1357.500
. As used in this article, the following definitions shall
apply:
(a) "Child" means a child described in Section 22775 of the
Government Code and subdivisions (n) to (p), inclusive, of Section
599.500 of Title 2 of the California Code of Regulations.
(b) "Dependent" means the spouse or registered domestic partner,
or child, of an eligible employee, subject to applicable terms of the
health care service plan contract covering the employee, and
includes dependents of guaranteed association members if the
association elects to include dependents under its health coverage at
the same time it determines its membership composition pursuant to
subdivision (m).
(c) "Eligible employee" means either of the following:
(1) Any permanent employee who is actively engaged on a full-time
basis in the conduct of the business of the small employer with a
normal workweek of an average of 30 hours per week over the course of
a month, at the small employer's regular places of business, who has
met any statutorily authorized applicable waiting period
requirements. The term includes sole proprietors or partners of a
partnership, if they are actively engaged on a full-time basis in the
small employer's business and included as employees under a health
care service plan contract of a small employer, but does not include
employees who work on a part-time, temporary, or substitute basis. It
includes any eligible employee, as defined in this paragraph, who
obtains coverage through a guaranteed association. Employees of
employers purchasing through a guaranteed association shall be deemed
to be eligible employees if they would otherwise meet the definition
except for the number of persons employed by the employer. Permanent
employees who work at least 20 hours but not more than 29 hours are
deemed to be eligible employees if all four of the following apply:
(A) They otherwise meet the definition of an eligible employee
except for the number of hours worked.
(B) The employer offers the employees health coverage under a
health benefit plan.
(C) All similarly situated individuals are offered coverage under
the health benefit plan.
(D) The employee must have worked at least 20 hours per normal
workweek for at least 50 percent of the weeks in the previous
calendar quarter. The health care service plan may request any
necessary information to document the hours and time period in
question, including, but not limited to, payroll records and employee
wage and tax filings.
(2) Any member of a guaranteed association as defined in
subdivision (m).
(d) "Exchange" means the California Health Benefit Exchange
created by Section 100500 of the Government Code.
(e) "In force business" means an existing health benefit plan
contract issued by the plan to a small employer.
(f) "Late enrollee" means an eligible employee or dependent who
has declined enrollment in a health benefit plan offered by a small
employer at the time of the initial enrollment period provided under
the terms of the health benefit plan consistent with the periods
provided pursuant to Section 1357.503 and who subsequently requests
enrollment in a health benefit plan of that small employer, except
where the employee or dependent qualifies for a special enrollment
period provided pursuant to Section 1357.503. It also means any
member of an association that is a guaranteed association as well as
any other person eligible to purchase through the guaranteed
association when that person has failed to purchase coverage during
the initial enrollment period provided under the terms of the
guaranteed association's plan contract consistent with the periods
provided pursuant to Section 1357.503 and who subsequently requests
enrollment in the plan, except where that member or person qualifies
for a special enrollment period provided pursuant to Section
1357.503.
(g) "New business" means a health care service plan contract
issued to a small employer that is not the plan's in force business.
(h) "Preexisting condition provision" means a contract provision
that excludes coverage for charges or expenses incurred during a
specified period following the enrollee's effective date of coverage,
as to a condition for which medical advice, diagnosis, care, or
treatment was recommended or received during a specified period
immediately preceding the effective date of coverage. No health care
service plan shall limit or exclude coverage for any individual based
on a preexisting condition whether or not any medical advice,
diagnosis, care, or treatment was recommended or received before that
date.
(i) "Creditable coverage" means:
(1) Any individual or group policy, contract, or program that is
written or administered by a disability insurer, health care service
plan, fraternal benefits society, self-insured employer plan, or any
other entity, in this state or elsewhere, and that arranges or
provides medical, hospital, and surgical coverage not designed to
supplement other private or governmental plans. The term includes
continuation or conversion coverage but does not include accident
only, credit, coverage for onsite medical clinics, disability income,
Medicare supplement, long-term care, dental, vision, coverage issued
as a supplement to liability insurance, insurance arising out of a
workers' compensation or similar law, automobile medical payment
insurance, or insurance under which benefits are payable with or
without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent
self-insurance.
(2) The Medicare Program pursuant to Title XVIII of the federal
Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(3) The Medicaid program pursuant to Title XIX of the federal
Social Security Act (42 U.S.C. Sec. 1396 et seq.).
(4) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(5) Chapter 55 (commencing with Section 1071) of Title 10 of the
United States Code (Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS)).
(6) A medical care program of the Indian Health Service or of a
tribal organization.
(7) A health plan offered under Chapter 89 (commencing with
Section 8901) of Title 5 of the United States Code (Federal Employees
Health Benefits Program (FEHBP)).
(8) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the Public Health Service Act,
as amended by Public Law 104-191, the Health Insurance Portability
and Accountability Act of 1996.
(9) A health benefit plan under Section 5(e) of the Peace Corps
Act (22 U.S.C. Sec. 2504(e)).
(10) Any other creditable coverage as defined by subsection (c) of
Section 2704 of Title XXVII of the federal Public Health Service Act
(42 U.S.C. Sec. 300gg-3(c)).
(j) "Rating period" means the period for which premium rates
established by a plan are in effect and shall be no less than 12
months from the date of issuance or renewal of the plan contract.
(k) (1) "Small employer" means any of the following:
(A) For plan years commencing on or after January 1, 2014, and on
or before December 31, 2015, any person, firm, proprietary or
nonprofit corporation, partnership, public agency, or association
that is actively engaged in business or service, that, on at least 50
percent of its working days during the preceding calendar quarter or
preceding calendar year, employed at least one, but no more than 50,
eligible employees, the majority of whom were employed within this
state, that was not formed primarily for purposes of buying health
care service plan contracts, and in which a bona fide
employer-employee relationship exists. For plan years commencing on
or after January 1, 2016, any person, firm, proprietary or nonprofit
corporation, partnership, public agency, or association that is
actively engaged in business or service, that, on at least 50 percent
of its working days during the preceding calendar quarter or
preceding calendar year, employed at least one, but no more than 100,
employees, the majority of whom were employed within this state,
that was not formed primarily for purposes of buying health care
service plan contracts, and in which a bona fide employer-employee
relationship exists. In determining whether to apply the calendar
quarter or calendar year test, a health care service plan shall use
the test that ensures eligibility if only one test would establish
eligibility. In determining the number of employees or eligible
employees, companies that are affiliated companies and that are
eligible to file a combined tax return for purposes of state taxation
shall be considered one employer. Subsequent to the issuance of a
health care service plan contract to a small employer pursuant to
this article, and for the purpose of determining eligibility, the
size of a small employer shall be determined annually. Except as
otherwise specifically provided in this article, provisions of this
article that apply to a small employer shall continue to apply until
the plan contract anniversary following the date the employer no
longer meets the requirements of this definition. It includes any
small employer as defined in this paragraph who purchases coverage
through a guaranteed association, and any employer purchasing
coverage for employees through a guaranteed association. This
subparagraph shall be implemented to the extent consistent with
PPACA, except that the minimum requirement of one employee shall be
implemented only to the extent required by PPACA.
(B) Any guaranteed association, as defined in subdivision (l),
that purchases health coverage for members of the association.
(2) For plan years commencing on or after January 1, 2014, the
definition of an employer, for purposes of determining whether an
employer with one employee shall include sole proprietors, certain
owners of "S" corporations, or other individuals, shall be consistent
with Section 1304 of PPACA.
(3) For plan years commencing on or after January 1, 2016, the
definition of small employer, for purposes of determining employer
eligibility in the small employer market, shall be determined using
the method for counting full-time employees and full-time equivalent
employees set forth in Section 4980H(c)(2) of the Internal Revenue
Code.
(l) "Guaranteed association" means a nonprofit organization
comprised of a group of individuals or employers who associate based
solely on participation in a specified profession or industry,
accepting for membership any individual or employer meeting its
membership criteria, and that (1) includes one or more small
employers as defined in subparagraph (A) of paragraph (1) of
subdivision (k), (2) does not condition membership directly or
indirectly on the health or claims history of any person, (3) uses
membership dues solely for and in consideration of the membership and
membership benefits, except that the amount of the dues shall not
depend on whether the member applies for or purchases insurance
offered to the association, (4) is organized and maintained in good
faith for purposes unrelated to insurance, (5) has been in active
existence on January 1, 1992, and for at least five years prior to
that date, (6) has included health insurance as a membership benefit
for at least five years prior to January 1, 1992, (7) has a
constitution and bylaws, or other analogous governing documents that
provide for election of the governing board of the association by its
members, (8) offers any plan contract that is purchased to all
individual members and employer members in this state, (9) includes
any member choosing to enroll in the plan contracts offered to the
association provided that the member has agreed to make the required
premium payments, and (10) covers at least 1,000 persons with the
health care service plan with which it contracts. The requirement of
1,000 persons may be met if component chapters of a statewide
association contracting separately with the same carrier cover at
least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a contract issued
by a plan is with an association, or a trust formed for or sponsored
by an association, to administer benefits for association members.
For purposes of this subdivision, an association formed by a
merger of two or more associations after January 1, 1992, and
otherwise meeting the criteria of this subdivision shall be deemed to
have been in active existence on January 1, 1992, if its predecessor
organizations had been in active existence on January 1, 1992, and
for at least five years prior to that date and otherwise met the
criteria of this subdivision.
(m) "Members of a guaranteed association" means any individual or
employer meeting the association's membership criteria if that person
is a member of the association and chooses to purchase health
coverage through the association. At the association's discretion, it
also may include employees of association members, association
staff, retired members, retired employees of members, and surviving
spouses and dependents of deceased members. However, if an
association chooses to include these persons as members of the
guaranteed association, the association shall make that election in
advance of purchasing a plan contract. Health care service plans may
require an association to adhere to the membership composition it
selects for up to 12 months.
(n) "Affiliation period" means a period that, under the terms of
the health care service plan contract, must expire before health care
services under the contract become effective.
(o) "Grandfathered health plan" has the meaning set forth in
Section 1251 of PPACA.
(p) "Nongrandfathered small employer health care service plan
contract" means a small employer health care service plan contract
that is not a grandfathered health plan.
(q) "Plan year" has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations.
(r) "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.
(s) "Small employer health care service plan contract" means a
health care service plan contract issued to a small employer.
(t) "Waiting period" means a period that is required to pass with
respect to an employee before the employee is eligible to be covered
for benefits under the terms of the contract.
(u) "Registered domestic partner" means a person who has
established a domestic partnership as described in Section 297 of the
Family Code.
(v) "Family" means the subscriber and his or her dependent or
dependents.
(w) "Health benefit plan" means a health care service plan
contract that provides medical, hospital, and surgical benefits for
the covered eligible employees of a small employer and their
dependents. The term does not include coverage of Medicare services
pursuant to contracts with the United States government, Medicare
supplement coverage, or coverage under a specialized health care
service plan contract.