Section 1357.09 Of Article 3.1. Small Employer Group Access To Contracts For Health Care Services From California Health And Safety Code >> Division 2. >> Chapter 2.2. >> Article 3.1.
1357.09
. No plan shall be required to offer a health care service
plan contract or accept applications for the contract pursuant to
this article in the case of any of the following:
(a) To a small employer, if the small employer is not physically
located in a plan's approved service areas, or if an eligible
employee and dependents who are to be covered by the plan contract do
not work or reside within a plan's approved service areas.
(b) (1) Within a specific service area or portion of a service
area, if a plan reasonably anticipates and demonstrates to the
satisfaction of the director that it will not have sufficient health
care delivery resources to assure that health care services will be
available and accessible to the eligible employee and dependents of
the employee because of its obligations to existing enrollees.
(2) A plan that cannot offer a health care service plan contract
to small employers because it is lacking in sufficient health care
delivery resources within a service area or a portion of a service
area may not offer a contract in the area in which the plan is not
offering coverage to small employers to new employer groups with more
than 50 eligible employees until the plan notifies the director that
it has the ability to deliver services to small employer groups, and
certifies to the director that from the date of the notice it will
enroll all small employer groups requesting coverage in that area
from the plan unless the plan has met the requirements of subdivision
(d).
(3) Nothing in this article shall be construed to limit the
director's authority to develop and implement a plan of
rehabilitation for a health care service plan whose financial
viability or organizational and administrative capacity has become
impaired.
(c) Offer coverage to a small employer or an eligible employee as
defined under paragraph (2) of subdivision (b) of Section 1357 that,
within 12 months of application for coverage, disenrolled from a plan
contract offered by the plan.
(d) (1) The director approves the plan's certification that the
number of eligible employees and dependents enrolled under contracts
issued during the current calendar year equals or exceeds either of
the following:
(A) In the case of a plan that administers any self-funded health
coverage arrangements in California, 10 percent of the total
enrollment of the plan in California as of December 31 of the
preceding year.
(B) In the case of a plan that does not administer any self-funded
health coverage arrangements in California, 8 percent of the total
enrollment of the plan in California as of December 31 of the
preceding year. If that certification is approved, the plan shall not
offer any health care service plan contract to any small employers
during the remainder of the current year.
(2) If a health care service plan treats an affiliate or
subsidiary as a separate carrier for the purpose of this article
because one health care service plan is qualified under the federal
Health Maintenance Organization Act (42 U.S.C. Sec. 300e et seq.) and
does not offer coverage to small employers, while the affiliate or
subsidiary offers a plan contract that is not qualified under the
federal Health Maintenance Organization Act (42 U.S.C. Sec. 300e et
seq.) and offers plan contracts to small employers, the health care
service plan offering coverage to small employers shall enroll new
eligible employees and dependents, equal to the applicable percentage
of the total enrollment of both the health care service plan
qualified under the federal Health Maintenance Organization Act (42
U.S.C. Sec. 300e et seq.) and its affiliate or subsidiary.
(3) (A) The certified statement filed pursuant to this subdivision
shall state the following:
(i) Whether the plan administers any self-funded health coverage
arrangements in California.
(ii) The plan's total enrollment as of December 31 of the
preceding year.
(iii) The number of eligible employees and dependents enrolled
under contracts issued to small employer groups during the current
calendar year.
(B) The director shall, within 45 days, approve or disapprove the
certified statement. If the certified statement is disapproved, the
plan shall continue to issue coverage as required by Section 1357.03
and be subject to disciplinary action as set forth in Article 7
(commencing with Section 1386).
(e) A health care service plan that, as of December 31 of the
prior year, had a total enrollment of fewer than 100,000 and 50
percent or more of the plan's total enrollment have premiums paid by
the Medi-Cal program.
(f) A social health maintenance organization, as described in
subdivision (a) of Section 2355 of the federal Deficit Reduction Act
of 1984 (P.L. 98-369), that, as of December 31 of the prior year, had
a total enrollment of fewer than 100,000 and has 50 percent or more
of the organization's total enrollment premiums paid by the Medi-Cal
program or Medicare programs, or by a combination of Medi-Cal and
Medicare. In no event shall this exemption be based upon enrollment
in Medicare supplement contracts, as described in Article 3.5
(commencing with Section 1358).