Stop-loss insurance coverage.

Existing law prohibits a person from transacting any class of insurance business, including health insurance, in this state without first being an admitted insurer. Under existing law, admission is secured by procuring a certificate of authority from the Insurance Commissioner. Existing law prohibits a health insurance policy from being issued or delivered to any person in this state unless specified requirements have been met, including that a copy of the form and premium rates are filed with the commissioner. Under existing law, if the commissioner notifies the health insurer that the filed form does not comply with specified requirements, it is unlawful for that health insurer to issue any health insurance policy in that form. Existing law, with respect to small employer health insurance, requires a carrier providing aggregate or specific stop-loss coverage or any other assumption of risk with reference to a health benefit plan, as defined, to provide that the plan meets specified requirements concerning preexisting condition provisions, waiting or affiliation periods, and late enrollees. Existing law, the federal Patient Protection and Affordable Care Act (PPACA) , commencing January 1, 2014, prohibits a group health plan and a health insurance issuer offering group or individual health insurance coverage from imposing any preexisting condition exclusion with respect to the plan or coverage. Existing law provides for self-funded or partially self-funded multiple employer welfare arrangements (MEWAs) and allows for MEWAs to apply for a certificate of compliance to do business in the state. This bill would require a stop-loss insurer, as defined, to offer coverage for all employees and dependents of a small employer to which it issues a stop-loss insurance policy and would prohibit the insurer from excluding any employee or dependent on the basis of actual or expected health status-related factors, as specified. Except as specified, the bill would require a stop-loss insurer to renew, at the option of the small employer, all stop-loss insurance policies. The bill would prohibit a stop-loss insurance policy issued on or after January 1, 2012, to a small employer from containing specified individual or aggregate attachment points, as defined, for a policy year or providing direct coverage, as defined, of an employee's health claims. The bill would make a stop-loss insurer in violation of these provisions subject to administrative penalties and would direct those fine and penalty moneys received to the General Fund to be available upon appropriation by the Legislature. The bill would, in addition, exempt the ongoing operation of MEWAs, as specified, and a stop-loss insurance policy issued to a small employer prior to January 1, 2012, or a policy that is subsequently renewed without decrease in the attachment point or other substantial amendments from the operation of these provisions.