2010 California Code
Health and Safety Code
Article 4.6. Coverage For Federally Eligible Defined Individuals

1366.35.  (a) A health care service plan providing coverage for
hospital, medical, or surgical benefits under an individual health
care service plan contract may not, with respect to a federally
eligible defined individual desiring to enroll in individual health
insurance coverage, decline to offer coverage to, or deny enrollment
of, the individual or impose any preexisting condition exclusion with
respect to the coverage.
   (b) For purposes of this section, "federally eligible defined
individual" means an individual who, as of the date on which the
individual seeks coverage under this section, meets all of the
following conditions:
   (1) Has had 18 or more months of creditable coverage, and whose
most recent prior creditable coverage was under a group health plan,
a federal governmental plan maintained for federal employees, or a
governmental plan or church plan as defined in the federal Employee
Retirement Income Security Act of 1974 (29 U.S.C. Sec. 1002).
   (2) Is not eligible for coverage under a group health plan,
Medicare, or Medi-Cal, and does not have other health insurance
coverage.
   (3) Was not terminated from his or her most recent creditable
coverage due to nonpayment of premiums or fraud.
   (4) If offered continuation coverage under COBRA or Cal-COBRA, has
elected and exhausted that coverage.
   (c) Every health care service plan shall comply with applicable
federal statutes and regulations regarding the provision of coverage
to federally eligible defined individuals, including any relevant
application periods.
   (d) A health care service plan shall offer the following health
benefit plan contracts under this section that are designed for, made
generally available to, are actively marketed to, and enroll,
individuals: (1) either the two most popular products as defined in
Section 300gg-41(c)(2) of Title 42 of the United States Code and
Section 148.120(c)(2) of Title 45 of the Code of Federal Regulations
or (2) the two most representative products as defined in Section
300gg-41(c)(3) of the United States Code and Section 148.120(c)(3) of
Title 45 of the Code of Federal Regulations, as determined by the
plan in compliance with federal law. A health care service plan that
offers only one health benefit plan contract to individuals,
excluding health benefit plans offered to Medi-Cal or Medicare
beneficiaries, shall be deemed to be in compliance with this article
if it offers that health benefit plan contract to federally eligible
defined individuals in a manner consistent with this article.
   (e) (1) In the case of a health care service plan that offers
health insurance coverage in the individual market through a network
plan, the plan may do both of the following:
   (A) Limit the individuals who may be enrolled under that coverage
to those who live, reside, or work within the service area for the
network plan.
   (B) Within the service area of the plan, deny coverage to
individuals if the plan has demonstrated to the director that the
plan will not have the capacity to deliver services adequately to
additional individual enrollees because of its obligations to
existing group contractholders and enrollees and individual
enrollees, and that the plan is applying this paragraph uniformly to
individuals without regard to any health status related factor of the
individuals and without regard to whether the individuals are
federally eligible defined individuals.
   (2) A health care service plan, upon denying health insurance
coverage in any service area in accordance with subparagraph (B) of
paragraph (1), may not offer coverage in the individual market within
that service area for a period of 180 days after the coverage is
denied.
   (f) (1) A health care service plan may deny health insurance
coverage in the individual market to a federally eligible defined
individual if the plan has demonstrated to the director both of the
following:
   (A) The plan does not have the financial reserves necessary to
underwrite additional coverage.
   (B) The plan is applying this subdivision uniformly to all
individuals in the individual market and without regard to any health
status-related factor of the individuals and without regard to
whether the individuals are federally eligible individuals.
   (2) A health care service plan, upon denying individual health
insurance coverage in any service area in accordance with paragraph
(1), may not offer that coverage in the individual market within that
service area for a period of 180 days after the date the coverage is
denied or until the issuer has demonstrated to the director that the
plan has sufficient financial reserves to underwrite additional
coverage, whichever is later.
   (g) The requirement pursuant to federal law to furnish a
certificate of creditable coverage shall apply to health insurance
coverage offered by a health care service plan in the individual
market in the same manner as it applies to a health care service plan
in connection with a group health benefit plan.
   (h) A health care service plan shall compensate a life agent or
fire and casualty broker-agent whose activities result in the
enrollment of federally eligible defined individuals in the same
manner and consistent with the renewal commission amounts as the plan
compensates life agents or fire and casualty broker-agents for other
enrollees who are not federally eligible defined individuals and who
are purchasing the same individual health benefit plan contract.
   (i) Every health care service plan shall disclose as part of its
COBRA or Cal-COBRA disclosure and enrollment documents, an
explanation of the availability of guaranteed access to coverage
under the Health Insurance Portability and Accountability Act of
1996, including the necessity to enroll in and exhaust COBRA or
Cal-COBRA benefits in order to become a federally eligible defined
individual.
   (j) No health care service plan may request documentation as to
whether or not a person is a federally eligible defined individual
other than is permitted under applicable federal law or regulations.
   (k) This section shall not apply to coverage defined as excepted
benefits pursuant to Section 300gg(c) of Title 42 of the United
States Code.
   ( l) This section shall apply to health care service plan
contracts offered, delivered, amended, or renewed on or after January
1, 2001.


1366.6.  (a) For purposes of this section, the following definitions
shall apply:
   (1) "Exchange" means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.
   (2) "Federal act" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any amendments to, or regulations or guidance issued
under, those acts.
   (3) "Qualified health plan" has the same meaning as that term is
defined in Section 1301 of the federal act.
   (4) "Small employer" has the same meaning as that term is defined
in Section 1357.
   (b) Health care service plans participating in the Exchange shall
fairly and affirmatively offer, market, and sell in the Exchange at
least one product within each of the five levels of coverage
contained in subdivisions (d) and (e) of Section 1302 of the federal
act. The board established under Section 100500 of the Government
Code may require plans to sell additional products within each of
those levels of coverage. This subdivision shall not apply to a plan
that solely offers supplemental coverage in the Exchange under
paragraph (10) of subdivision (a) of Section 100504 of the Government
Code.
   (c) (1) Health care service plans participating in the Exchange
that sell any products outside the Exchange shall do both of the
following:
   (A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
   (B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
   (2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code between the Managed Risk
Medical Insurance Board and health care service plans for enrolled
Healthy Families beneficiaries or to contracts entered into pursuant
to Chapter 7 (commencing with Section 14000) of, or Chapter 8
(commencing with Section 14200) of, Part 3 of Division 9 of the
Welfare and Institutions Code between the State Department of Health
Care Services and health care service plans for enrolled Medi-Cal
beneficiaries.
   (d) Commencing January 1, 2014, a health care service plan shall,
with respect to plan contracts that cover hospital, medical, or
surgical benefits, only sell the five levels of coverage contained in
subdivisions (d) and (e) of Section 1302 of the federal act, except
that a health care service plan that does not participate in the
Exchange shall, with respect to plan contracts that cover hospital,
medical, or surgical benefits, only sell the four levels of coverage
contained in subdivision (d) of Section 1302 of the federal act.
   (e) Commencing January 1, 2014, a health care service plan that
does not participate in the Exchange shall, with respect to plan
contracts that cover hospital, medical, or surgical benefits, offer
at least one standardized product that has been designated by the
Exchange in each of the four levels of coverage contained in
subdivision (d) of Section 1302 of the federal act. This subdivision
shall only apply if the board of the Exchange exercises its authority
under subdivision (c) of Section 100504 of the Government Code.
Nothing in this subdivision shall require a plan that does not
participate in the Exchange to offer standardized products in the
small employer market if the plan only sells products in the
individual market. Nothing in this subdivision shall require a plan
that does not participate in the Exchange to offer standardized
products in the individual market if the plan only sells products in
the small employer market. This subdivision shall not be construed to
prohibit the plan from offering other products provided that it
complies with subdivision (d).