NEW LAWS 2014: Insurance/Health Care


This is the fifth in a series of articles on the new laws taking effect Wednesday, January 1, in California. (File Photo)

By Michael P. Neufeld

Sacramento, CA – On Wednesday, January 1, a host of new laws will take effect in California, related to insurance and health care. During the legislative year, Governor Jerry Brown signed a total of 800 bills and vetoed 96. Brown, who is a third-term governor, has now signed over 13,500 regular session bills during his tenure as the state’s top elected official.


Effective January 1, 2014

INFERTILITYA.B. 460 – COVERAGE: Infertility(D-Tom Ammiano-San Francisco/17) – Existing law,  the Knox-Keene Health Care Service Plan Act of 1975, requires health care service plans and health insurance contracts to offer coverage for the treatment of infertility, except in vitro fertilization, to the group policyholder (employer sponsor of a group health plan), but does not require the policyholder to purchase such coverage.  This bill mandates that such if such coverage is purchased, it must be provided without discrimination on the basis of age, ancestry, color, disability, domestic partner status, gender, gender expression, gender identity, genetic information, marital status, national origin, race, religion, sex or sexual orientation. This applies to insurance policies that are issued, amended or renewed to California residents, regardless of the situs of the contract. Because a willful violation of the bill’s provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.

A.B. 1000 – PHYSICAL THERAPISTS: Direct Access To Services: Professional Corporations(D-Bob Wieckowski-Fremont/25) – Existing law, the Physical Therapy Practice Act, creates the Physical Therapy Board of California and makes it responsible for the licensure and regulation of physical therapists. The act makes it a crime to violate any of its provisions. The act authorizes the board to suspend, revoke, or impose probationary conditions on a license, certificate, or approval issued under the act for unprofessional conduct, as specified. This legislation authorizes patients to access physical therapy treatment directly and, in those circumstances, requires a physical therapist to: 1) refer the patient to another specified medical provider if the patient’s condition requires treatment or services beyond the therapist’s scope of practice or if the patient is not progressing, 2)  disclose to the patient any financial interest he or she has in treating the patient, and,3)  with the patient’s written authorization, to notify the patient’s physician and surgeon, if any, that the physical therapist is treating the patient. The new law limits a physical therapist from treating a patient who initiated services directly for the lesser of more than 45 calendar days or 12 visits, except as specified, and requires a physical therapist to obtain the patient’s legal signature on a specified notice before performing services on that patient.

MIDWIFERYA.B. 1308 – MIDWIFERY(D-Susan Bonilla-Concord/14) – This bill removes barriers to licensed midwifery while improving safety for mothers and their babies. It authorizes a midwife to directly obtain supplies and devices, administer drugs and tests, and receive reports that are necessary to his/her practice of midwifery. Midwives must provide oral and written disclosure to prospective clients procedures that warrant consultation with a surgeon or physician. A violation of the act is a crime.

S.B. 161 – INSURANCE: Stop-Loss Coverage(D-Ed Hernandez-West Covina/24) – Prohibits California stop-loss insurers from issuing policies with specific deductibles below $35,000 (increasing to $40,000 in 2016), for groups with under 100 employees.  The ,legislation applies to policies issued on or after January 1, 2014.  It also prohibits aggregate attachment points less than the lesser of:  1) $5,000 times the total number of group members;  2) 120% of expected claims; or 3)  $35,000 (increasing to $40,000 in 2016).  The legislation also prohibits “lasering,” and it requires California stop-loss insurers to report to the California Department of Insurance — each April 1 — the number of small-employer stop-loss policies previously issued that were in effect as of December 31 of the prior year. The bill would make a stop-loss insurer in violation of these provisions subject to administrative penalties and would prohibit the act from affecting the ongoing operations of multiple employer welfare arrangements that provide health care benefits to their members on a self-funded or partially self-funded basis and that comply with small group health reforms.

S.B. 251 – INSURANCE: Electronic Notice (D-Ron Calderon-Montebello/30) – Existing law authorizes any written notice required to be given or mailed to any person by an insurer relating to any insurance on risks or on operations in this state, with exceptions, to be provided by electronic transmission if each party has agreed to conduct the transaction by electronic means, as provided. This bill,  until January 1, 2019, permits insurance companies to transmit notices electronically instead of by postal mail, with a customer’s consent. The bill would require the Insurance Commissioner to submit a report, on or before January 1, 2018, to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures, as specified.

TRANSLATIONS.B. 353 – COVERAGE: Language Assistance(D-Ted W. Lieu-Redondo Beach/28) – Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. A willful violation of the act is a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. This bill would require a health care service plan, as specified, that advertises or markets products in the individual or small group health care service plan markets, or that allows others to market or advertise on its behalf in those markets, in a non-English language, as provided, and that does not meet certain requirements, to translate into that language specified documents.

S.B. 494 – HEALTH CARE PROVIDERS(D-Bill Monning-San Luis Obispo/17) –  Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. This law would, until January 1, 2019, require a health care service plan to ensure that there is at least one full-time equivalent primary care physician for every 2,000 enrollees. This legislation would, until January 1, 2019, authorize the assignment of up to an additional 1,000 enrollees, as specified, to a primary care physician for each full-time equivalent non-physician medical practitioner, as defined, supervised by that physician. By imposing new requirements on health care service plans, the willful violation of which would be a crime, this bill would impose a state-mandated local program.

AFFORDABLE CARES.B. 639 – COVERAGE – (D-Ed Hernandez-West Covina/24) – This  bill conforms California law to the Affordable Care Act (ACA) requirements that limit annual deductibles and out-of-pocket limits for non-grandfathered insured health plans in the individual, small and large group market.  Any such policy that becomes effective or renews on or after January 1, 2014, must limit annual deductibles to $2,000 for individual coverage and $4,000 for families, and must limit annual out-of-pocket costs (for Essential Health Benefits) to $6,500 for individual coverage, and $12,700 for family coverage.  Two exceptions apply: 1) Small group products at the bronze level of coverage may have higher deductibles in order to meet Minimum Value (60% actuarial value); and 2) Pediatric dental care that meets the definition in the ACA may have an out-of-pocket maximum of $1,000 for one child and $2,000 for more than one child. The legislation also prohibits a plan or insurer from applying a separate out-of-pocket maximum to mental health or substance use disorder benefits.


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