Health care coverage: employer associations.

(1) Existing law, the Knox-Keene Health Care Service Plan Act of 1975, requires the Department of Managed Health Care to license and regulate health care service plans and makes a willful violation of the act a crime. Existing law also requires the Department of Insurance to regulate health insurers. Existing law regulates individual, small employer, and large employer health care service plan contracts and health insurance policies, as defined. Existing federal law, the federal Employee Retirement Income Security Act of 1974 (ERISA) , authorizes multiple employer welfare arrangements (MEWAs) in which two or more employers join together to provide health care coverage for employees or to their beneficiaries. Under existing state law, the status of each distinct member of an association determines whether that member's association coverage is individual, small group, or large group health coverage. This bill would authorize an association of employers to offer a large group health care service plan contract or large group health insurance policy consistent with ERISA if certain requirements are met, including that the association is headquartered in this state, is a MEWA as defined under ERISA, and was established as a MEWA prior to March 23, 2010, and has been in continuous existence since that date. The bill would also require the large group health care service plan contract or health insurance policy to have provided a specified level of coverage as of January 1, 2019, and to include coverage for employees, and their dependents, who are employed in designated job categories on a project-by-project basis for one or more participating employers, with no single project exceeding 6 months in duration, and who, in the course of that employment, are not covered by another group health care service plan contract or group health insurance policy in which the employer participates. The bill would also require the MEWA and participating employers to have a genuine organizational relationship unrelated to the provision of health care benefits and would require the participating employers to have a commonality of interests from being in the same line of business, as specified. This bill would require the MEWA, on or before June 1, 2022, to file an application for registration with the Department of Managed Health Care or the Department of Insurance, as applicable, and to annually file evidence of ongoing compliance with the bill's requirements with the applicable department. The bill would prohibit a health care service plan or health insurer, on or after June 1, 2022, from marketing, issuing, amending, renewing, or delivering large employer health care coverage or large employer health insurance coverage to a MEWA that provides benefits to a resident in this state unless the MEWA is registered and is in compliance with the bill or unless the MEWA filed an application for registration and the application is pending before the applicable department. Because a violation of the bill by a health care service plan would be a crime, the bill would impose a state-mandated local program. (2) This bill would incorporate additional changes to Section 1357.503 of the Health and Safety Code and Section 10753.05 of the Insurance Code proposed by SB 326 and SB 718 to be operative only if this bill and SB 326, SB 718, or both are enacted and this bill is enacted last. (3) 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.