BILL NUMBER: SB 1088 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 1, 2010
AMENDED IN SENATE APRIL 13, 2010
INTRODUCED BY Senator Price
FEBRUARY 17, 2010
An act to amend Section 1373 of the Health and Safety Code, and to
amend Section 10277 of the Insurance Code, relating to health care.
LEGISLATIVE COUNSEL'S DIGEST
SB 1088, as amended, Price. Health care coverage.
coverage: dependents.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care, and
makes a willful violation of the act a crime. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Existing law requires that every health care service plan
contract or group health insurance policy that provides for
termination of coverage of a dependent child upon attainment of the
limiting age for dependent children shall also provide that
attainment of the limiting age shall not terminate the coverage of a
child under certain conditions.
This bill would state the intent of the Legislature to enact
legislation to conform state law regarding dependent coverage under
health care service plan contracts and health insurance policies to
recently enacted federal legislation, including defining a dependent
to be a child up to 26 years of age, regardless of marital status,
whether he or she has children, state of residency, employment
status, or income level.
This bill would also prohibit , with a
specified exception, the limiting age for dependent
children covered by these health care service plan
contracts and individual and group health insurance
policies from being less than 26 years of age. The bill
would provide that no employer is required to pay the cost of
coverage for dependents who are at least 23 years of age, but less
than 26 years of age. The bill instead would authorize subscribers
and insureds to elect to provide coverage to those dependents by
contributing the premium for that coverage.
Because this bill would specify additional requirements under the
Knox-Keene Act, the willful violation of which would be a crime, this
bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature
to enact legislation conforming the requirements for health care
service plan contracts and health insurance policies in this state
pertaining to coverage of dependent children to the requirements of
the federal Patient Protection and Affordable Care Act (Public Law
111-148), including:
(a) Requiring all group health care service plan contracts and
group health insurance policies to offer dependent care coverage.
(b) Defining a dependent to be a child up to 26 years of age,
regardless of marital status, employment status, income level, state
of residency, or whether he or she has children.
(c) Allowing parents to elect to cover dependents under their plan
or policy even after that dependent has ceased to be covered under
that plan or policy. These dependents would not be deemed late
enrollees or subject to medical underwriting.
(d) Requiring plans and policies to cover a dependent regardless
of any pre-existing medical conditions of the dependent, until
January 1, 2014.
(e) Authorizing, but not requiring, employers to contribute a
portion of the premium for an employee's covered dependents.
(f) Requiring a plan or policy that provides the vision, dental,
or vision and dental coverage, to extend that same coverage to the
covered dependents.
SEC. 2. SECTION 1. Section 1373 of
the Health and Safety Code is amended to read:
1373. (a) A plan contract may not provide an exception for other
coverage if the other coverage is entitlement to Medi-Cal benefits
under Chapter 7 (commencing with Section 14000) or Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code, or Medicaid benefits under Subchapter
19 (commencing with Section 1396) of Chapter 7 of Title 42 of the
United States Code.
Each plan contract shall be interpreted not to provide an
exception for the Medi-Cal or Medicaid benefits.
A plan contract shall not provide an exemption for enrollment
because of an applicant's entitlement to Medi-Cal benefits under
Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing
with Section 14200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or Medicaid benefits under Subchapter 19
(commencing with Section 1396) of Chapter 7 of Title 42 of the United
States Code.
A plan contract may not provide that the benefits payable
thereunder are subject to reduction if the individual insured has
entitlement to the Medi-Cal or Medicaid benefits.
(b) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for sterilization
operations or procedures shall not impose any disclaimer, restriction
on, or limitation of, coverage relative to the covered individual's
reason for sterilization.
As used in this section, "sterilization operations or procedures"
shall have the same meaning as that specified in Section 10120 of the
Insurance Code.
(c) Every plan contract that provides coverage to the spouse or
dependents of the subscriber or spouse shall grant immediate accident
and sickness coverage, from and after the moment of birth, to each
newborn infant of any subscriber or spouse covered and to each minor
child placed for adoption from and after the date on which the
adoptive child's birth parent or other appropriate legal authority
signs a written document, including, but not limited to, a health
facility minor release report, a medical authorization form, or a
relinquishment form, granting the subscriber or spouse the right to
control health care for the adoptive child or, absent this written
document, on the date there exists evidence of the subscriber's or
spouse's right to control the health care of the child placed for
adoption. No plan may be entered into or amended if it contains any
disclaimer, waiver, or other limitation of coverage relative to the
coverage or insurability of newborn infants of, or children placed
for adoption with, a subscriber or spouse covered as required by this
subdivision.
(d) (1) Every plan contract that provides that coverage of a
dependent child of a subscriber shall terminate upon attainment of
the limiting age for dependent children specified in the plan, shall
also provide that attainment of the limiting age shall not operate to
terminate the coverage of the child while the child is and continues
to meet both of the following criteria:
(A) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
(B) Chiefly dependent upon the subscriber for support and
maintenance.
(2) The plan shall notify the subscriber that the dependent child'
s coverage will terminate upon attainment of the limiting age unless
the subscriber submits proof of the criteria described in
subparagraphs (A) and (B) of paragraph (1) to the plan within 60 days
of the date of receipt of the notification. The plan shall send this
notification to the subscriber at least 90 days prior to the date
the child attains the limiting age. Upon receipt of a request by the
subscriber for continued coverage of the child and proof of the
criteria described in subparagraphs (A) and (B) of paragraph (1), the
plan shall determine whether the child meets that criteria before
the child attains the limiting age. If the plan fails to make the
determination by that date, it shall continue coverage of the child
pending its determination.
(3) The plan may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under this subdivision but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
(4) If the subscriber changes carriers to another plan or to a
health insurer, the new plan or insurer shall continue to provide
coverage for the dependent child. The new plan or insurer may request
information about the dependent child initially and not more
frequently than annually thereafter to determine if the child
continues to satisfy the criteria in subparagraphs (A) and (B) of
paragraph (1). The subscriber shall submit the information requested
by the new plan or insurer within 60 days of receiving the request.
(5) Except as specified in this paragraph, under
Under no circumstances shall the limiting age be
less than 26 years of age. Nothing in this section shall
require employers to pay the cost of coverage for dependents who are
at least 23 years of age, but less than 26 years of age. Subscribers
may elect to provide coverage to those dependents who are at least 23
years of age, but are less than 26 years of age, provided they
contribute the premium for that coverage. The provision requiring the
limiting age to be a minimum of 26 years of age shall not be
effective for employment contracts subject to collective bargaining
that are effective prior to January 1, 2011. Any employment contract
subject to collective bargaining that is issued, amended, or renewed
on or after January 1, 2011, shall be subject to this paragraph.
this section shall require a health care service plan
to make coverage available for a child of a child receiving dependent
coverage. Nothing in this section shall be construed to modify the
definition of "dependent" as used in the Revenue and Taxation Code
with respect to the tax treatment of the cost of coverage.
(e) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for both an employee and
one or more covered persons dependent upon the employee and provides
for an extension of the coverage for any period following a
termination of employment of the employee shall also provide that
this extension of coverage shall apply to dependents upon the same
terms and conditions precedent as applied to the covered employee,
for the same period of time, subject to payment of premiums, if any,
as required by the terms of the policy and subject to any applicable
collective bargaining agreement.
(f) A group contract shall not discriminate against handicapped
persons or against groups containing handicapped persons. Nothing in
this subdivision shall preclude reasonable provisions in a plan
contract against liability for services or reimbursement of the
handicap condition or conditions relating thereto, as may be allowed
by rules of the director.
(g) Every group contract shall set forth the terms and conditions
under which subscribers and enrollees may remain in the plan in the
event the group ceases to exist, the group contract is terminated, or
an individual subscriber leaves the group, or the enrollees'
eligibility status changes.
(h) (1) A health care service plan or specialized health care
service plan may provide for coverage of, or for payment for,
professional mental health services, or vision care services, or for
the exclusion of these services. If the terms and conditions include
coverage for services provided in a general acute care hospital or an
acute psychiatric hospital as defined in Section 1250 and do not
restrict or modify the choice of providers, the coverage shall extend
to care provided by a psychiatric health facility as defined in
Section 1250.2 operating pursuant to licensure by the State
Department of Mental Health. A health care service plan that offers
outpatient mental health services but does not cover these services
in all of its group contracts shall communicate to prospective group
contractholders as to the availability of outpatient coverage for the
treatment of mental or nervous disorders.
(2) No plan shall prohibit the member from selecting any
psychologist who is licensed pursuant to the Psychology Licensing Law
(Chapter 6.6 (commencing with Section 2900) of Division 2 of the
Business and Professions Code), any optometrist who is the holder of
a certificate issued pursuant to Chapter 7 (commencing with Section
3000) of Division 2 of the Business and Professions Code or, upon
referral by a physician and surgeon licensed pursuant to the Medical
Practice Act (Chapter 5 (commencing with Section 2000) of Division 2
of the Business and Professions Code), (A) any marriage and family
therapist who is the holder of a license under Section 4980.50 of the
Business and Professions Code, (B) any licensed clinical social
worker who is the holder of a license under Section 4996 of the
Business and Professions Code, (C) any registered nurse licensed
pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of
the Business and Professions Code, who possesses a master's degree
in psychiatric-mental health nursing and is listed as a
psychiatric-mental health nurse by the Board of Registered Nursing,
or (D) any advanced practice registered nurse certified as a clinical
nurse specialist pursuant to Article 9 (commencing with Section
2838) of Chapter 6 of Division 2 of the Business and Professions Code
who participates in expert clinical practice in the specialty of
psychiatric-mental health nursing, to perform the particular services
covered under the terms of the plan, and the certificate holder is
expressly authorized by law to perform these services.
(3) Nothing in this section shall be construed to allow any
certificate holder or licensee enumerated in this section to perform
professional mental health services beyond his or her field or fields
of competence as established by his or her education, training, and
experience.
(4) For the purposes of this section, "marriage and family
therapist" means a licensed marriage and family therapist who has
received specific instruction in assessment, diagnosis, prognosis,
and counseling, and psychotherapeutic treatment of premarital,
marriage, family, and child relationship dysfunctions that is
equivalent to the instruction required for licensure on January 1,
1981.
(5) Nothing in this section shall be construed to allow a member
to select and obtain mental health or psychological or vision care
services from a certificate holder or licenseholder who is not
directly affiliated with or under contract to the health care service
plan or specialized health care service plan to which the member
belongs. All health care service plans and individual practice
associations that offer mental health benefits shall make reasonable
efforts to make available to their members the services of licensed
psychologists. However, a failure of a plan or association to comply
with the requirements of the preceding sentence shall not constitute
a misdemeanor.
(6) As used in this subdivision, "individual practice association"
means an entity as defined in subsection (5) of Section 1307 of the
federal Public Health Service Act (42 U.S.C. Sec. 300e-1(5)).
(7) Health care service plan coverage for professional mental
health services may include community residential treatment services
that are alternatives to inpatient care and that are directly
affiliated with the plan or to which enrollees are referred by
providers affiliated with the plan.
(i) If the plan utilizes arbitration to settle disputes, the plan
contracts shall set forth the type of disputes subject to
arbitration, the process to be utilized, and how it is to be
initiated.
(j) A plan contract that provides benefits that accrue after a
certain time of confinement in a health care facility shall specify
what constitutes a day of confinement or the number of consecutive
hours of confinement that are requisite to the commencement of
benefits.
(k) If a plan provides coverage for a dependent child who is over
18 26 years of age and enrolled as a
full-time student at a secondary or postsecondary educational
institution, the following shall apply:
(1) Any break in the school calendar shall not disqualify the
dependent child from coverage.
(2) If the dependent child takes a medical leave of absence, and
the nature of the dependent child's injury, illness, or condition
would render the dependent child incapable of self-sustaining
employment, the provisions of subdivision (d) shall apply if the
dependent child is chiefly dependent on the subscriber for support
and maintenance.
(3) (A) If the dependent child takes a medical leave of absence
from school, but the nature of the dependent child's injury, illness,
or condition does not meet the requirements of paragraph (2), the
dependent child's coverage shall not terminate for a period not to
exceed 12 months or until the date on which the coverage is scheduled
to terminate pursuant to the terms and conditions of the plan,
whichever comes first. The period of coverage under this paragraph
shall commence on the first day of the medical leave of absence from
the school or on the date the physician determines the illness
prevented the dependent child from attending school, whichever comes
first. Any break in the school calendar shall not disqualify the
dependent child from coverage under this paragraph.
(B) Documentation or certification of the medical necessity for a
leave of absence from school shall be submitted to the plan at least
30 days prior to the medical leave of absence from the school, if the
medical reason for the absence and the absence are foreseeable, or
30 days after the start date of the medical leave of absence from
school and shall be considered prima facie evidence of entitlement to
coverage under this paragraph.
(4) This subdivision shall not apply to a specialized health care
service plan or to a Medicare supplement plan.
SEC. 3. SEC. 2. Section 10277 of the
Insurance Code is amended to read:
10277. (a) A group health insurance policy that provides that
coverage of a dependent child of an employee or other member of the
covered group shall terminate upon attainment of the limiting age for
dependent children specified in the policy, shall also provide that
attainment of the limiting age shall not operate to terminate the
coverage of the child while the child is and continues to meet both
of the following criteria:
(1) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
(2) Chiefly dependent upon the employee or member for support and
maintenance.
(b) The insurer shall notify the employee or member that the
dependent child's coverage will terminate upon attainment of the
limiting age unless the employee or member submits proof of the
criteria described in paragraphs (1) and (2) of subdivision (a) to
the insurer within 60 days of the date of receipt of the
notification. The insurer shall send this notification to the
employee or member at least 90 days prior to the date the child
attains the limiting age. Upon receipt of a request by the employee
or member for continued coverage of the child and proof of the
criteria described in paragraphs (1) and (2) of subdivision (a), the
insurer shall determine whether the dependent child meets that
criteria before the child attains the limiting age. If the insurer
fails to make the determination by that date, it shall continue
coverage of the child pending its determination.
(c) The insurer may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under subdivision (a), but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
(d) If the employee or member changes carriers to another insurer
or to a health care service plan, the new insurer or plan shall
continue to provide coverage for the dependent child. The new plan or
insurer may request information about the dependent child initially
and not more frequently than annually thereafter to determine if the
child continues to satisfy the criteria in paragraphs (1) and (2) of
subdivision (a). The employee or member shall submit the information
requested by the new plan or insurer within 60 days of receiving the
request.
(e) If a group health insurance policy provides coverage for a
dependent child who is over 18 26 years
of age and enrolled as a full-time student at a secondary or
postsecondary educational institution, the following shall apply:
(1) Any break in the school calendar shall not disqualify the
dependent child from coverage.
(2) If the dependent child takes a medical leave of absence, and
the nature of the dependent child's injury, illness, or condition
would render the dependent child incapable of self-sustaining
employment, the provisions of subdivision (a) shall apply if the
dependent child is chiefly dependent on the policyholder for support
and maintenance.
(3) (A) If the dependent child takes a medical leave of absence
from school, but the nature of the dependent child's injury, illness,
or condition does not meet the requirements of paragraph (2), the
dependent child's coverage shall not terminate for a period not to
exceed 12 months or until the date on which the coverage is scheduled
to terminate pursuant to the terms and conditions of the policy,
whichever comes first. The period of coverage under this paragraph
shall commence on the first day of the medical leave of absence from
the school or on the date the physician determines the illness
prevented the dependent child from attending school, whichever comes
first. Any break in the school calendar shall not disqualify the
dependent child from coverage under this paragraph.
(B) Documentation or certification of the medical necessity for a
leave of absence from school shall be submitted to the insurer at
least 30 days prior to the medical leave of absence from the school,
if the medical reason for the absence and the absence are
foreseeable, or 30 days after the start date of the medical leave of
absence from school and shall be considered prima facie evidence of
entitlement to coverage under this paragraph.
(4) This subdivision shall not apply to a policy of specialized
health insurance, Medicare supplement insurance, CHAMPUS-supplement
or TRICARE-supplement insurance policies, or to hospital-only,
accident-only, or specified disease insurance policies that reimburse
for hospital, medical, or surgical benefits.
(f) Except as specified in this subdivision, under no
(f) Under no circumstances shall
the limiting age under subdivision (a) a
group or individual health insurance policy that provides coverage of
a dependent child be less than 26 years of age. Nothing in
this section shall require employers to pay the cost of
coverage for dependents who are at least 23 years of age, but are
less than 26 years of age. Employees or members may elect to provide
coverage to those dependents who are at least 23 years of age, but
less than 26 years of age, provided they contribute the premium for
that coverage. The provision requiring the limiting age to be a
minimum of 26 years of age shall not be effective for employment
contracts subject to collective bargaining that are effective prior
to January 1, 2011. Any employment contract subject to collective
bargaining that is issued, amended, or renewed on or after January 1,
2011, shall be subject to the provisions of this subdivision.
a health insurer to make coverage available for a
child of a child receiving dependent coverage. Nothing in this
section shall be construed to modify the definition of "dependent" as
used in the Revenue and Taxation Code with respect to the tax
treatment of the cost of coverage.
SEC. 4. SEC. 3. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.