Health care coverage: premium payments: grace periods.

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 provides for the regulation of disability insurers by the Department of Insurance and requires disability insurance policies to include a provision setting forth a grace period for making premium payments. Under existing law, that grace period must equal no less than 7 days for weekly premium policies, no less than 10 days for monthly premium policies, and no less than 31 days for all other policies. Existing law prohibits the Insurance Commissioner from approving a policy for issuance or delivery, and authorizes the commissioner to withdraw approval of the policy, if it fails to meet these requirements. This bill would require individual health care service plan contracts and individual health insurance policies issued, amended, or renewed on or after January 1, 2011, to provide a grace period of 50 days for the payment of premiums and would make an enrollee or insured who fails to pay the premium during that period liable for any medical costs incurred during the period, except as specified. The bill would require plans and insurers to provide specified notice of this grace period upon issuance, amendment, or renewal of an individual contract or policy. Because a willful violation of the bill's requirements with respect 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.