Section 1357.509 Of Article 3.16. Nongrandfathered Small Employer Plans From California Health And Safety Code >> Division 2. >> Chapter 2.2. >> Article 3.16.
1357.509
. (a) To the extent permitted by PPACA, a plan shall not 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:
(1) To a small employer, if the eligible employees and dependents
who are to be covered by the plan contract do not live, work, or
reside within a plan's approved service areas.
(2) (A) Within a specific service area or portion of a service
area, if a plan reasonably anticipates and demonstrates to the
satisfaction of the director all of the following:
(i) It will not have sufficient health care delivery resources to
ensure 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.
(ii) It is applying this subparagraph uniformly to all employers
without regard to the claims experience of those employers, and their
employees and dependents, or any health status-related factor
relating to those employees and dependents.
(iii) The action is not unreasonable or clearly inconsistent with
the intent of this chapter.
(B) 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 pursuant to subparagraph (A) may not offer a contract in the
area in which the plan is not offering coverage to small employers to
new employer groups until the later of the following dates:
(i) The 181st day after the date that coverage is denied pursuant
to this paragraph.
(ii) The date 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.
(C) Subparagraph (B) shall not limit the plan's ability to renew
coverage already in force or relieve the plan of the responsibility
to renew that coverage as described in Section 1365.
(D) Coverage offered within a service area after the period
specified in subparagraph (B) shall be subject to the requirements of
this section.
(b) (1) A health care service plan may decline to offer a health
care service plan contract to a small employer if the plan
demonstrates to the satisfaction of the director both of the
following:
(A) It does not have the financial reserves necessary to
underwrite additional coverage. In determining whether this
subparagraph has been satisfied, the director shall consider, but not
be limited to, the plan's compliance with the requirements of
Section 1367, Article 6 (commencing with Section 1375), and the rules
adopted thereunder.
(B) It is applying this paragraph uniformly to all employers
without regard to the claims experience of those employers and their
employees and dependents or any health status-related factor relating
to those employees and dependents.
(2) A plan that denies coverage to a small employer under
paragraph (1) shall not offer coverage in the group market before the
later of the following dates:
(A) The 181st day after the date that coverage is denied pursuant
to paragraph (1).
(B) The date the plan demonstrates to the satisfaction of the
director that the plan has sufficient financial reserves necessary to
underwrite additional coverage.
(3) Paragraph (2) shall not limit the plan's ability to renew
coverage already in force or relieve the plan of the responsibility
to renew that coverage as described in Section 1365.
(4) Coverage offered within a service area after the period
specified in paragraph (2) shall be subject to the requirements of
this section.
(c) 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, to the extent permitted by PPACA.