HomeMy WebLinkAboutMINUTES - 04201993 - 1.47 TO: BOARD OF SUPERVISORS Contra
FROM: Phil Batchelor, County Administrator .` Costa
Count
DATE: April 13, 1993
SUBJECT: LEGISLATION: SB 902 (Rogers)
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
INDICATE that the Board of Supervisors is a CO-SPONSOR, with the
California State Association of Counties, of SB 902 by Senator
Rogers, which would permanently exempt from the licensing
requirements of the Knox-Keene Health Care Service Plan Act of
1975, Contra Costa County's First Choice Health Plan and all other
health plans which are publicly sponsored and provide services only
to the public entity' s employees, their dependents, and retirees .
BACKGROUND:
Most health care service plans are required to be licensed by the
Commissioner of Corporations, pursuant to the Knox-Keene Health
Care Service Plan Act of 1975 . Existing law exempts from these
licensure requirements a health care service plan which is operated
by any city, county or public entity, where the plan provides
services only to the public entity' s employees, their dependents,
and retirees . This exemption is in effect only until January 1,
1994 .
Senator Rogers has introduced SB 902 at the request of CSAC for the
purpose of repealing the sunset date, thereby exempting public
entity operated health plans from licensure requirements
permanently. With the transfer of the First Choice Health Plan to
trust status, it is not clear that Contra Costa County would be
covered by the passage of SB 902, since the "County" no longer
officially operates and controls First Choice Health Plan. One
element of the Board' s 1993 Legislative Program provided for
legislation which would permanently exempt First Choice from the
licensure requirements . However, special language is required in
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
!� APPROVE OTHER
SIGNATURE(S): A)Z-
ACTION OF BOARD ON April 20, 1993 APPROVED AS RECOMMENDED X OTHER
VOTE OF SUPERVISORS
-� I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.. �lJ
ATTESTED �(Ji
Contact: PHIL BATCHELOR,CLERK OF THE BOARD OF
cc: See Page 2 . SUPERVISORS AND COUNTY ADMINISTRATOR
BY DEPUTY
order to cover First Choice's status as a joint labor-management
trust. These amendments have been incorporated into SB 902 . It
is, therefore, appropriate for the Board of Supervisors to agree to
co-sponsor SB 902 as long as it continues to exempt the First
Choice Health Plan from the Knox-Keene licensing requirements.
cc: County Administrator
Risk Manager
County Counsel
Steve Keil, CSAC
Les Spahnn, Heim, Noack & Spahnn
-2-
SENATE BILL No. 902
Introduced by Senator Rogers
March 4, 1993
An act to amend Section 1349.2 of the Health and Safety
Code, and to amend Section 740 of the Insurance Code,
relating to health care service plans.
LEGISLATIVE COUNSEL'S DIGEST
SB 902, as introduced, Rogers. Public entity operation of
employee health plan.
Existing law, the Knox-Keene Health Care Service Plan Act
of 1975, with certain exceptions, requires licensure from the
Commissioner of Corporations before any person may engage
in the business of a plan, as defined, or receive advance or
periodic consideration in connection with a plan from, or on
.behalf of, any persons.
Existing law .provides an exception to the Knox-Keene Act
licensure requirement for a health care service plan operated
by any city, county, city and county, public entity, or political
subdivision, that provides services only to its employees, their
dependents, and retirees, but not the general public, provides
funding for the program, and reimbursement on a
fee-for-service basis. This exemption is in effect only until
January 1, 1994, and existing law requires that the Senate
Office of Research conduct a study and report to the
Legislature no later than December 31, 1991, relating to this
exemption.
This bill would, instead, grant an exemption from the
Knox-Keene Act to any city, county, city and county, public
entity, as defined, or political subdivision, that provides
services only to its employees and their dependents, and
retirees and their dependents, but not the general public,
provides funding for the program, and files the appropriate
annual financial transaction reports with the Controller
99 90
SB 902 —2 —
pursuant
2 —pursuant specified provisions of law.
The bill would delete the requirement that the program
provide reimbursement only on a fee-for-service basis, would
delete the repeal date for this exemption, and would delete
the requirement for the study and the report.
This bill would define ``public entity" for this purpose to
include, but not be limited to, any joint.labor management .
trust that meets certain criteria.
Existing law presumes that any person or entity that
provides health coverage, whether the coverage is by direct
payment, reimbursement, or otherwise, is subject to the
jurisdiction of the Department of Insurance unless the person
or entity shows that, while providing the services, the person
or entity is subject to the jurisdiction of another state or
federal entity.
This bill would, with-certain exceptions relating to unfair or
deceptive acts, exempt from the Insurance Code any health
care service plan operated by any city, county, city and
county, public entity, or political subdivision that is exempt
from the Knox-Keene Act pursuant to the above-described 3
provisions.
Vote: majority. Appropriation: no. Fiscal committee:' yes.
State-mandated local program: no.
The people of the State of California do enact as follows. t:
1 SECTION 1. Section 1349.2 of the Health and Safety
2 Code is amended to read:
3 1349.2. (a) A health care service plan operated .by
4 any city, county, city and county, public entity, or
5 political subdivision that satisfies all of the following
6 criteria is exempt from Seel4em 4,M9 this chapter:
7 (1) Provides services only to its employees ; and their
8 dependents, and retirees and their dependents, but not
9 to the general public.
10 (2) Provides funding for the program.
11 that prreN4derrs a&e ffet at in
12 eentraeting arremgements, omt is, tl-.t the
13 reknbursement system is eft a fee fernser-- basis.
.
14 {b- -The Sebe Offiee of R......,,_„h. 464 eenduet a
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1 mail
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•- • - - - Vat. .•
•
SB 902
Afty eeastR-afieeal the
2 eperett4en of a health ease se ieep6n by a joint ase
3 of pewers agreem pursttemt to fele-1 (eemme
4 with geet4e ) e€Ghapter5e€ n -7e€Tide -1e€
5 the Gec e.
6 In eeadtteNng the study, the Senate B ee of D...,..are .
l.
7 sheA seed and iRptit &em eA inter-estea parties.
8 The study sheAl be eemplet and subwAtted te• the
10 fie} 14 is the intent e€ the T=gisletthe Senate
11 8fee e€ Rese _e study shaR preN4& rpt faetaa4
12 amd legal it-Aermet dwkt may asses the begislati in
13 EletenrAniag whether-; and to what emtent., et p
14 emempti fer- lieetttit-yamd peht4eal
15 empleyee weu4EI be in the ptiblie nest ftad net
16. detrime to the of.,..b,,eribers, enrrellees;er
17 ttaEler- this the emtent to
18 whAeh regtilatien of these mss` is net essential to the
19 emeses of tk6 ehopter
20 R is there. fern. #fie intent of the begislati filat the
21 in std is to&Ae-�iate the
22 fer the Department of Gerperett4ems to
23 eeffhmenee et&reetnent aetietts etgainst Otese pleAtso
24 selely beeause they are peried.
25 - } Puring the time peried of tqmperrary exempti
26 publie eftfit-y eT- peli eperettiftga
27 hear eare se inn to subdi-visishall
28 not engage in wW ae6ens Ow+ aye eentrarry to SeeSens
29 1378 wid I9 atd sheA net wee er ehamge ettypent
30 benefits emeept i ee eeti ... barg
31 .
32 fie} his see6eft shall remain in effeet only
33 Janeary �; 1994, and as e€ t et date is healed; unless a
34 statute, whAeh is eeaeted be€erre jaawar-y -1-,
35 1994; deletes or extends tlet at,--
36
#,36 (3) Files the appropriate fiscal reports with the
37 Controller pursuant to Section 12463 of the Government
38 Code.
39 (b) For the purposes of this section, "public entity"
40' includes, but is not limited to, any joint labor
99 160
-5 — SB 902
th
e 1 management trust governed by a board of trustees that
2 includes public entity trustees and operates a health care
g 3 service plan for the employees and their dependents, and
e 4 the retirees and their dependents, of the public entity
5 appointing the trustees.
6 SEC. 2. Section 740 of the Insurance Code is amended
7 to read:
r the 8 740. (a) Notwithstanding any other provision of law,
9 and except as provided herein, any person or other entity
10 -_eh that provides coverage in this state for medical,
et-a } 11 surgical, chiropractic, physical therapy, speech
t-e in
12 pathology, audiology, professional mental health, dental,
neat 13 hospital, or optometric expenses, whether seek the
14 coverage is by direct payment, reimbursement, or
I not 15 otherwise, shall be presumed to be subject to the
eT 16 jurisdiction.of the department unless the person or other
it'to 17 entity shows that while providing seeh the services it is
the 18 subject to the jurisdiction of another agency of this or
19 another state or the federal government.
the :�' 20 (b) A person or entity may show that it is subject to the
the 21 jurisdiction of another agency of this or another state or
to 22 the federal government by providing to the
,} 23 commissioner , the appropriate certificate or license
24 issued by the other governmental agency Leh that
. 4 25 permits or qualifies it to provide those services for which
26 it is licensed or certificated.
4MR 27 (c) Any person or entity Leh that is unable to show
28 that it is subject to the jurisdiction of another agency of
sent 29 this or another state or the federal government, shall
e 30 submit to an examination by the commissioner to
31 determine the organization and solvency of the person or
} 32 the entity, and to determine whether er net sueh the
33 person or entity is in compliance with the applicable
34 provisions of this code, and shall be required to obtain a
35 certificate of authority to do business in California and be
the 36 required to meet all appropriate reserve, surplus, capital,
ent 37 and other necessary requirements imposed by this code
38 for all insurers.
.ty„ 39 (d) Any person or entity unable to show that it is
bor is 40 subject to the jurisdiction of another agency of this or
160 99 180
SB 902 —6-
1
6-1 another state or the federal government shall be subject
2 to all appropriate provisions. of this code regarding the
3 . conduct of its business.
4 ' (e) The department shall prepare and maintain for
.5 public inspection a list of those persons or entities
6 described in subdivision (a) whieh that are not subject
7 to the jurisdiction of another agency of this, or another z A
8 state or the federalg overnment and whieh that the
9 department knows to be operating in this state. There j
10 shall be no liability of any kind on the part of the state,
11 the department, and its employees for the accuracy of i
12 stieh the list or for any comments made with respect to
13 it.
14 (f) Any administrator licensed by the department who
15 advertises or administers coverage in this state described
16 in subdivision (a), wl-Aeh that is provided by any person
17 or entity described in subdivision (c), and where stieh
18. the coverage does not meet all pertinent requirements
19 specified in this code and whieh that is not provided or
20 completely underwritten, insured or otherwise fully
21 covered by an admitted life or disability insurer, hospital
22 service plan or health care service plan, shall advise and
23 disclose to any purchaser, prospective purchaser,
24 covered person or entity, and any production agency
25 licensed by the department involved in the transaction, `)
26 all financial and operational information relative to the
27 content and scope of the plan and, specifically, as to the
28 lack of insurance or other coverage.
29 Any production agency obtaining knowledge of any
30 coverage relative to the content and scope of a hospital
31 service plan or health care. service plan, as required
32 under this subdivision, shall advise and disclose to any
33 purchaser, prospective purchaser, covered person or
34 entity, stteh the knowledge regarding the content and
35 scope of the plan and, specifically, as to the lack of
36 insurance by an admitted carrier or other qualified plan.
37 (g) A health care service plan, as defined in Chapter
. 38 2.2 (commencing with Section 1340) of Division 2 of the
39 Health and Safety Code, shall not be subject to the
40 provisions of this section.
99 200
-7 — SB 902
I (h) The department shall notify, in writing, the
subject 2 Commissioner of Corporations whenever it determines
ng the
3 that a multiple employer trust qualifies as a health care
ain for 4 service plan subject to Chapter 2.2 (commencing with
-.ntities 5 Section 1340) of Division 2 of the Health Safety Code.
subject 6 (i) Any health care service plan operated by any city,
nother 7 county, city and county, public entity, or political
tat the j �° � 8 subdivision, as defined pursuant. to Section 1349.2 of the
There 9 Health and Safety Code, that is exempt pursuant to
state, 10 Section 1349.2 of the Health and Safety Code from the
acy of 11 Knox-Keene Health Care Service Plan Act of 1975
sect to 12 (commencing with Section 1340) of the Health and
13 Safety Code, is also exempt from this code, except for the
nt who 14 prohibitions against unfair and deceptive acts pursuant to
scribed 15 subdivision (h) of Section 790.03 and the civil penalties
person 16 pursuant to Section 790.035.
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99 200 99 200