Health care coverage: solicitation.

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. Existing law regulates the solicitation of health care service plan products and health insurance. Existing law prohibits a plan or insurer from entering into an agreement with an agent, broker, or solicitor that provides for or results in the compensation paid to the agent, broker, or solicitor for the sale of a health care service plan contract or health insurance policy to a small employer or an individual to be varied because of specified characteristics of the small employer or individual. This bill would prohibit a plan or insurer from entering into an agreement with a solicitor, among others, that provides for or results in the compensation paid to the solicitor for the sale or offer of, or application for, an individual health care service plan contract or individual health insurance policy to be varied because of the health status, claims experience, industry, or occupation of the individual, but would authorize the plan or insurer to establish standardized or tiered compensation for a solicitor, as specified. The bill would also specify the compensation rate for a solicitor at the time of renewal of an individual contract or policy or transfer to another individual contract or policy with the same plan or insurer. The bill would require a plan or insurer, or person or entity representing a plan or insurer, at the time of an individual's application to change to a different individual health care service plan contract or individual health insurance policy, to notify the individual that application for a different contract or policy may result in an offer, an offer for a higher premium, or denial of coverage for that different contract or policy. Because a willful violation of the bill's requirements relative to health care service plans would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.