Section 599.508 - Minimum Standards for Health Benefits Plans(a) To be qualified to be approved or adopted by the Board, a health benefits plan must:(1) Comply with the Public Employees' Medical and Hospital Care Act and this subchapter, as amended from time to time.(2) Accept enrollment, in accordance with this subchapter, without regard to physical condition, age, ethnic origin, religion or sex at the time of original group enrollment, of all eligible employees or annuitants, except that plans which are sponsored by employee organizations need not accept enrollment of persons who are not members of the organization.(3) Extend to all employees, annuitants and family members who are eligible therefor the right, during the time allowed, to convert to a contract for health benefits regularly offered by the carrier, or an appropriate affiliate, for group conversion purposes. Such contract must, at the option of the employee, annuitant or family member, be continued in effect by the carrier except for fraud or nonpayment of contractual charges. The contract shall, upon conversion, become effective as of the day following the date of termination of coverage, and the employee or annuitant shall pay the entire cost thereof directly to the carrier. The nongroup contract may not deny or delay any benefit that it provides for a person converting from a plan approved under this subchapter, except to the extent that benefits are continued under the health benefits plan from which he or she converts.
The Board may request an extension of time for conversion because of delayed determination of ineligibility for service retirement or disability retirement, in which case conversion must be permitted until the date specified by the Board in its request for extension.
Any such conversion contract may provide for an adjustment of benefits with respect to any covered person at such age as he or she becomes eligible to participate in benefits provided under either Part A or Part B of Title XVIII, Social Security Act.
(4)(A) Provide that any person, whether employee, annuitant, or family member, whose enrollment terminates other than by voluntary cancellation or termination of the group agreement, and who, on the day of termination is hospitalized, shall be granted a continuation of the benefits of the plan with respect to medical conditions that were present or preexisting at the time of hospitalization or occurred during the hospitalization and which require continued hospitalization, but not beyond the 91st day following the termination.(B) Provide that any person, whether employee, annuitant, or family member, whose enrollment has been changed from one plan to another and who on the effective date of such change is hospitalized, shall be granted a continuation of the benefits of the prior plan with respect to medical conditions that were present or pre-existing at the time of hospitalization or occurred during the hospitalization and which require continued hospitalization, but not beyond the 91st day following the last day of enrollment in the prior plan. Upon change of enrollment to the plan of a person so hospitalized on the effective date of the change, benefits with respect to the cause of such hospitalization shall not be paid or provided while that person is entitled to continuance of benefits under the prior plan, but all other benefits will be paid during such period.(C) Provide that any person whether employee, annuitant or family member who is totally disabled on the date of termination of the group contract, shall be granted a continuation of the benefits of the plan with respect to the cause of such total disability for up to 12 months after the date of termination, subject to plan maximums and provisions.(5) Provide that each employee and annuitant who enrolls in a plan receive evidence of enrollment in a form to be approved by the Board, summarizing the conditions of the plan including but not limited to, those concerning benefits, claims, and payment of claims.(6) Provide a standard rate structure which contains one standard individual rate, one standard rate for employees and annuitants with one dependent, and one standard rate for employees and annuitants with two or more dependents, without geographical or other variation. Notwithstanding the foregoing, and subject to the approval of the Board, a health benefits plan may charge contracting agency employees and annuitants rates that are based on regional variations in the costs of health care services.(7) Maintain statistical records regarding the plan as are agreed to by the Board, separately from those of any other activities or benefits conducted or offered by the carrier administering the plan, so as to reveal the utilization of benefits under the plan, the gross and net cost of such benefits, and the administrative cost experienced under the plan as it pertains to employees and annuitants enrolled under this subchapter.(8) Subject to the Board's authority to risk adjust health benefit plan premiums, and upon its approval to exercise this authority, participate in the risk adjustment methodology approved by the system. The system will select a risk adjustment methodology that is consistent with industry best practices and similar to those used by the United States Department of Health and Human Services and other state and federal agencies. The methodology will be provided at least 90 days prior to the public announcement of premiums for the next plan year. (A) The annual health benefit plan premiums adopted by the Board for each plan year may be risk adjusted utilizing the risk assessment method selected by the system.(B) Upon implementation of a risk adjustment methodology, the Board may phase in its resulting health benefit plan premium adjustments for up to three years if the adjustments result in at least one individual plan premium increase or decrease of at least ten percent.(C) The paragraph shall not apply to a Medicare health benefit plan, as defined in Section 22778 of the Government Code, or an employee association health benefit plan subject to Board approval pursuant to Section 22850 of the Government Code.(9) Provide that in the event an employee or annuitant is dissatisfied with the amount paid or service rendered pursuant to his or her claim on his or her behalf or on behalf of a family member and so requests, representatives of the parties including a representative of the Board will confer in an effort to reach a settlement, provided that no agreement reached by such conferees shall bind the employee, annuitant, or carrier without each party's consent or bar any remedy otherwise available.(b) To be qualified to be approved by the board, a health benefits plan must not: (1) Deny any covered person a benefit provided by the plan for a service rendered on or after the effective date of coverage solely because of a pre-existing physical or mental condition, or require a waiting period for any covered person for benefits which it provides, except as provided in Sections 599.510(c)(1) and (2).(2) Have an initiation, service, enrollment, or other fee or charge in addition to the rate charged for the plan, except that notwithstanding sub-paragraph (b)(1) of this section, comprehensive group practice prepayment plans and individual practice prepayment plans may impose an additional charge to be paid directly by the employee or annuitant for certain medical supplies and services, if the supplies and services on which additional charges are imposed are clearly set forth in advance and are applicable to all employees and annuitants. This subparagraph does not apply to charges for membership in employee organizations sponsoring plans.Cal. Code Regs. Tit. 2, § 599.508
1. Amendment of subsection (a)(2) filed 1-13-71; designated effective 4-1-71 (Register 71, No. 3). For prior history see Register 67, No. 43.
2. Amendment of subsection (a)(9) filed 12-2-75; effective thirtieth day thereafter (Register 75, No. 49).
3. Amendment of subsections (a)(1)-(a)(4), (a)(7) and (b)(1) filed 6-15-79; designated effective 8-1-79 (Register 79, No. 24).
4. Amendment filed 6-27-80; designated effective 8-1-80 (Register 80, No. 26).
5. Amendment of subsection (a) filed 6-9-86; effective thirtieth day thereafter (Register 86, No. 24).
6. Amendment of subsections (a)(2)-(3) filed 10-4-2001 as an emergency; operative 10-4-2001 (Register 2001, No. 40). A Certificate of Compliance must be transmitted to OAL by 2-1-2002 or emergency language will be repealed by operation of law on the following day.
7. Certificate of Compliance as to 10-4-2001 order transmitted to OAL 2-1-2002 and filed 3-18-2002 (Register 2002, No. 12).
8. Amendment of subsection (a)(7) and amendment of NOTE filed 4-15-2004 as an emergency; operative 4-15-2004 (Register 2004, No. 16). A Certificate of Compliance must be transmitted to OAL by 8-13-2004 or emergency language will be repealed by operation of law on the following day.
9. Certificate of Compliance as to 4-15-2004 order transmitted to OAL 6-25-2004 and filed 8-9-2004 (Register 2004, No. 33).
10. Change without regulatory effect amending NOTE filed 10-31-2006 pursuant to section 100, title 1, California Code of Regulations (Register 2006, No. 44).
11. Repealer of subsection (a)(3) and subsection renumbering filed 5-15-2013; operative 7-1-2013 (Register 2013, No. 20).
12. New subsections (a)(8)-(a)(8)(E), subsection renumbering and amendment of NOTE filed 7-24-2013; operative 7-24-2013 pursuant to Government Code section 11343.4(b)(3) (Register 2013, No. 30).
13. Editorial correction restoring inadvertently omitted subsection (b)(1) (Register 2014, No. 49).
14. Amendment of subsection (a)(8), repealer of subsections (a)(8)(A)-(E), new subsections (a)(8)(A)-(C), repealer of subsection (a)(9) and subsection renumbering filed 10-7-2021; operative 10-7-2021 pursuant to Government Code section 11343.4(b)(3) (Register 2021, No. 41). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20 and an additional 60 calendar days pursuant to Executive Order N-71-20. Note: Authority cited: Sections 22794, 22796, 22850, 22864 and 22911, Government Code. Reference: Sections 22796, 22850, 22864 and 22911, Government Code.
1. Amendment of subsection (a)(2) filed 1-13-71; designated effective 4-1-71 (Register 71, No. 3). For prior history see Register 67, No. 43.
2. Amendment of subsection (a)(9) filed 12-2-75; effective thirtieth day thereafter (Register 75, No. 49).
3. Amendment of subsections (a)(1)-(a)(4), (a)(7) and (b)(1) filed 6-15-79; designated effective 8-1-79 (Register 79, No. 24).
4. Amendment filed 6-27-80; designated effective 8-1-80 (Register 80, No. 26).
5. Amendment of subsection (a) filed 6-9-86; effective thirtieth day thereafter (Register 86, No. 24).
6. Amendment of subsections (a)(2)-(3) filed 10-4-2001 as an emergency; operative 10-4-2001 (Register 2001, No. 40). A Certificate of Compliance must be transmitted to OAL by 2-1-2002 or emergency language will be repealed by operation of law on the following day.
7. Certificate of Compliance as to 10-4-2001 order transmitted to OAL 2-1-2002 and filed 3-18-2002 (Register 2002, No. 12).
8. Amendment of subsection (a)(7) and amendment of Note filed 4-15-2004 as an emergency; operative 4-15-2004 (Register 2004, No. 16). A Certificate of Compliance must be transmitted to OAL by 8-13-2004 or emergency language will be repealed by operation of law on the following day.
9. Certificate of Compliance as to 4-15-2004 order transmitted to OAL 6-25-2004 and filed 8-9-2004 (Register 2004, No. 33).
10. Change without regulatory effect amending Note filed 10-31-2006 pursuant to section 100, title 1, California Code of Regulations (Register 2006, No. 44).
11. Repealer of subsection (a)(3) and subsection renumbering filed 5-15-2013; operative 7-1-2013 (Register 2013, No. 20).
12. New subsections (a)(8)-(a)(8)(E), subsection renumbering and amendment of Note filed 7-24-2013; operative 7-24-2013 pursuant to Government Code section 11343.4(b)(3) (Register 2013, No. 30).
13. Editorial correction restoring inadvertently omitted subsection (b)(1) (Register 2014, No. 49).