1357.03
. (a) (1) Upon the effective date of this article, a plan
shall fairly and affirmatively offer, market, and sell all of the
plan's health care service plan contracts that are sold to small
employers or to associations that include small employers to all
small employers in each service area in which the plan provides or
arranges for the provision of health care services.
(2) Each plan shall make available to each small employer all
small employer health care service plan contracts that the plan
offers and sells to small employers or to associations that include
small employers in this state.
(3) No plan or solicitor shall induce or otherwise encourage a
small employer to separate or otherwise exclude an eligible employee
from a health care service plan contract that is provided in
connection with the employee's employment or membership in a
guaranteed association.
(4) A plan contracting to participate in the voluntary purchasing
pool for small employers provided for under Article 4 (commencing
with Section 10730) of Chapter 8 of Part 2 of Division 2 of the
Insurance Code shall be deemed in compliance with the requirements of
paragraph (1) for a contract offered through the voluntary
purchasing pool established under Article 4 (commencing with Section
10730) of Chapter 8 of Part 2 of Division 2 of the Insurance Code in
those geographic regions in which plans participate in the pool, if
the contract is offered exclusively through the pool.
(5) (A) A plan shall be deemed to meet the requirements of
paragraphs (1) and (2) with respect to a plan contract that qualifies
as a grandfathered health plan under Section 1251 of PPACA if all of
the following requirements are met:
(i) The plan offers to renew the plan contract, unless the plan
withdraws the plan contract from the small employer market pursuant
to subdivision (e) of Section 1357.11.
(ii) The plan provides appropriate notice of the grandfathered
status of the contract in any materials provided to an enrollee of
the contract describing the benefits provided under the contract, as
required under PPACA.
(iii) The plan makes no changes to the benefits covered under the
plan contract other than those required by a state or federal law,
regulation, rule, or guidance and those permitted to be made to a
grandfathered health plan under PPACA.
(B) For purposes of this paragraph, "PPACA" 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 rules, regulations, or guidance
issued thereunder. For purposes of this paragraph, a "grandfathered
health plan" shall have the meaning set forth in Section 1251 of
PPACA.
(b) Every plan shall file with the director the reasonable
employee participation requirements and employer contribution
requirements that will be applied in offering its plan contracts.
Participation requirements shall be applied uniformly among all small
employer groups, except that a plan may vary application of minimum
employee participation requirements by the size of the small employer
group and whether the employer contributes 100 percent of the
eligible employee's premium. Employer contribution requirements shall
not vary by employer size. A health care service plan shall not
establish a participation requirement that (1) requires a person who
meets the definition of a dependent in subdivision (a) of Section
1357 to enroll as a dependent if he or she is otherwise eligible for
coverage and wishes to enroll as an eligible employee and (2) allows
a plan to reject an otherwise eligible small employer because of the
number of persons that waive coverage due to coverage through another
employer. Members of an association eligible for health coverage
under subdivision (o) of Section 1357, but not electing any health
coverage through the association, shall not be counted as eligible
employees for purposes of determining whether the guaranteed
association meets a plan's reasonable participation standards.
(c) The plan shall not reject an application from a small employer
for a health care service plan contract if all of the following are
met:
(1) The small employer, as defined by paragraph (1) of subdivision
(l) of Section 1357, offers health benefits to 100 percent of its
eligible employees, as defined by paragraph (1) of subdivision (b) of
Section 1357. Employees who waive coverage on the grounds that they
have other group coverage shall not be counted as eligible employees.
(2) The small employer agrees to make the required premium
payments.
(3) The small employer agrees to inform the small employers'
employees of the availability of coverage and the provision that
those not electing coverage must wait one year to obtain coverage
through the group if they later decide they would like to have
coverage.
(4) The employees and their dependents who are to be covered by
the plan contract work or reside in the service area in which the
plan provides or otherwise arranges for the provision of health care
services.
(d) No plan or solicitor shall, directly or indirectly, engage in
the following activities:
(1) Encourage or direct small employers to refrain from filing an
application for coverage with a plan because of the health status,
claims experience, industry, occupation of the small employer, or
geographic location provided that it is within the plan's approved
service area.
(2) Encourage or direct small employers to seek coverage from
another plan or the voluntary purchasing pool established under
Article 4 (commencing with Section 10730) of Chapter 8 of Part 2 of
Division 2 of the Insurance Code because of the health status, claims
experience, industry, occupation of the small employer, or
geographic location provided that it is within the plan's approved
service area.
(e) A plan shall not, directly or indirectly, enter into any
contract, agreement, or arrangement with a solicitor that provides
for or results in the compensation paid to a solicitor for the sale
of a health care service plan contract to be varied because of the
health status, claims experience, industry, occupation, or geographic
location of the small employer. This subdivision does not apply to a
compensation arrangement that provides compensation to a solicitor
on the basis of percentage of premium, provided that the percentage
shall not vary because of the health status, claims experience,
industry, occupation, or geographic area of the small employer.
(f) A policy or contract that covers two or more employees shall
not establish rules for eligibility, including continued eligibility,
of an individual, or dependent of an individual, to enroll under the
terms of the plan based on any of the following health
status-related factors:
(1) Health status.
(2) Medical condition, including physical and mental illnesses.
(3) Claims experience.
(4) Receipt of health care.
(5) Medical history.
(6) Genetic information.
(7) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(8) Disability.
(g) A plan shall comply with the requirements of Section 1374.3.