enacted by Stats. 1935, Ch. 145. ) ## 1102. The financial obligation of any officer, director, trustee, or other person having authority in the management of an insurer’s funds shall not be guaranteed by such insurer in any capacity, and any such guarantee shall be void. (Amended by Stats. 1937, Ch. 736.)
  199. 11020.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    The commissioner must approve a merger or consolidation contract and issue a certificate if the listed conditions are met.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11020. If the commissioner finds that such contract is in conformity with the provisions of this chapter, that the financial statements are correct, that under it the interests of the certificate holders of the parties are properly protected and that the consolidation or merger is just and equitable to the members of each society, he shall approve the contract and issue his certificate to such effect. Upon such approval, the contract shall be in full force and effect unless any society which is a party to the contract is incorporated under the laws of any other state or territory. In such event the consolidation or merger shall not become effective unless and until it has been approved as provided by the laws of such state or territory and a certificate of such approval filed with the commissioner of this State or, if the laws of such state or territory contain no such provision, then the consolidation or merger shall not become effective unless and until the supervising insurance official of such state or territory has advised the commissioner that he has no objection to such consolidation or merger. (Repealed and added by Stats. 1951, Ch. 1193.)
  200. 11021.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. )

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    When a consolidation or merger becomes effective, the resulting or surviving society receives the merged societies’ rights, franchises, interests, and related property interests.

    ## Insurance Code - INS ## DIVISION 2. CLASSES OF INSURANCE [1880 - 12880.8] ( Division 2 enacted by Stats. 1935, Ch. 145. ) ## PART 2. LIFE AND DISABILITY INSURANCE [10110 - 11549] ( Part 2 enacted by Stats. 1935, Ch. 145. ) ## CHAPTER 10. Fraternal Benefit Societies [10970 - 11165] ( Chapter 10 repealed and added by Stats. 1951, Ch. 1193. ) ## ARTICLE 3. Organization [11010 - 11033] ( Article 3 added by Stats. 1951, Ch. 1193. ) ## 11021. Upon the consolidation or merger becoming effective, all the rights, franchises and interests of the consolidated or merged societies in and to every species of property, real, personal or mixed, and things in action thereunto belonging shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of real property may be evidenced by proper deeds, and the title to any real estate or interest therein, vested under the laws of this State in any of the societies consolidated or merged, shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after such consolidation or merger. (Repealed and added by Stats. 1951, Ch. 1193.)

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