Health care coverage: premium rate change: notice: other health coverage.

(1) Existing law, 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 its provisions a crime. Existing law provides for the licensure and regulation of health insurers by the Department of Insurance. Existing law prohibits, among other things, a change in premium rates for group health care service plan contracts and group health insurance policies from becoming effective unless a written notice is delivered, as specified. This bill would require, if the Department of Managed Health Care or the Department of Insurance determines that a small group rate is unreasonable or not justified, the contractholder or policyholder of a small group health care service plan contract or health insurance policy to be notified by the health care service plan or health insurer in writing of that determination. The bill would require the notification to be developed by the Department of Managed Health Care and the Department of Insurance, as specified. Existing law prohibits, among other things, a change in premium rates for individual health care service plan contracts and individual health insurance policies from becoming effective unless a written notice is delivered at least 15 days prior to the start of the annual enrollment period applicable to the contract or 60 days prior to the effective date of the contract renewal, whichever occurs earlier in the calendar year. This bill would require, if the Department of Managed Health Care or the Department of Insurance determines that an individual rate is unreasonable or not justified, the contractholder or policyholder to be notified by the health care service plan or health insurer in writing of that determination. The bill would require the notification to be developed by the Department of Managed Health Care and the Department of Insurance, as specified. The bill would instead prohibit a change in premium rates for individual health care service plan contracts and individual health insurance policies from becoming effective unless a written notice is provided at least 10 days prior to the start of the annual enrollment period applicable to the contract or 60 days prior to the effective date of the contract renewal, whichever occurs earlier in the calendar year. (2) Existing law requires a health care service plan or health insurer in the individual or small group market to file rate information with the Department of Managed Health Care or the Department of Insurance, as applicable, at least 60 days prior to implementing any rate change and requires that the information include a certification by an independent actuary that the rate increase is reasonable or unreasonable. Existing law authorizes the Department of Managed Health Care and the Department of Insurance to review these filings to, among other things, make a determination that an unreasonable rate increase is not justified. This bill would instead require, for grandfathered individual and grandfathered and nongrandfathered small group health care service plan contracts or health insurance policies, a health care service plan or health insurer to file rate information at least 120 days prior to implementing any rate change. The bill would require, for nongrandfathered individual health care service plan contracts or health insurance policies, a health care service plan or health insurer to file rate information either 100 days before the first day of the applicable open enrollment period for the preceding policy year, as defined, or on the date specified in federal guidance issued pursuant to a specified federal regulation, whichever date is earlier. The bill would require a health care service plan or health insurer to respond to any request for additional rate information necessary for the Department of Managed Health Care or the Department of Insurance to complete its review of the rate filing for products in the individual or small group market within 5 business days of the request and would require, except as provided, the Department of Managed Health Care and the Department of Insurance to review these filings and make its determination no later than 60 days following receipt of the rate information. The bill would require, for nongrandfathered individual health care service plan contracts and health insurance policies, the respective department to make its determination no later than the 15 days before the first day of the applicable open enrollment period for the preceding policy year, as defined, and would authorize the Department of Managed Health Care and the Department of Insurance, respectively, to determine that a plan's or health insurer's rate increase is unreasonable or not justified if the plan or health insurer fails to provide all the information necessary for the respective department to complete its review. The bill would require, if the respective department determines that a plan's or health insurer's rate increase for an individual or small group market product is unreasonable or not justified, the health care service plan or health insurer to provide notice of that determination to any individual or small group applicant, as specified. (3) This bill would also revise obsolete references and would make other conforming and technical, nonsubstantive changes. (4) Because a willful violation of the bill's requirements with respect to health care service plans 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.