New California Insurance Laws


AB 248

This bill requires employers with 50 or more employees to offer only comprehensive health insurance to their employees. AB 248 prohibits health plans, insurers and agents from offering large employers coverage unless the core policy is at 60 percent minimum value or higher. This requirement applies if an employer purchases that health coverage from a health plan or health insurer regulated by the State of California. It is still possible for employers to self-fund plans that do not meet the minimum value standard. This new law is effective January 1, 2016.


AB 339

This bill prohibits a formulary for outpatient prescription drugs maintained by a health care service plan or health insurer from discouraging the enrollment of individuals with health conditions and from reducing the generosity of the benefit for enrollees or insureds with a particular condition. The bill provides that the copayment, coinsurance, or any other form of cost sharing for a covered outpatient prescription drug for an individual prescription shall not exceed $250 for a supply of up to 30 days ($500 for a bronze plan).

This bill prohibits, for a non-grandfathered individual or small group policy, the annual deductible for outpatient drugs from exceeding twice these amounts. The bill makes these cost-sharing limits applicable only to covered outpatient prescription drugs that constitute essential health benefits. The bill requires a policy to cover a single-tablet prescription drug regimen for combination antiretroviral drug treatments that are medically necessary for the treatment of AIDS/HIV. The bill requires a non-grandfathered individual or small group policy to use specified definitions for each tier of a drug formulary.

This bill requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to provide coverage for medically necessary prescription drugs, including non-formulary drugs determined to be medically necessary.

This bill makes these provisions applicable to non-grandfathered health care service plan contracts or health insurance policies that are offered, renewed, or amended on or after January 1, 2017.

The bill, with regard to an insured changing policy, prohibits a new insurer from requiring the insured to repeat step therapy when that person is already being treated for a medical condition by a prescription drug.


AB 1305

The bill requires, commencing January 1, 2017, a large group market plan policy, for family coverage that includes a deductible, except a high deductible health plan, that an individual within a family shall not have a deductible that is greater than the deductible limit for individual coverage for that product. 


SB 137

This bill, commencing July 1, 2016, requires a health care service plan, and a health insurer that contracts with providers for alternative rates of payment, to publish and maintain a provider directory or directories with information on contracting providers that deliver health care services to the plan’s enrollees or the health insurer’s insureds, and would require the plan or health insurer to make an online provider directory or directories available on the plan or health insurer’s Internet Web site.

This bill requires the Department of Managed Health Care and the Department of Insurance to develop uniform provider directory standards. The bill requires a health care service plan or health insurer to take appropriate steps to ensure the accuracy of the information contained in the plan or health insurer’s directory or directories, and requires the plan or health insurer, at least annually, to review and update the entire provider directory or directories for each product offered. The bill requires a plan or insurer, at least weekly, to update its online provider directory or directories, and requires a plan or insurer, at least quarterly, to update its printed provider directory or directories. The bill requires a health care service plan or health insurer to reimburse an enrollee or insured for any amount beyond what the enrollee or insured would have paid for in-network services, if the enrollee or insured reasonably relied on the provider directory. The bill authorizes a plan or health insurer to delay payment or reimbursement owed to a provider or provider group if the provider or provider group fails to respond to the plan’s or health insurer’s attempts to verify the provider’s or provider group’s information.

About John Garner

John Garner has over thirty five years of experience in employee benefits. He specializes in compliance, health care reform, the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), and the Employee Retirement Income Security Act (ERISA). He helps clients with life, health, and disability benefits, cost containment, flexible benefits, and claim consulting.

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