California Insurance Code 10954 – (a) A carrier may use the following characteristics of an …
(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:
Terms Used In California Insurance Code 10954
- Child: means any individual under 19 years of age. See California Insurance Code 10950
- 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:
California Insurance Code 10950
- 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. See California Insurance Code 10950
- 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. See California Insurance Code 10950
- 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. See California Insurance Code 10950
- 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. See California Insurance Code 10950
(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.)