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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 99 120 • 1 mail - -•-- - i - - - ; - - 9. ; 19.7M •- • - - - 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. stiek .ments .ded or ti fillyJ :ospital ise and chaser, igency action, to the C to the of any _ Hospital 0 squired to any son or r nt and .ack of d plan. hapter of the to the 99 200 99 200