California Senate Bill SB615 Amended / Bill

 BILL NUMBER: SB 615AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 18, 2012 AMENDED IN SENATE MAY 10, 2011 AMENDED IN SENATE APRIL 13, 2011 INTRODUCED BY Senator Calderon FEBRUARY 18, 2011 An act to amend  Section 1359 of, and to add Section 1361.5 to, the Health and Safety Code, and to amend Section 1631.5 of, and to add Section 1749.87 to, the Insurance Code, relating to health care coverage   Sections 742.20 and 742.40 of the Insurance Code, relating to insurance  . LEGISLATIVE COUNSEL'S DIGEST SB 615, as amended, Calderon.  Health care service plans: accident and health agents: licensure.   Multiple employer welfare arrangements: benefits.   Existing law prohibits a self-funded or partially self-funded multiple employer welfare arrangement (MEWA) from providing any benefits for any resident of this state without obtaining a certificate of compliance from the Insurance Commissioner. Existing law imposes various eligibility requirements on a self-funded or partially self-funded MEWA in order to obtain a certificate of compliance, including, among other things, that it be a nonprofit corporation, that it be established and maintained by a specified association with at least 200 paid members, and that benefits be only offered to association members.   Under existing law, a self-funded or partially self-funded MEWA is limited to providing certain benefits that include, among other things, medical, dental, and surgical benefits. Under existing law, a MEWA is required to offer health care coverage benefits to any newly eligible person and his or her dependents under terms and conditions no less favorable than those offered to the MEWA employers' existing employees and their dependents under specified circumstances.   This bill would, commencing January 1, 2014, prohibit a MEWA from offering, issuing, selling, or renewing health care coverage benefits unless the MEWA discloses whether the benefits constitute minimum essential coverage, as defined under existing federal law.   Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. A willful violation of the act is a crime. The chief officer of the department is the Director of the Department of Managed Health Care. Existing law authorizes the director to require that solicitors and solicitor firms, and principal persons engaged in the supervision of solicitation for plans of solicitor firms, meet specified standards.   This bill would change the director's authority as described above to make it mandatory. On and after January 1, 2013, the bill would also require solicitors and solicitor firms, and principal persons engaged in the supervision of solicitation for health care service plan contracts, specialized health care service plan contracts, Medicare Advantage Plans under Medicare Part C, or Medicare supplement contracts, to complete solicitor training that includes, among other things, information relating to the act, the federal Patient Protection and Affordable Care Act, and the California Health Benefit Exchange. The bill would require the department to consult with the Insurance Commissioner with respect to developing the curriculum for the solicitor training.   Because a willful violation of the act constitutes a crime, the bill would impose a state-mandated local program.   Existing law requires accident and health agent licensees to be licensed by the Insurance Commissioner, subject to prelicensure standards and continuing education requirements developed by the curriculum board that consists of insurance industry representatives and consumer groups. Existing law authorizes the Insurance Commissioner to enforce those provisions.   This bill would require the curriculum board to make recommendations to the commissioner to, among other things, instruct accident and health licensees about the requirements of the federal Patient Protection and Affordable Care Act and to include instruction relating to the California Health Benefit Exchange. The bill would require each course provider to submit its course content to the commissioner for approval.   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   no  . State-mandated local program:  yes   no  . THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 742.20 of the   Insurance Code   is amended to read:  742.20. The Legislature finds and declares the following: (a) An alternative to insurance programs, health care maintenance organizations, and panel provider organizations was established by Congress in 1974 through the Employee Retirement Income Security Act (ERISA). Among the various employee benefit programs established and governed by ERISA are multiple employer welfare arrangements (MEWA), which are subject as well to state regulatory and fiscal standards not inconsistent with ERISA. MEWAs permit employer members of trade associations to create trust funds for the purpose of offering and providing health care benefits to their employees. MEWAs can be created as fully insured or self-funded or partially self-funded benefit programs. (b) The Legislature recognizes that some MEWAs provide an alternative mechanism to traditional health insurance for small employers. It is the intent of the Legislature to ensure the financial integrity of those MEWA programs that are already in existence by requiring self-funded or partially self-funded MEWAs to obtain a certificate of compliance from the Department of Insurance. In order for the Department of Insurance to grant a certificate of compliance, the MEWA must adhere to standards set forth in this act which are not inconsistent with the provisions of ERISA. Further, it is the intent of the Legislature to provide the Department of Insurance with the authority to levy monetary penalties and to revoke certificates of compliance from MEWAs that violate the provisions of this act.  (c) The federal Patient Protection and Affordable Care Act enacted various health care coverage market reforms that become operative on January 1, 2014. It is the intent of the Legislature to encourage MEWAs regulated by this article to provide certain essential health benefits to the extent not inconsistent with ERISA.   (c)   (d)  The Legislature has passed significant reforms in the area of small group health insurance. This article, in no manner, circumvents these reforms nor is it intended to be a precedent to do so. Therefore, the small group reform legislation applies to MEWAs to the extent it is not inconsistent with ERISA.  (d)   (e)  The provisions of this article are consistent with and authorized by ERISA, which confers upon the states limited authority to regulate MEWAs.  SEC. 2.   Section 742.40 of the   Insurance Code   is amended to read:  742.40. (a) A multiple employer welfare arrangement shall offer health care coverage benefits to any new eligible person and his or her dependents under terms and conditions no less favorable to those offered to their employers' existing employees and their dependents, if the newly eligible person had health care benefit coverage with either the same or a different multiple employer welfare arrangement within 31 days. The new coverage shall comply with existing eligibility rules of the multiple employer welfare arrangement. (b) A multiple employer welfare arrangement shall comply with the requirements set forth in Sections 10198.7 and 10198.9.  (c) Notwithstanding any other provision of law, commencing January 1, 2014, a multiple employer welfare arrangement shall not offer, issue, sell, or renew health care coverage benefits unless the multiple employer welfare arrangement discloses in all marketing material and solicitations whether the benefits constitute minimum essential coverage as defined in Section 5000A(f) of Title 26 of the Internal Revenue Code and any rules or regulations adopted thereunder.   SECTION 1.   Section 1359 of the Health and Safety Code is amended to read: 1359. (a) The director shall require that solicitors and solicitor firms, and principal persons engaged in the supervision of solicitation for plans of solicitor firms, meet reasonable and appropriate standards with respect to training, experience, and other qualifications consistent with Section 1361.5 and any additional standards as the director finds necessary and appropriate in the public interest or for the protection of subscribers, enrollees, and plans. For such purposes, the director may do the following: (1) Appropriately classify such persons and individuals. (2) Specify that all or any portion of such standards shall be applicable to any such class. (3) Require individuals in any such class to pass examinations prescribed in accordance with such rules. (b) The director may prescribe by rule reasonable fees and charges to defray the costs of carrying out this section, including, but not limited to, fees for any examination administered by the director or under his or her direction.   SEC. 2.   Section 1361.5 is added to the Health and Safety Code, to read: 1361.5. (a) On and after January 1, 2013, solicitors and solicitor firms, and principal persons engaged in the supervision of solicitation for health care service plan contracts, specialized health care service plan contracts, Medicare Advantage Plans under Medicare Part C, or Medicare supplement contracts, shall complete training as a solicitor consistent with this section. (b) The training for a solicitor shall include the following: (1) Knowledge of the Knox-Keene Health Care Service Plan Act of 1975 (commencing with Section 1340) and regulations implemented under that act. (2) Knowledge of the federal Patient Protection and Affordable Care Act (Public Law 111-148) and other relevant federal laws, federal regulations, and guidance implemented under those laws. (3) Knowledge of all public coverage programs and the California Health Benefit Exchange. (4) Ethics training. (c) In developing the curriculum for solicitor training, the department shall consult with the Insurance Commissioner. The training developed by the department shall be at least as extensive as the training for an accident and health agent, as required by the Insurance Commissioner. (d) The department shall determine whether the ethics training provided to those licensed as an accident and health agent by the Insurance Commissioner is sufficient and appropriate for a solicitor. If the department so determines, then an individual licensed and in good standing as an accident and health agent shall not be required to complete the ethics training described in this section; however, all other requirements pursuant to this section shall apply. (e) Nothing in this section shall be deemed to affect the current operations of the Healthy Families Program (Part 6.2 (commencing with Section 12693) of Division 2 of the Insurance Code), the Access for Infants and Mothers Program (Part 6.3 (commencing with Section 12695) of Division 2 of the Insurance Code), or the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code). Nothing in this section shall be deemed to affect the operations of the California Health Benefit Exchange established in Title 22 (commencing with Section 100500) of the Government Code. (f) Nothing in this section shall apply to the requirements or qualifications for navigators pursuant to subdivision (l) of Section 100502 of the Government Code.   SEC. 3.   Section 1631.5 of the Insurance Code is amended to read: 1631.5. (a) Nothing in this article shall be deemed to affect the current operations of the Healthy Families Program (Part 6.2 (commencing with Section 12693) of Division 2) or the Access for Infants and Mothers Program (Part 6.3 (commencing with Section 12695) of Division 2), or the Medi-Cal program (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code). Nothing in this article shall be deemed to affect the operations of the California Health Benefit Exchange established in Title 22 (commencing with Section 100500) of the Government Code. (b) Nothing in this article shall apply to the requirements or qualifications for navigators pursuant to subdivision (l) of Section 100502 of the Government Code.   SEC. 4.   Section 1749.87 is added to the Insurance Code, to read: 1749.87. (a) The curriculum board shall, in 2012, make recommendations to the commissioner to instruct accident and health agents about the requirements imposed by the federal Patient Protection and Affordable Care Act (Public Law 111-148). This instruction shall include instruction on all public coverage programs and the California Health Benefit Exchange established in Title 22 (commencing with Section 100500) of the Government Code. (b) The curriculum board shall make recommendations to revise both prelicensing education and continuing education. (c) Each provider of courses based upon this curriculum shall submit its course content to the commissioner for approval.   SEC. 5.   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.