AB 312

On March 23, 2010, the federal government enacted the Patient Protection and

Affordable Care Act (PPACA), which, among other things, imposes requirements and

limitations on health insurance policies and health plans. This bill incorporates

some of those requirements and limitations of PPACA into state law.

Under current law, no insurer may rescind an insurance policy for a

misrepresentation made by a policyholder if the insurer had constructive or active

knowledge of the fact. An insurer may rescind a policy if it acquires knowledge of

sufficient facts to constitute grounds for rescission after the policy was issued only

if the insurer notifies the insured within 60 days after acquiring the knowledge of its

intent to rescind or within 120 days if the insurer needs to gather additional medical

information. This bill prohibits an insurer from rescinding a health benefit plan, or

a self-insured governmental health plan from recinding a self-insured plan, unless

the applicant for coverage committed fraud or made an intentional

misrepresentation of material fact with regard to obtaining coverage. The insurer

or governmental entity must provide notice before rescinding the plan.

Under current law, a policy or plan providing individual health insurance may

not reduce or deny coverage based on a preexisting disease or condition (preexisting

condition exclusion) after 12 months after the date of issue of the policy or plan unless

the condition was specifically excluded from coverage. The preexisting condition

that is excluded from coverage must have been one for which the individual received

or was recommended medical advice, diagnosis, care, or treatment within 12 months

before the coverage under the plan became effective. A group health benefit plan,

under current law may impose a preexisting condition exclusion on an individual's

coverage only if the condition being excluded was one for which the individual was

recommended or received medical advice, diagnosis, care, or treatment within six

months before the individual's enrollment date under the plan. This bill prohibits

an insurer under a group health benefit plan or an individual health insurance

policy, except for a grandfathered health plan providing individual health coverage,

from imposing a preexisting condition exclusion on a participant or beneficiary

under the plan who is under 19 years of age. A grandfathered health plan is a health

policy or plan in existence on March 23, 2010. As of January 1, 2014, this bill

prohibits an insurer that offers a group health benefit plan or an individual health

insurance policy, except for a grandfathered health plan providing individual health

coverage, from imposing a preexisting condition exclusion on any participant or

beneficiary under the plan, regardless of age.

Under the bill, every group health plan, except for a grandfathered health plan,

and every insurer providing a health insurance policy, and every self-insured

governmental health plan must provide coverage for all preventive care services as

defined in PPACA. The bill prohibits a plan or insurer from subjecting the coverage

of a preventive care service to a copayment or coinsurance.