Section 1389.7 Of Article 7.5. Underwriting Practices From California Health And Safety Code >> Division 2. >> Chapter 2.2. >> Article 7.5.
1389.7
. (a) Every health care service plan that offers, issues, or
renews individual plan contracts shall offer to any individual, who
was covered under an individual plan contract that was rescinded, a
new individual plan contract, without medical underwriting, that
provides equal benefits. A health care service plan may also permit
an individual, who was covered under an individual plan contract that
was rescinded, to remain covered under that individual plan
contract, with a revised premium rate that reflects the number of
persons remaining on the plan contract.
(b) "Without medical underwriting" means that the health care
service plan shall not decline to offer coverage to, or deny
enrollment of, the individual or impose any preexisting condition
exclusion on the individual who is issued a new individual plan
contract or remains covered under an individual plan contract
pursuant to this section.
(c) If a new individual plan contract is issued, the plan may
revise the premium rate to reflect only the number of persons covered
on the new individual plan contract.
(d) Notwithstanding subdivisions (a) and (b), if an individual was
subject to a preexisting condition provision or a waiting or an
affiliation period under the individual plan contract that was
rescinded, the health care service plan may apply the same
preexisting condition provision or waiting or affiliation period in
the new individual plan contract. The time period in the new
individual plan contract for the preexisting condition provision or
waiting or affiliation period shall not be longer than the one in the
individual plan contract that was rescinded and the health care
service plan shall credit any time that the individual was covered
under the rescinded individual plan contract.
(e) The plan shall notify in writing all enrollees of the right to
coverage under an individual plan contract pursuant to this section,
at a minimum, when the plan rescinds the individual plan contract.
The notice shall adequately inform enrollees of the right to coverage
provided under this section.
(f) The plan shall provide 60 days for enrollees to accept the
offered new individual plan contract and this contract shall be
effective as of the effective date of the original plan contract and
there shall be no lapse in coverage.
(g) This section does not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(h) (1) This section shall become inoperative on January 1, 2014,
or the 91st calendar day following the adjournment of the 2013-14
First Extraordinary Session, whichever date is later.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-91), this section
shall become operative 12 months after the date of that repeal or
amendment.