SB 838

Bill Subjects

Abstract

Existing federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) , requires group health plans providing coverage to employers of 20 or more employees to provide former employees with continuation of benefits, as specified. The federal American Recovery and Reinvestment Act of 2009 (ARRA) provides up to 9 months of premium assistance under COBRA and comparable state continuation coverage programs for certain eligible individuals whose employment was involuntarily terminated between September 1, 2008, and December 31, 2009, as specified. Subsequent federal legislation extends that premium assistance for a specified period of time, makes the assistance available to certain eligible individuals whose employment is involuntarily terminated on or after January 1, 2010, and provides a special election opportunity for certain eligible individuals who experience a reduction in hours followed by an involuntary termination of employment, as specified. Existing federal law requires a plan administrator or other entity involved to provide notices regarding that assistance to certain qualified beneficiaries within specified periods of time. 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 and makes a willful violation of the act a crime. Existing law also provides for regulation of health insurers by the Department of Insurance. The California Continuation Benefits Replacement Act (Cal-COBRA) requires health care service plans and health insurers providing group coverage to employers of 2 to 19 employees to offer continuation of that coverage for a specified period of time to certain qualified beneficiaries, as specified. Existing law requires Cal-COBRA plans and insurers to provide notice of the availability of premium assistance under ARRA to qualified beneficiaries who experience a qualifying event between September 1, 2008, and December 31, 2009, as specified. This bill would require those plans and insurers to also provide notice of the availability of premium assistance to qualified beneficiaries who experience a qualifying event between January 1, 2010, and specified dates under federal law and would additionally require plans and insurers to notify qualified beneficiaries eligible for premium assistance of the extension of premium assistance made available by federal law consistent with the notice requirements imposed under that law. The bill would require plans and insurers to give certain qualified beneficiaries whose employment is terminated on or after March 1, 2010, written notice regarding the availability of premium assistance and the special election opportunity provided under ARRA and would allow beneficiaries eligible for that or any other special election opportunity under ARRA to elect continuation coverage within 60 days of the notice required under federal law. The bill would also require plans and insurers to provide information regarding the federal premium assistance and any special election periods under ARRA on their Internet Web sites, as specified, and would apply certain notice requirements to employers of employees whose employment has been terminated on or after March 2, 2010. The bill would authorize the Department of Managed Health Care to designate model notices for purposes of implementing federal premium assistance, as specified, and would make other conforming changes. Because a willful violation of these requirements by a health care service plan would be a crime, the 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. This bill would declare that it is to take effect immediately as an urgency statute.