SECTIONS 10950-10960 - California Statutes

INSURANCE CODE

SECTION 10950-10960

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.

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.

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.

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.

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 renew 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 may require documentation from applicants relating to
their coverage history.

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.

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.

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, 12682.1, and 10273.4, 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.

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.