2009 California Health and Safety Code - Section 1357.50-1357.54 :: Article 3.15. Preexisting Condition Provisions And Late Enrollees

1357.50.  For purposes of this article:
   (a) "Health benefit plan" means any individual or group insurance
policy or health care service plan contract that provides medical,
hospital, and surgical benefits. The term does not include accident
only, credit, disability income, coverage of Medicare services
pursuant to contracts with the United States government, Medicare
supplement, long-term care insurance, dental, vision, coverage issued
as a supplement to liability insurance, insurance arising out of a
workers' compensation or similar law, automobile medical payment
insurance, or insurance under which benefits are payable with or
without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent
self-insurance.
   (b) "Late enrollee" means an eligible employee or dependent who
has declined health coverage under a health benefit plan offered
through employment or sponsored by an employer at the time of the
initial enrollment period provided under the terms of the health
benefit plan, and who subsequently requests enrollment in a health
benefit plan of that employer, provided that the initial enrollment
period shall be a period of at least 30 days. However, an eligible
employee or dependent shall not be considered a late enrollee if any
of the following is applicable:
   (1) The individual meets all of the following requirements:
   (A) The individual was covered under another employer health
benefit plan, the Healthy Families Program, the Access for Infants
and Mothers (AIM) Program, or the Medi-Cal program at the time the
individual was eligible to enroll.
   (B) The individual certified, at the time of the initial
enrollment, that coverage under another employer health benefit plan,
the Healthy Families Program, the AIM Program, or the Medi-Cal
program was the reason for declining enrollment provided that, if the
individual was covered under another employer health benefit plan,
the individual was given the opportunity to make the certification
required by this subdivision and was notified that failure to do so
could result in later treatment as a late enrollee.
   (C) The individual has lost or will lose coverage under another
employer health benefit plan as a result of termination of employment
of the individual or of a person through whom the individual was
covered as a dependent, change in employment status of the individual
or of a person through whom the individual was covered as a
dependent, termination of the other plan's coverage, cessation of an
employer's contribution toward an employee or dependent's coverage,
death of a person through whom the individual was covered as a
dependent, legal separation, divorce, loss of coverage under the
Healthy Families Program, the AIM Program, or the Medi-Cal program.
   (D) The individual requests enrollment within 30 days after
termination of coverage, or cessation of employer contribution toward
coverage provided under another employer health benefit plan, or
requests enrollment within 60 days after termination of Medi-Cal
program coverage, AIM Program coverage, or Healthy Families Program
coverage.
   (2) The individual is employed by an employer that offers multiple
health benefit plans and the individual elects a different plan
during an open enrollment period.
   (3) A court has ordered that coverage be provided for a spouse or
minor child under a covered employee's health benefit plan. The
health benefit plan shall enroll a dependent child within 30 days
after receipt of a court order or request from the district attorney,
either parent or the person having custody of the child as defined
in Section 3751.5 of the Family Code, the employer, or the group
administrator. In the case of children who are eligible for medicaid,
the State Department of Health Care Services may also make the
request.
   (4) The plan cannot produce a written statement from the employer
stating that, prior to declining coverage, the individual or the
person through whom the individual was eligible to be covered as a
dependent was provided with, and signed acknowledgment of, explicit
written notice in boldface type specifying that failure to elect
coverage during the initial enrollment period permits the plan to
impose, at the time of the individual's later decision to elect
coverage, an exclusion from coverage for a period of 12 months as
well as a six-month preexisting condition exclusion, unless the
individual meets the criteria specified in paragraph (1), (2), or
(3).
   (5) The individual is an employee or dependent who meets the
criteria described in paragraph (1) and was under a COBRA
continuation provision, and the coverage under that provision has
been exhausted. For purposes of this section, the definition of
"COBRA" set forth in subdivision (e) of Section 1373.621 shall apply.
   (6) The individual is a dependent of an enrolled eligible employee
who has lost or will lose his or her coverage under the Healthy
Families Program, the AIM Program, or the Medi-Cal program and
requests enrollment within 60 days of termination of that coverage.
   (7) The individual is an eligible employee who previously declined
coverage under an employer health benefit plan and who has
subsequently acquired a dependent who would be eligible for coverage
as a dependent of the employee through marriage, birth, adoption, or
placement for adoption, and who enrolls for coverage under that
employer health benefit plan on his or her behalf, and on behalf of
his or her dependent within 30 days following the date of marriage,
birth, adoption, or placement for adoption, in which case the
effective date of coverage shall be the first day of the month
following the date the completed request for enrollment is received
in the case of marriage, or the date of birth, or the date of
adoption or placement for adoption, whichever applies. Notice of the
special enrollment rights contained in this paragraph shall be
provided by the employer to an employee at or before the time the
employee is offered an opportunity to enroll in plan coverage.
   (8) The individual is an eligible employee who has declined
coverage for himself or herself or his or her dependents during a
previous enrollment period because his or her dependents were covered
by another employer health benefit plan at the time of the previous
enrollment period. That individual may enroll himself or herself or
his or her dependents for plan coverage during a special open
enrollment opportunity if his or her dependents have lost or will
lose coverage under that other employer health benefit plan. The
special open enrollment opportunity shall be requested by the
employee not more than 30 days after the date that the other health
coverage is exhausted or terminated. Upon enrollment, coverage shall
be effective not later than the first day of the first calendar month
beginning after the date the request for enrollment is received.
Notice of the special enrollment rights contained in this paragraph
shall be provided by the employer to an employee at or before the
time the employee is offered an opportunity to enroll in plan
coverage.
   (c) "Preexisting condition provision" means a contract provision
that excludes coverage for charges or expenses incurred during a
specified period following the enrollee's effective date of coverage,
as to a condition for which medical advice, diagnosis, care, or
treatment was recommended or received during a specified period
immediately preceding the effective date of coverage.
   (d) "Creditable coverage" means:
   (1) Any individual or group policy, contract, or program that is
written or administered by a disability insurance company, nonprofit
hospital service plan, health care service plan, fraternal benefits
society, self-insured employer plan, or any other entity, in this
state or elsewhere, and that arranges or provides medical, hospital
and surgical coverage not designed to supplement other private or
governmental plans. The term includes continuation or conversion
coverage but does not include accident only, credit, coverage for
onsite medical clinics, disability income, Medicare supplement,
long-term care insurance, dental, vision, coverage issued as a
supplement to liability insurance, insurance arising out of a workers'
compensation or similar law, automobile medical payment insurance,
or insurance under which benefits are payable with or without regard
to fault and that is statutorily required to be contained in any
liability insurance policy or equivalent self-insurance.
   (2) The federal Medicare program pursuant to Title XVIII of the
Social Security Act.
   (3) The medicaid program pursuant to Title XIX of the Social
Security Act.
   (4) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital and surgical care.
   (5) 10 U.S.C. Chapter 55 (commencing with Section 1071) (Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS)).
   (6) A medical care program of the Indian Health Service or of a
tribal organization.
   (7) A state health benefits risk pool.
   (8) A health plan offered under 5 U.S.C. Chapter 89 (commencing
with Section 8901) (Federal Employees Health Benefits Program
(FEHBP)).
   (9) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the Public Health Service Act,
as amended by Public Law 104-191, the Health Insurance Portability
and Accountability Act of 1996.
   (10) A health benefit plan under Section 5(e) of the Peace Corps
Act (22 U.S.C. Sec. 2504(e)).
   (11) Any other creditable coverage as defined by subdivision (c)
of Section 2701 of Title XXVII of the federal Public Health Services
Act (42 U.S.C. Sec. 300gg(c)).
   (e) "Waivered condition" means a contract provision that excludes
coverage for charges or expenses incurred during a specified period
of time for one or more specific, identified, medical conditions.
   (f) "Affiliation period" means a period that, under the terms of
the health benefit plan, must expire before health care services
under the plan become effective.

1357.51.  (a) No plan contract that covers three or more enrollees
shall exclude coverage for any individual on the basis of a
preexisting condition provision for a period greater than six months
following the individual's effective date of coverage. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
   (b) No plan contract that covers one or two individuals shall
exclude coverage on the basis of a preexisting condition provision
for a period greater than 12 months following the individual's
effective date of coverage, nor shall the plan limit or exclude
coverage for a specific enrollee by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition clause pursuant to this article. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the 12 months immediately
preceding the effective date of coverage.
   (c) A plan that does not utilize a preexisting condition provision
may impose a waiting or affiliation period not to exceed 60 days,
before the coverage issued subject to this article shall become
effective. During the waiting or affiliation period, the plan is not
required to provide health care services and no premium shall be
charged to the subscriber or enrollee.
   (d) A plan that does not utilize a preexisting condition provision
in plan contracts that cover one or two individuals may impose a
contract provision excluding coverage for waivered conditions. No
plan may exclude coverage on the basis of a waivered condition for a
period greater than 12 months following the individual's effective
date of coverage. A waivered condition provision contained in plan
contracts may relate only to conditions for which medical advice,
diagnosis, care, or treatment, including use of prescription drugs,
was recommended or received from a licensed health practitioner
during the 12 months immediately preceding the effective date of
coverage.
   (e) In determining whether a preexisting condition provision, a
waivered condition provision, or a waiting or affiliation period
applies to any enrollee, a plan shall credit the time the enrollee
was covered under creditable coverage, provided that the enrollee
becomes eligible for coverage under the succeeding plan contract
within 62 days of termination of prior coverage, exclusive of any
waiting or affiliation period, and applies for coverage under the
succeeding plan within the applicable enrollment period. A plan shall
also credit any time that an eligible employee must wait before
enrolling in the plan, including any postenrollment or
employer-imposed waiting or affiliation period.
   However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a plan shall credit the time the person was
covered under creditable coverage if the person becomes eligible for
health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan contract
within the applicable enrollment period.
   (f) No plan shall exclude late enrollees from coverage for more
than 12 months from the date of the late enrollee's application for
coverage. No plan shall require any premium or other periodic charge
to be paid by or on behalf of a late enrollee during the period of
exclusion from coverage permitted by this subdivision.
   (g) A health care service plan issuing group coverage may not
impose a preexisting condition exclusion upon the following:
   (1) A newborn individual, who, as of the last day of the 30-day
period beginning with the date of birth, has applied for coverage
through the employer-sponsored plan.
   (2) A child who is adopted or placed for adoption before attaining
18 years of age and who, as of the last day of the 30-day period
beginning with the date of adoption or placement for adoption, is
covered under creditable coverage and applies for coverage through
the employer-sponsored plan. This provision shall not apply if, for
63 continuous days, the child is not covered under any creditable
coverage.
   (3) A condition relating to benefits for pregnancy or maternity
care.
   (h) An individual's period of creditable coverage shall be
certified pursuant to subsection (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act (42 U.S.C. Sec. 300gg(e)).

1357.52.  Except in the case of a late enrollee, or for satisfaction
of a preexisting condition clause in the case of initial coverage of
an eligible employee, a plan may not exclude any eligible employee
or dependent who would otherwise be entitled to health care services
on the basis of any of the following: the health status, the medical
condition, including both physical and mental illnesses, the claims
experience, the medical history, the genetic information, or the
disability or evidence of insurability including conditions arising
out of acts of domestic violence of that employee or dependent. No
plan contract may limit or exclude coverage for a specific eligible
employee or dependent by type of illness, treatment, medical
condition, or accident, except for preexisting conditions as
permitted by Section 1357.06.

1357.53.  All group health benefit plans shall be renewable with
respect to the contractholder or employer except as follows:
   (a) For nonpayment of the required premiums by the contractholder
or employer.
   (b) For fraud or other intentional misrepresentation of material
fact by the contractholder or employer.
   (c) For noncompliance with a material plan contract provision.
   (d) If the plan ceases to provide or arrange for the provision of
health care services for new health benefit plans in the state;
provided, however, that the following conditions are satisfied:
   (1) Notice of the decision to cease new or existing group health
benefit plans in the state shall be provided to the director and to
either the contractholder or employer at least 180 days prior to
discontinuation of this coverage.
   (2) Group health benefit plans shall not be canceled for 180 days
after the date of the notice required under paragraph (1) and for
that business of a plan that remains in force, any plan that ceases
to offer for sale new group health benefit plans shall continue to be
governed by this section with respect to business conducted under
this section.
   (3) Except as authorized under subdivision (d) of Section 1357.09
and Section 1357.10, a plan that ceases to write new group health
benefit plans in this state after the effective date of this section
shall be prohibited from offering for sale group health benefit plans
in this state for a period of five years from the date of notice to
the director.
   (e) If the plan withdraws a group health benefit plan from the
market; provided, that the plan notifies all affected contractholders
or employers and the director at least 90 days prior to the
discontinuation of these plans, and that the plan makes available to
the employer all health benefit plans that it makes available to new
employer business without regard to the claims experience or
health-related factors of enrollees.

1357.54.  All individual health benefit plans, except for short-term
limited duration insurance, shall be renewable with respect to all
eligible individuals or dependents at the option of the individual
except as follows:
   (a) For nonpayment of the required premiums or contributions by
the individual in accordance with the terms of the health insurance
coverage or the timeliness of the payments.
   (b) For fraud or intentional misrepresentation of material fact
under the terms of the coverage by the individual.
   (c) Movement of the individual contractholder outside the service
area, but only if the coverage is terminated uniformly without regard
to any health status-related factor of covered individuals.
   (d) If the plan ceases to provide or arrange for the provision of
health care services for new individual health benefit plans in this
state; provided, however, that the following conditions are
satisfied:
   (1) Notice of the decision to cease new or existing individual
health benefit plans in the state is provided to the director and to
the individual at least 180 days prior to discontinuation of that
coverage.
   (2) Individual health benefit plans shall not be canceled for 180
days after the date of the notice required under paragraph (1) and
for that business of a plan that remains in force, any plan that
ceases to offer for sale new individual health benefit plans shall
continue to be governed by this section with respect to business
conducted under this section.
   (3) A plan that ceases to write new individual health benefit
plans in this state after the effective date of this section shall be
prohibited from offering for sale individual health benefit plans in
this state for a period of five years from the date of notice to the
director.
   (e) If the plan withdraws an individual health benefit plan from
the market; provided, that the plan notifies all affected individuals
and the director at least 90 days prior to the discontinuation of
these plans, and that the plan makes available to the individual all
health benefit plans that it makes available to new individual
business without regard to any health status-related factor of
enrolled individuals or individuals who may become eligible for the
coverage.