Group health care coverage: biomedical industry.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene) , 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 provides for the regulation of individual, small employer, grandfathered small employer, and nongrandfathered small 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 2 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. Existing law, until January 1, 2026, authorizes an association of employers to offer a large group health care service plan contract or large group health insurance policy to small group employer members of the association consistent with ERISA if certain requirements are met, including that the association is the sponsor of a MEWA that has offered a large group health care service plan contract since January 1, 2012, in connection with an employee welfare benefit plan under ERISA, provides a specified level of coverage, and includes coverage for common law employees, and their dependents, who are employed by an association member in the biomedical industry with operations in California. Existing law also requires an association and MEWA to annually file evidence of ongoing compliance with these requirements in a manner specified by the departments. This bill would require the departments, on or before June 30, 2026, to provide the health policy committees of the Legislature the most recent annual filings of compliance. The bill would require the Department of Managed Health Care to conduct an analysis of the impacts on the small employer health insurance market in California of health care service plans currently issuing large group contracts to small employers through MEWAs, as specified. The bill would require the Department of Insurance to conduct an analysis of the impacts on the small employer health insurance market in California of health insurers currently issuing large group policies to small employers through MEWAs, as specified. The bill would authorize the departments to coordinate with each other. The bill would require the departments to post reports summarizing their analysis on their internet websites by July 1, 2026. This bill would extend the sunset date of January 1, 2026, to January 1, 2030, for the authorization of this type of health care service plan and insurance policy. By extending the authorization for a specific type of health care service plan, this bill would correspondingly extend the applicability of the crime for a violation of Knox-Keene, thereby imposing 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.