AB 108

Under current law, for purposes of determining how long a preexisting

condition exclusion may be imposed under a group health benefit plan, if a person

who enrolls in the group health benefit plan had other coverage before that

enrollment, the person must be given credit for the time during which he or she was

previously covered when determining how long a preexisting condition exclusion

may be imposed under the new coverage. Previous coverage may not be counted for

the credit, however, if the person did not have coverage for a period of 63 or more days

before the person's new coverage commenced. This bill increases that amount of

time, so that a person may get credit for previous coverage if it ended up to 90 days,

rather than 63 days, before the person enrolled in the group health benefit plan.

Also under current law, every insurer that issues a group or individual health

benefit plan must have an internal grievance procedure under which an insured may

submit a written grievance and a grievance panel must investigate the grievance

and, if appropriate, take corrective action. In addition, every insurer that issues a

group or individual health benefit plan must have an independent review procedure

for review, after the internal grievance procedure has been exhausted, of certain

decisions that are adverse to an insured. The adverse decision must relate to the

insurer's denial of treatment or payment for treatment that the insurer determined

was experimental or to the insurer's denial, reduction, or termination of a health care

service or payment for a health care service on the basis that the health care service

did not meet the plan's requirements for medical necessity, appropriateness, health

care setting, level of care, or effectiveness. An independent review may be conducted

only by an independent review organization that has been certified by the

Commissioner of Insurance (commissioner).

The bill adds the rescission of a policy or certificate and a coverage denial

determination based on a preexisting condition exclusion to the types of adverse

decisions that are eligible for review under a group or individual health benefit plan's

independent review procedure. In addition, the bill requires every insurer that

issues individual health benefit plans to report to the commissioner annually the

number of individual health benefit plans issued by the insurer in the preceding year

and the number of individual health benefit plans with respect to which the insurer

initiated or completed a cancellation or rescission in the preceding year.