CALIFORNIA INSURANCE CODE
SECTION 10110-10127.16
10110. Every person has an insurable interest in the life and
health of:
(a) Himself.
(b) Any person on whom he depends wholly or in part for education
or support.
(c) Any person under a legal obligation to him for the payment of
money or respecting property or services, of which death or illness
might delay or prevent the performance.
(d) Any person upon whose life any estate or interest vested in
him depends.
10110.1. (a) An insurable interest, with reference to life and
disability insurance, is an interest based upon a reasonable
expectation of pecuniary advantage through the continued life,
health, or bodily safety of another person and consequent loss by
reason of that person's death or disability or a substantial interest
engendered by love and affection in the case of individuals closely
related by blood or law.
(b) An individual has an unlimited insurable interest in his or
her own life, health, and bodily safety and may lawfully take out a
policy of insurance on his or her own life, health, or bodily safety
and have the policy made payable to whomsoever he or she pleases,
regardless of whether the beneficiary designated has an insurable
interest.
(c) Except as provided in Section 10110.4, an employer has an
insurable interest, as referred to in subdivision (a), in the life or
physical or mental ability of any of its directors, officers, or
employees or the directors, officers, or employees of any of its
subsidiaries or any other person whose death or physical or mental
disability might cause financial loss to the employer; or, pursuant
to any contractual arrangement with any shareholder concerning the
reacquisition of shares owned by the shareholder at the time of his
or her death or disability, on the life or physical or mental ability
of that shareholder for the purpose of carrying out the contractual
arrangement; or, pursuant to any contract obligating the employer as
part of compensation arrangements or pursuant to a contract
obligating the employer as guarantor or surety, on the life of the
principal obligor. The trustee of an employer or trustee of a
pension, welfare benefit plan, or trust established by an employer
providing life, health, disability, retirement, or similar benefits
to employees and retired employees of the employer or its affiliates
and acting in a fiduciary capacity with respect to those employees,
retired employees, or their dependents or beneficiaries has an
insurable interest in the lives of employees and retired employees
for whom those benefits are to be provided. The employer shall
obtain the written consent of the individual being insured.
(d) An insurable interest shall be required to exist at the time
the contract of life or disability insurance becomes effective, but
need not exist at the time the loss occurs.
(e) Any contract of life or disability insurance procured or
caused to be procured upon another individual is void unless the
person applying for the insurance has an insurable interest in the
individual insured at the time of the application.
(f) Notwithstanding subdivisions (a), (d), and (e), a charitable
organization that meets the requirements of Section 214 or 23701d of
the Revenue and Taxation Code may effectuate life or disability
insurance on an insured who consents to the issuance of that
insurance.
(g) This section shall not be interpreted to define all instances
in which an insurable interest exists.
10110.2. An insurer shall be entitled to rely upon all statements,
declarations, and representations made by an applicant for insurance
relative to the insurable interest that the applicant has in the
insured, and no insurer shall incur any legal liability except as set
forth in the policy, by virtue of any untrue statements,
declarations, or representations so relied upon in good faith by the
insurer.
10110.3. (a) An insurer may not issue an individual life insurance
policy to an applicant that insures the life of the applicant's
spouse unless the applicant's spouse has signed the policy
application or has otherwise been notified in advance of the issuance
of the policy.
(b) This section shall apply to policies of individual life
insurance with face amounts exceeding fifty thousand dollars
($50,000) that are issued on or after July 1, 2004.
10110.4. (a) Except as allowed in subdivision (c), an insurer may
not issue or deliver a corporate-owned life insurance policy.
(b) "Corporate-owned life insurance policy" means a life insurance
policy that is purchased by a California employer, that designates
the employer as the beneficiary of the policy, and that insures the
life of a California resident who is a current or former employee of
the employer.
(c) This section does not apply to a policy insuring the life of a
current or former exempt employee. An exempt employee is an
administrative, executive, or professional employee who is exempt
under Section 515 of the Labor Code and the regulations adopted
pursuant thereto.
(d) Except as provided in subdivision (f), it is a violation of
public policy for a California employer to purchase or hold a
corporate-owned life insurance policy.
(e) (1) A corporate-owned life insurance policy purchased on or
after the effective date of this section is void.
(2) Except as provided in subdivision (f), a corporate-owned life
insurance policy purchased prior to the effective date of this
section shall become void on the next premium payment date on or
after the date five years from the effective date of this section,
but no later than January 1, 2010.
(f) A corporate-owned life insurance policy purchased prior to the
effective date of this section that insures the life of a current or
former nonexempt employee shall continue in force after the
effective date of this section provided that no further premium
payments are made after the effective date of this section. However,
an employer who has purchased and holds such a corporate-owned life
insurance policy shall disclose in writing to the current or former
nonexempt employee whose life is insured by the policy, within 90
days of the effective date of this section, all of the following
information:
(1) The existence of the corporate-owned life insurance policy on
the life of the nonexempt employee.
(2) The identity of the insurer under the policy.
(3) The benefit amount under the policy, unless the full amount of
the benefit is used to defray the costs of nonexempt employee
benefits.
(4) How benefits paid under the policy would be used.
(5) The name of the beneficiary under the policy.
(g) For a former employee, the disclosure requirements shall be
deemed satisfied if the employer mails the required information to
the former employee's last known address.
10111. In life or disability insurance, the only measure of
liability and damage is the sum or sums payable in the manner and at
the times as provided in the policy to the person entitled thereto.
10111.2. (a) Under a policy of disability income insurance, as
defined in subdivision (i) of Section 799.01, payment of benefits to
the insured shall be made within 30 calendar days after the insurer
has received all information needed to determine liability for a
claim. However, the 30-calendar-day period shall not include any
time during which the insurer is doing any of the following:
(1) Awaiting a response for relevant medical information from a
health care provider.
(2) Awaiting a response from the claimant to a request for
additional relevant information.
(3) Investigating possible fraud that has been reported to the
department's Fraud Division in compliance with subdivision (a) of
Section 1872.4.
(b) If the insurer has not received all information needed to
determine liability for a claim within 30 calendar days after receipt
of the claim, the insurer shall notify the insured in writing and
include a written list of all information it reasonably needs to
determine liability for the claim. In that event, the
30-calendar-day period set out in subdivision (a) shall commence when
the insured has provided to the insurer all information in that
notification. If no notice is sent by the insurer within 30 calendar
days after the claim is filed by the insured, interest shall begin
to accrue on the payment of benefits on the 31st calendar day after
receipt of the claim, at the rate of 10 percent per year.
(c) When the insurer has received all information needed to
determine liability for a claim, and the insurer determines that
liability exists and fails to make payment of benefits to the insured
within 30 calendar days after the insurer has received that
information, any delayed payment shall bear interest, beginning the
31st calendar day, at the rate of 10 percent per year. Liability
shall, in all cases, be determined by the insurer within 30 calendar
days of receiving all information set out in the insurer's written
notification to the insured.
(d) Nothing in this section is intended to restrict any other
remedies available to an insured by statute or any other law.
10111.5. An insurer shall not be liable for payments claimed under
an individual or group policy of life insurance if the duty to make
those payments depends upon a factual determination of whether the
death of the insured was an accident or a suicide and that fact
cannot be established without an autopsy and the autopsy is
prohibited under Section 27491.43 of the Government Code. Insurers
refusing or delaying payments in those circumstances in good faith
shall not be liable for exemplary or punitive damages.
10112. Subject to Section 2459 of the Probate Code, in respect to
life or disability insurance, or annuity contracts (except as
provided in Sections 2500 to 2507, inclusive, of the Probate Code and
Section 3500 of the Probate Code and Chapter 4 (commencing with
Section 3600) of Part 8 of Division 4 of the Probate Code),
heretofore or hereafter issued to or upon the life of any person not
of the full age of 18 years for the benefit of such minor or for the
benefit of the father, mother, husband, wife, child, brother, or
sister, of such minor, or issued to such minor, subject to written
consent of a parent or guardian, upon the life of any person in whom
such minor has an insurable interest for the benefit of himself or
such minor's father, mother, husband, wife, child, brother or sister,
such minor shall not, by reason only of such minority, be deemed
incompetent to contract for such insurance or annuity, or for the
surrender thereof, or to exercise all contractual rights thereunder,
or, subject to approval of a parent or guardian, to give a valid
discharge for any benefit accruing or for any money payable
thereunder; provided, that all such contracts made by a minor under
the age of 16 years, as determined by the nearest birthday, shall
have the written consent of a parent or guardian, and that the
exercise of all contractual rights under such contracts, or the
surrender thereof, or the giving of a valid discharge for any benefit
accruing or money payable thereunder, in the case of a minor under
the age of 16 years, as determined by the nearest birthday, shall
have the written consent of a parent or guardian.
All such contracts made by a minor not of the full age of 18 years
which may result in any personal liability for assessment shall have
the written assumption of any such liability by a parent or guardian
in consideration of the issuance of the contract. Such assumption
shall be in a form approved by the commissioner, reasonably designed
to inform the parent or guardian of the liability thus assumed.
Such assumption of liability may be made a part of and included
with any written consent of such parent or guardian required under
other provisions of this section and it may be provided therein that
such assumption shall cover only up to the anniversary date of the
policy nearest to the member's birthday at which he or she attains
age 18.
10112.5. (a) Notwithstanding any other provision of law, every
policy or certificate of disability insurance covering hospital,
medical, or surgical expenses marketed, issued, or delivered to a
resident of this state, regardless of the situs of the contract or
master group policyholder, shall be subject to all provisions of this
code.
(b) Subdivision (a) shall not apply to a policy of disability
insurance that covers hospital, medical, or surgical expenses and
that is issued outside of California to an employer whose principle
place of business and majority of employees are located outside of
California.
(c) Nothing in subdivision (b) shall be construed to limit the
applicability of any other provision of this code to any policy of
disability insurance that covers hospital, medical, or surgical
expenses and that is issued outside of California to an employer
whose principle place of business and majority of employees are
located outside of California.
10113. Every policy of life, disability, or life and disability
insurance issued or delivered within this State on or after the first
day of January, 1936, by any insurer doing such business within this
State shall contain and be deemed to constitute the entire contract
between the parties and nothing shall be incorporated therein by
reference to any constitution, by-laws, rules, application or other
writings, of either of the parties thereto or of any other person,
unless the same are indorsed upon or attached to the policy; and all
statements purporting to be made by the insured shall, in the absence
of fraud, be representations and not warranties. Any waiver of the
provisions of this section shall be void.
10113.1. (a) (1) As used in this section, a "viatical settlement"
means an agreement entered into between a person owning a life
insurance policy upon the life of a person with a catastrophic or
life-threatening illness or condition and another person by which the
policy owner receives compensation or anything of value less than
the death benefits of the insurance policy in return for an
assignment, transfer, sale, devise, or bequest of the death benefits
or ownership of the insurance policy, but does not include an
assignment of a life insurance policy to a licensed lending
institution or credit union as collateral for a loan.
(2) As used in this section, "person" means any natural person or
legal entity including, but not limited to, individuals,
partnerships, associations, trusts, or corporations including a
resident or nonresident life and disability insurance agent licensed
by the commissioner.
The life and disability insurance agents shall file with the
commissioner a declaration that the person's life and disability
agent license is valid and in good standing. The life and disability
insurance agent shall provide copies of all endorsements and
appointments received by the agent to engage in the business of
viatical settlements. If the commissioner determines that the agent'
s life and disability agent license is invalid or not in good
standing, or the agent has failed to submit any fees or proper
endorsements or appointments, the commissioner may suspend the agent'
s ability to transact or otherwise be involved in viatical
settlements.
(b) A viatical settlement shall not include a provision for
payment of cash surrender values, loans or other benefits made by an
insurer in accordance with the policy provisions.
(c) Any person entering into a viatical settlement with any person
with a catastrophic or life-threatening illness or condition shall
first obtain the following:
(1) A written statement from a licensed medical practitioner
attending the person that the person is of sound mind and under no
constraint or undue influence.
(2) A duly witnessed signed document in which the person consents
to the viatical settlement, acknowledges the catastrophic or
life-threatening illness, represents that he or she has a full and
complete understanding of the viatical settlement, that he or she has
a full and complete understanding of the benefits of the life
insurance policy, a release of his or her medical records, and
acknowledges that he or she has entered into the settlement freely
and voluntarily.
(d) No person domiciled, residing or conducting business in
California may do any of the following unless he or she has complied
with subdivision (c):
(1) Enter into a viatical settlement with any person, domiciled or
residing in California.
(2) Execute a viatical settlement in whole or in part in this
state.
(e) A violation of this section is a misdemeanor.
10113.2. (a) This section applies to any person entering into or
soliciting viatical settlements pursuant to Section 10113.1.
(b) (1) No person may enter into or solicit viatical settlements
pursuant to Section 10113.1 unless that person has been licensed by
the commissioner under this section. The person shall file an
application for a license in the form prescribed by the commissioner,
and the application shall be accompanied by a fee of two thousand
eight hundred thirty-three dollars ($2,833). The applicant shall
provide any information the commissioner may require. The
commissioner may issue a license, or deny the application if, in his
or her discretion, it is determined that it is contrary to the
interests of the public to issue a license to the applicant. The
reasons for a denial shall be set forth in writing.
(2) Whenever it appears to the commissioner that it is contrary to
the interests of the public for a person licensed pursuant to this
section to continue to transact viatical settlements business, he or
she shall issue a notice to the licensee stating the reasons
therefor. If, after a hearing, the commissioner concludes that it is
contrary to the interests of the public for the licensee to continue
to transact viatical settlements business, he or she may revoke the
person's license, or issue an order suspending the license for a
period as determined by the commissioner. Any hearing conducted
pursuant to this paragraph shall be in accordance with Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code, except that the hearing may be conducted by
administrative law judges chosen pursuant to Section 11502 or
appointed by the commissioner, and the commissioner shall have the
powers granted therein.
(3) Each licensee shall owe and pay in advance to the commissioner
an annual renewal fee of one hundred seventy-seven dollars ($177).
This fee shall be for annual periods commencing on July 1 of each
year and ending on June 30 of each year, and shall be due on each
March 1 and shall be delinquent on and after each April 1.
(4) Any licensee that intends to discontinue transacting viatical
settlements in this state shall so notify the commissioner, and shall
surrender its license.
(c) A viatical settlements licensee shall file with the department
a copy of all viatical settlement forms used in this state. No
licensee may use any viatical settlement form in this state unless it
has been approved by the commissioner. Any viatical settlement form
filed with the commissioner shall be deemed approved if it has not
been disapproved within 60 days of filing. The commissioner shall
disapprove a viatical settlement form if, in his or her discretion,
the form, or provisions contained therein, are contrary to the
interests of the public, or otherwise misleading or unfair to the
consumer. The commissioner may rescind an approval for any reason or
on any basis that would have justified initial disapproval. In the
case of disapproval or rescission of approval, the licensee may,
within 15 days of notice of the disapproval or rescission, request a
hearing before the commissioner or his or her designee, and the
hearing shall be held within 30 days of the request.
(d) Viatical settlements licensees shall be required to disclose
or advise any applicant for a viatical settlement, at the time of
solicitation for the viatical settlement, of all of the following:
(1) Possible alternatives to viatical settlements for persons with
catastrophic or life-threatening illness, including, but not limited
to, accelerated benefits options that may be offered by the life
insurer.
(2) Tax consequences that may result from entering into a viatical
settlement.
(3) Consequences for interruption of public assistance as provided
by information provided by the State Department of Health Services
and the State Department of Social Services under Section 11022 of
the Welfare and Institutions Code.
(e) All medical information solicited or obtained by any person
soliciting or entering into a viatical settlement is subject to
Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of
Division 1, concerning confidentiality of medical information.
(f) The commissioner may adopt rules and regulations reasonably
necessary to govern viatical settlements and transactions and shall
adopt regulations to address those conflicts of interest that may
arise, including referrals by viatical settlement brokers to viatical
settlement providers who have patterns of unreasonable payments to
viators. This authority includes, but is not limited to, regulation
of discount rates used to determine the amount paid in exchange for
assignment, transfer, sale, devise, or bequest of a death benefit
under a life insurance policy, and regulations restricting the period
of time within which a life or disability agent is prohibited from
charging or accepting a fee or commission for viaticating a policy
previously sold by that agent. In adopting those regulations, the
commissioner shall consider the period of time applicable to that
prohibition. The prohibition does not apply to group policies or
certificates.
(g) The commissioner may, whenever he or she deems it reasonably
necessary to protect the interests of the public, examine the
business and affairs of any licensee or applicant for a license. The
commissioner shall have the authority to order any licensee or
applicant to produce any records, books, files, or other information
as is reasonably necessary to ascertain whether or not the licensee
or applicant is acting or has acted in violation of the law or
otherwise contrary to the interests of the public. The expenses
incurred in conducting any examination shall be paid by the licensee
or applicant.
(h) The commissioner may investigate the conduct of any licensee,
its officers, employees, agents, or any other person involved in the
business of the licensee, whenever the commissioner has reason to
believe that the licensee may have acted, or may be acting, in
violation of the law, or otherwise contrary to the interests of the
public. The commissioner may initiate an investigation on his or her
own, or upon a complaint filed by any other person.
(i) The commissioner may issue orders to licensees whenever he or
she determines that it is reasonably necessary to ensure or obtain
compliance with this section, or Section 10113.1. This authority
includes, but is not limited to, orders directing a licensee to cease
and desist in any practice that is in violation of this section, or
Section 10113.1, or otherwise contrary to the interests of the
public. Any licensee to which an order pursuant to this subdivision
is issued may, within 15 days of receipt of that order, request a
hearing at which the licensee may challenge the order.
(j) The commissioner may, after notice and a hearing at which it
is determined that a licensee has violated this section or Section
10113.1 or any order issued pursuant to this section, order the
licensee to pay a monetary penalty of up to ten thousand dollars
($10,000), which may be recovered in a civil action. Any hearing
conducted pursuant to this subdivision shall be in accordance with
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code, except that the hearing may be
conducted by administrative law judges chosen pursuant to Section
11502 or appointed by the commissioner, and the commissioner shall
have the powers granted therein.
(k) Each licensee shall file with the commissioner on or before
March 1 of each year an annual statement in the form prescribed by
the commissioner. The information that the commissioner may require
in the annual statement shall include, but not be limited to, the
data required to satisfy the commissioner's report to the Legislature
due on or before December 1, 1994.
(l) No person who is not a resident of California may receive or
maintain a license unless a written designation of an agent for
service or process is filed and maintained with the commissioner.
The provisions of Article 3 (commencing with Section 1600) of Chapter
4 of Part 2 shall apply to viatical settlements licensees as if they
were foreign insurers, their license a certificate of authority, and
the viatical settlements a policy, and the commissioner may modify
the agreement set forth in Section 1604 accordingly.
(m) No person licensed pursuant to this section shall engage in
any false or misleading advertising, solicitation, or practice. The
provisions of Article 6 (commencing with Section 780) and Article 6.5
(commencing with Section 790) of Chapter 1 of Part 2 shall apply to
viatical settlements licensees as if they were insurers, their
license a certificate of authority or producer's license, and the
viatical settlements a policy, and the commissioner shall liberally
construe these provisions so as to protect the interests of the
public.
(n) Any person who enters into a viatical settlement with a
viatical settlements licensee shall have the absolute right to
rescind the settlement within 15 days of execution of the settlement,
and any waiver or settlement language contrary to this subdivision
shall be void.
(o) A violation of this section is a misdemeanor.
10113.4. If a group life insurance policy contains a provision that
makes a certificate holder's coverage contestable on the grounds of
suicide for a period following commencement of coverage, only the
unexpired portion of that period shall be applied to a certificate
holder's individual conversion policy of an equal or lesser amount of
coverage.
10113.5. (a) An individual life insurance policy delivered or
issued for delivery in this state shall contain a provision that it
is incontestable after it has been in force, during the lifetime of
the insured, for a period of not more than two years after its date
of issue, except for nonpayment of premiums and except for any of the
supplemental benefits described in Section 10271, to the extent that
the contestability of those benefits is otherwise set forth in the
policy or contract supplemental thereto. An individual life
insurance policy, upon reinstatement, may be contested on account of
fraud or misrepresentation of facts material to the reinstatement
only for the same period following reinstatement, and with the same
conditions and exceptions, as the policy provides with respect to
contestability after original issuance.
(b) (1) Notwithstanding subdivision (a), if photographic
identification is presented during the application process, and if an
impostor is substituted for a named insured in any part of the
application process, with or without the knowledge of the named
insured, then no contract between the insurer and the named insured
is formed, and any purported insurance contract is void from its
inception.
(2) As used in this subdivision:
(A) "Application process" means any or all of the steps required
of a named insured in applying for a certificate under an individual
policy of life insurance, including, but not limited to, executing
any part of the application form, submitting to medical or physical
examination or testing, or providing a sample or specimen of blood,
urine, or other bodily substance.
(B) "Impostor" means a person other than the named insured who
participates in any manner in the application process for a
certificate under an individual life insurance policy and represents
himself or herself to be the named insured or represents that a
sample or specimen of blood, urine, or other bodily substance is that
of the named insured.
(C) "Named insured" means the individual named in an application
form for a certificate under an individual life insurance policy as
the person whose life is to be insured.
(c) This section shall not be construed to preclude at any time
the assertion of defenses based upon policy provisions that exclude
or restrict coverage.
(d) This section shall not apply to individual life insurance
policies delivered or issued for delivery in this state on or before
December 31, 1973.
10113.6. (a) An insurer that is required to deliver a life
insurance policy to the owner of the policy in order to start the
period running during which the owner may exercise any statutory
right to return a policy for cancellation, shall accomplish the
delivery by:
(1) Registered or certified mail.
(2) Personal delivery, with a signed, written receipt of delivery.
(3) First-class mail, with a signed, written receipt of delivery.
(4) Other reasonable means, as determined by the commissioner.
(b) If an insurer does not deliver a policy by the means set forth
in subdivision (a), the burden of proof shall be on the insurer to
establish that the policy was delivered, in the event of a dispute
with the owner of the policy.
(c) Notwithstanding subdivisions (a) and (b), a policy shall be
deemed to have been received six months after the date of issuance if
premiums have been paid.
(d) An employer or corporate policy owner, or the plan trustee of
an employer or corporate policy owner who controls 100 or more
policies, shall have the option to request in writing from an insurer
the delivery of a sample policy with one or more census pages in a
form satisfactory to the employer, corporate policy owner, or plan
trustee, as an alternative to the delivery requirements of
subdivision (a). However, delivery of the sample policy and census
page as provided in this subdivision shall be subject to the
provisions of subdivisions (a) and (b). The insurer shall deliver
all of the policies listed on the census page to the employer,
corporate policy owner, or plan trustee within 30 days of demand for
delivery. The delivery of the actual policies shall not institute a
new "free look" period.
10113.7. (a) An increase of premium on an individual life insurance
policy that provides for premium changes by the insurer is not
effective unless written notice is delivered to the policyholder, or
mailed to his or her last known address as shown by the records of
the insurer, not less than 20 days prior to the effective date of the
increase. If the notice is sent with or contained as part of an
ordinary premium or renewal invoice or payment request, the notice of
increase shall be prominently displayed and stated separately from
the ordinary statement of the amount due.
(b) This section shall not apply to premium increases resulting
directly from changes in coverage requested by the policyholder, or
when the insurer has previously disclosed, in writing, either at the
time the policy was issued or during the life of the contract, a
specific date of change of premium, and the new premium amount.
(c) Nothing in this section shall be construed to limit
application of any other provision of law, nor shall it be construed
to prevent application of any contractual provision affording greater
rights to the policyholder.
10113.8. (a) Each health insurer that maintains an Internet Web
site shall make a downloadable copy of the comparative benefit matrix
prepared pursuant to Section 10127.14 available through its site and
ensure that the most current update of the matrix is available on
its site.
(b) Each health insurer shall send copies of the comparative
benefit matrix on an annual basis, or more frequently as the matrix
is updated by the department and the Department of Managed Health
Care, to solicitors and solicitor firms and employers with whom it
contracts. Each health insurer shall require its representatives and
the solicitors and soliciting firms with which it contracts, to
provide a copy of the comparative benefit matrix to individuals when
presenting any benefit package for examination or sale.
(c) This section shall not apply to accident-only, specified
disease, hospital indemnity, CHAMPUS supplement, long-term care,
Medicare supplement, dental-only, or vision-only insurance policies.
10114. Before an insurer may pay the proceeds of any contract of
life or disability insurance to any undertaker or funeral director,
as beneficiary or assignee, for funeral services, it shall require
proof satisfactory to it that the services have been rendered. If
proof of rendition of services is not furnished within thirty days
after demand is made upon an insurer for such payment and in any
event within one year from the date of the insured's death, the
insurer shall pay the proceeds of such insurance to any contingent or
other beneficiary designated in the policy, and if no contingent or
other beneficiary is so designated, to the estate of the insured or
to any person, other than to such undertaker or funeral director,
equitably entitled to all or any portion of the proceeds by reason of
having incurred expense or furnished funeral services for the
insured, to the extent of the expense incurred or services furnished.
10115. When a payment is made equal to the full first premium at
the time an application for life insurance other than group life
insurance is signed by the applicant and either (1) the applicant
received at that time a receipt for said payment on a form prepared
by the insurer, or (2) in the absence of such a receipt the insurer
receives the said payment at its home office, branch office, or the
office of one of its general agencies, and in either case the
insurer, pursuant to its regular underwriting practices and
standards, approves the application for the issuance by it of a
policy of life insurance on the plan and for the class of risk and
amount of insurance applied for, and the person to be insured dies on
or after the date of the application, on or after the date of the
medical examination, if any, or on or after any date specially
requested in the application for the policy to take effect, whichever
is later, but before such policy is issued and delivered, the
insurer shall pay such amount as would have been due under the terms
of the policy in the same manner and subject to the same rights,
conditions and defenses as if such policy had been issued and
delivered on the date the application was signed by the applicant.
The provisions of this section shall not prohibit an insurer from
limiting the maximum amount for which it may be liable prior to
actual issuance and delivery of the policy of life insurance either
to (1) an amount not less than its established maximum retention, or
to (2) fifty thousand dollars ($50,000), if a statement to this
effect is included in the application.
10116. No group life insurance policy or disability insurance
policy shall be issued or delivered in this State where the premiums
or any part thereof is paid or is to be paid in whole or in part by
an employer pursuant to the terms of a collective bargaining
agreement unless the policy provides that in the event of a cessation
of work by the employees covered by the policy as the result of a
labor dispute the policy, upon timely payment of the premium, shall
continue in effect with respect to all employees insured by the
policy on the date of the cessation of work who continue to pay their
individual contribution, and who assume and pay the contribution due
from the employer, for the period of cessation of work, under the
following conditions:
(a) If the policyholder is not a trustee or the trustees of a fund
established or maintained in whole or in part by the employer, the
policy shall provide that the employee's individual contribution
shall be the rate in the policy, on the date cessation of work
occurs, applicable to an individual in the class to which the
employee belongs as set forth in the policy. If the policy does not
provide for a rate applicable to individuals, the policy shall
provide that the employee's individual contribution shall be an
amount equal to the amount determined by dividing (1) the total
monthly premium in effect under the policy at the date of cessation
of work by (2) the total number of persons insured under the policy
at such date.
(b) If the policyholder is a trustee or the trustees of a fund
established or maintained in whole or in part by the employer, the
employee's contribution shall be the amount which he and his employer
would have been required to contribute to the trust for such
employee if (1) the cessation of work had not occurred and (2) the
agreement requiring the employer to make contributions to the trust
were in full force.
(c) The policy may provide that the continuation of insurance is
contingent upon the collection of individual contributions by the
union or unions representing the employees for policies referred to
in subdivision (a) above, and by the policyholder or the policyholder'
s agent with respect to policies referred to in subdivision (b)
above.
(d) The policy may provide that the continuation of insurance on
each employee is contingent upon timely payment of contributions by
the individual and timely payment of the premium by the entity
responsible for collecting the individual contributions.
(e) The policy may provide that each individual premium rate shall
be increased by any amount up to twenty percent (20%), or any higher
percent which may be approved by the commissioner, of that otherwise
shown in the policy during the period of cessation of work in order
to provide sufficient compensation to the insurer to cover increased
administrative costs and increased mortality and morbidity. If the
policy does provide for such an increase, this shall have the effect
of increasing the employee's contribution by a like percent.
(f) Nothing in this section shall be deemed to limit any right
which the insurer may have in accordance with the terms of the policy
to increase or decrease the premium rates before, during or after
such cessation of work if, in fact, the insurer would have had the
right to increase the premium rate had the cessation of work not
occurred. If such a premium rate change is made, it shall be
effective, notwithstanding any other provisions of this section, on
such date as the insurer shall determine in accordance with the terms
of the policy.
(g) The policy may contain such other provisions with respect to
such continuation of insurance as the commissioner may approve.
(h) The policy may provide that, if a premium is unpaid at the
date of cessation of work and such premium became due prior to such
cessation of work, the continuation of insurance is contingent upon
payment of such premium prior to the date the next premium becomes
due under the terms of the policy.
Nothing herein shall be deemed to require the continuation of any
loss of time payments included in any such group disability policy,
nor of any other coverages beyond the time that seventy-five percent
(75%) of the employees continue such coverage or as to any individual
employee beyond the time that he takes full-time employment with
another employer; nor shall anything herein be deemed to require
continuation of coverage more than six (6) months after the cessation
of work.
Nothing in this section shall be construed as modifying or in any
way affecting the operation and effect of the provisions of Part 2 of
Division 1 of the Unemployment Insurance Code.
10116.5. (a) Every policy of disability insurance that is issued,
amended, delivered, or renewed in this state on or after January 1,
1999, that provides hospital, medical, or surgical expense coverage
under an employer-sponsored group plan for an employer subject to
COBRA, as defined in subdivision (e), or an employer group for which
the disability insurer is required to offer Cal-COBRA coverage, as
defined in subdivision (f), including a carrier providing replacement
coverage under Section 10128.3, shall further offer the former
employee the opportunity to continue benefits as required under
subdivision (b), and shall further offer the former spouse of an
employee or former employee the opportunity to continue benefits as
required under subdivision (c).
(b) (1) If a former employee worked for the employer for at least
five years prior to the date of termination of employment and is 60
years of age or older on the date employment ends is entitled to and
so elects to continue benefits under COBRA or Cal-COBRA for himself
or herself and for any spouse, the employee or spouse may further
continue benefits beyond the date coverage under COBRA or Cal-COBRA
ends, as set forth in paragraph (2). Except as otherwise specified
in this section, continuation coverage shall be under the same
benefit terms and conditions as if the continuation coverage under
COBRA or Cal-COBRA had remained in force. For the employee or
spouse, continuation coverage following the end of COBRA or Cal-COBRA
is subject to payment of premiums to the insurer. Individuals
ineligible for COBRA or Cal-COBRA or who are eligible but have not
elected or exhausted continuation coverage under federal COBRA or
Cal-COBRA are not entitled to continuation coverage under this
section. Premiums for continuation coverage under this section shall
be billed by, and remitted to, the insurer in accordance with
subdivision (d). Failure to pay the requisite premiums may result in
termination of the continuation coverage in accordance with the
applicable provisions in the insurer's group contract with the former
employer.
(2) The former employer shall notify the former employee or spouse
or both, or the former spouse of the employee or former employee, of
the availability of the continuation benefits under this section in
accordance with Section 2800.2 of the Labor Code. To continue health
care coverage pursuant to this section, the individual shall elect
to do so by notifying the insurer in writing within 30 calendar days
prior to the date continuation coverage under COBRA or Cal-COBRA is
scheduled to end. Every disability insurer shall provide to the
employer replacing a group benefit plan policy issued by the insurer,
or to the employer's agent or broker representative, within 15 days
of any written request, information in possession of the insurer
reasonably required to administer the requirements of Section 2800.2
of the Labor Code.
(3) The continuation coverage shall end automatically on the
earlier of (A) the date the individual reaches age 65, (B) the date
the individual is covered under any group health plan not maintained
by the employer or any other insurer or health care service plan,
regardless of whether that coverage is less valuable, (C) the date
the individual becomes entitled to Medicare under Title XVIII of the
Social Security Act, (D) for a spouse, five years from the date on
which continuation coverage under COBRA or Cal-COBRA was scheduled to
end for the spouse, or (E) the date on which the former employer
terminates its group contract with the insurer and ceases to provide
coverage for any active employees through that insurer, in which case
the insurer shall notify the former employee or spouse, or both, of
the right to a conversion policy.
(c) (1) If a former spouse of an employee or former employee was
covered as a qualified beneficiary under COBRA or Cal-COBRA, the
former spouse may further continue benefits beyond the date coverage
under COBRA or Cal-COBRA ends, as set forth in paragraph (2) of
subdivision (b). Except as otherwise specified in this section,
continuation coverage shall be under the same benefit terms and
conditions as if the continuation coverage under COBRA or Cal-COBRA
had remained in force. Continuation coverage following the end of
COBRA or Cal-COBRA is subject to payment of premiums to the insurer.
Premiums for continuation coverage under this section shall be
billed by, and remitted to, the insurer in accordance with
subdivision (d). Failure to pay the requisite premiums may result in
termination of the continuation coverage in accordance with the
applicable provisions in the insurer's group contract with the
employer or former employer.
(2) The continuation coverage for the former spouse shall end
automatically on the earlier of (A) the date the individual reaches
65 years of age, (B) the date the individual is covered under any
group health plan not maintained by the employer or any other health
care service plan or insurer, regardless of whether that coverage is
less valuable, (C) the date the individual becomes entitled to
Medicare under Title XVIII of the Social Security Act, (D) five years
from the date on which continuation coverage under COBRA or
Cal-COBRA was scheduled to end for the former spouse, or (E) the date
on which the employer or former employer terminates its group
contract with the insurer and ceases to provide coverage for any
active employees through that insurer, in which case the insurer
shall notify the former spouse of the right to a conversion policy.
(d) (1) If the premium charged to the employer for a specific
employee or dependent eligible under this section is adjusted for the
age of the specific employee, or eligible dependent, on other than a
composite basis, the rate for continuation coverage under this
section shall not exceed 102 percent of the premium charged by the
insurer to the employer for an employee of the same age as the former
employee electing continuation coverage in the case of an individual
who was eligible for COBRA, and 110 percent in the case of an
individual who was eligible for Cal-COBRA. If the coverage continued
is that of a former spouse, the premium charged shall not exceed 102
percent of the premium charged by the plan to the employer for an
employee of the same age as the former spouse selecting continuation
coverage in the case of an individual who was eligible for COBRA, and
110 percent in the case of an individual who was eligible for
Cal-COBRA.
(2) If the premium charged to the employer for a specific employee
or dependent eligible under this section is not adjusted for age of
the specific employee, or eligible dependent, then the rate for
continuation coverage under this section shall not exceed 213 percent
of the applicable current group rate. For purposes of this section,
the "applicable current group rate" means the total premiums charged
by the insurer for coverage for the group, divided by the relevant
number of covered persons.
(3) However, in computing the premiums charged to the specific
employer group, the insurer shall not include consideration of the
specific medical care expenditures for beneficiaries receiving
continuation coverage pursuant to this section.
(e) For purposes of this section, "COBRA" means Section 4980B of
Title 26 , Section 1161 and following of Title 29 , and Section 300bb
of Title 42 of the United States Code, as added by the Consolidated
Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272), and as
amended.
(f) For purposes of this section, "Cal-COBRA" means the
continuation coverage that must be offered pursuant to Article 1.7
(commencing with Section 10128.50), or Article 4.5 (commencing with
Section 1366.20) of Chapter 2.2 of Division 2 of the Health and
Safety Code.
(g) For the purposes of this section, "former spouse" means either
an individual who is divorced from an employee or former employee or
an individual who was married to an employee or former employee at
the time of the death of the employee or former employee.
(h) Every group benefit plan evidence of coverage that is issued,
amended, or renewed after January 1, 1999, shall contain a
description of the provisions and eligibility requirements for the
continuation coverage offered pursuant to this section.
(i) This section shall take effect on January 1, 1999.
10117. (a) A policy of disability insurance, self-insured employee
welfare benefit plan, or nonprofit hospital service plan may not
provide an exception for other coverage where the other coverage is
entitlement to Medi-Cal benefits under Chapter 7 (commencing with
Section 14000) or Chapter 8 (commencing with Section 14500) of Part 3
of Division 9 of the Welfare and Institutions Code, or medicaid
benefits under Subchapter 19 (commencing with Section 1396) of
Chapter 7 of Title 42 of the United States Code. Each policy of
disability insurance shall be interpreted not to provide an exception
for those Medi-Cal or medicaid benefits.
(b) A policy of disability insurance may not provide that the
benefits payable thereunder are subject to reduction if the
individual insured has entitlement to such Medi-Cal benefits.
(c) A policy of disability insurance, self-insured employee
welfare benefit plan, or nonprofit hospital service plan shall not
provide an exception for enrollment for benefits because of an
applicant's entitlement to Medi-Cal benefits under Chapter 7
(commencing with Section 14000) or Chapter 8 (commencing with Section
14500) of Part 3 of Division 9 of the Welfare and Institutions Code,
or medicaid benefits under Subchapter 19 (commencing with Section
1396) of Chapter 7 of Title 42 of the United States Code.
10117.5. No disability insurer contract that covers hospital,
medical, or surgical benefits that is issued, amended, renewed, or
delivered on and after January 1, 2002, shall contain a provision
that prohibits or restricts any health facilities' compliance with
the requirements of Section 1262.5 of the Health and Safety Code.
10118. A policy of disability insurance delivered or issued for
delivery in this state more than 120 days after the effective date of
this section, which provides that coverage of a dependent child
shall terminate upon attainment of the limiting age for dependent
children specified in the policy or contract, shall also provide in
substance that attainment of such limiting age shall not operate to
terminate the coverage of such child while the child is and continues
to be both (a) incapable of self-sustaining employment by reason of
mental retardation or physical handicap and (b) chiefly dependent
upon the insured for support and maintenance, provided proof of such
incapacity and dependency is furnished to the insurer by the insured
within 31 days of the child's attainment of the limiting age and
subsequently as may be required by the insurer, but not more
frequently than annually after the two-year period following the
child's attainment of the limiting age.
Disability policies currently approved by the commissioner which
are delivered or issued for delivery more than 120 days after the
effective date of this section shall be automatically construed to be
in compliance with this section and need not be refiled or
reprinted. Disability policies submitted to the commissioner for
approval on and after the effective date of this section shall
contain provisions in compliance with this section.
10119. On and after the operative date of this section:
(a) No policy of disability insurance which, in addition to
covering the insured, also covers members of the insured's immediate
family, may be issued or amended in this state if it contains any
disclaimer, waiver, or other limitation of coverage relative to the
accident and sickness coverage or insurability of newborn infants of
an insured from and after the moment of birth or of any minor child
placed with an insured for adoption from and after the moment the
child is placed in the physical custody of the insured for adoption.
(b) Each such policy of disability insurance shall contain a
provision granting immediate accident and sickness coverage to each
newborn infant of, and each minor child placed for adoption with, any
insured as required by subdivision (a).
(c) A policy of disability insurance, self-insured care coverage,
employee welfare benefit plan, or nonprofit hospital service plan,
shall comply with the standards set forth in Chapter 7 (commencing
with Section 3750) of Part 1 of Division 9 of the Family Code and
Section 14124.94 of the Welfare and Institutions Code.
10119.5. (a) No individual or group policy of health insurance that
is issued, amended, renewed, or delivered on or after July 1, 2003,
that provides maternity coverage shall contain a copayment or
deductible for inpatient hospital maternity services that exceeds the
most common amount of the copayment or deductible contained in the
policy for inpatient services provided for other covered medical
conditions or contain a copayment or deductible for ambulatory care
maternity services that exceeds the most common amount of the
copayment or deductible contained in the policy for ambulatory care
services provided for other covered medical conditions.
(b) No group or blanket policy of health insurance that provides
maternity benefits for a person covered continuously from conception
shall be issued, amended, delivered, or renewed in this state if it
contains any exclusion, reduction, or other limitations as to
coverage, deductibles, or coinsurance provisions, as to involuntary
complications of pregnancy, unless the provisions apply generally to
all benefits paid under the policy.
(c) For purposes of this section, involuntary complications of
pregnancy shall include, but not be limited to, puerperal infection,
eclampsia, cesarean section delivery, ectopic pregnancy, and toxemia.
(d) This section shall not apply to Medicare supplement,
vision-only, or Champus-supplement insurance, or to hospital
indemnity, accident-only, and specified disease insurance that does
not pay benefits on a fixed benefit, cash payment only basis.
(e) This section shall not permit copayments or deductibles in the
Medi-Cal program that are not otherwise authorized under state or
federal law.
(f) This section shall become operative on July 1, 2003.
10119.6. (a) On and after January 1, 1990, every insurer issuing,
renewing, or amending a policy of disability insurance which covers
hospital, medical, or surgical expenses on a group basis shall offer
coverage of infertility treatment, except in vitro fertilization,
under those terms and conditions as may be agreed upon between the
group policyholder and the insurer. Every insurer shall communicate
the availability of that coverage to all group policyholders and to
all prospective group policyholders with whom they are negotiating.
(b) For purposes of this section, "infertility" means either (1)
the presence of a demonstrated condition recognized by a licensed
physician and surgeon as a cause of infertility, or (2) the inability
to conceive a pregnancy or to carry a pregnancy to a live birth
after a year or more of regular sexual relations without
contraception. "Treatment for infertility" means procedures
consistent with established medical practices in the treatment of
infertility by licensed physicians and surgeons including, but not
limited to, diagnosis, diagnostic tests, medication, surgery, and
gamete intrafallopian transfer. "In vitro fertilization" means the
laboratory medical procedures involving the actual in vitro
fertilization process.
(c) Nothing in this section shall be construed to deny or restrict
in any way any existing right or benefit to coverage and treatment
of infertility under an existing law, plan or policy.
(d) Nothing in this section shall be construed to require any
employer that is a religious organization to offer coverage for forms
of treatment of infertility in a manner inconsistent with the
religious organization's religious and ethical principles.
(e) Nothing in this section shall be construed to require any
insurer, which is a subsidiary of an entity whose owner or corporate
member is a religious organization, to offer coverage for treatment
of infertility in a manner inconsistent with that religious
organization's religious and ethical principles.
For purposes of this subdivision, "subsidiary" of a specified
corporation means a corporation more than 45 percent of the voting
power of which is owned directly, or indirectly through one or more
subsidiaries, by the specified corporation.
(f) This section applies to every disability insurance policy
which is issued, amended, or renewed to residents of this state
regardless of the situs of the contract.
10119.7. No group or individual policy of disability insurance
which covers hospital, medical, or surgical expenses shall be issued,
amended, delivered, or renewed in this state on or after January 1,
1981, if it contains any exclusion, reduction, or other limitations,
as to coverage, deductibles, or coinsurance provisions applicable
solely to conditions attributable to diethylstilbestrol or exposure
to diethylstilbestrol.
All policies subject to this section and issued, amended,
delivered, or renewed in this state on or after January 1, 1981,
shall be construed to be in compliance with this section, and any
provision in any such policy which is in conflict with this section
shall be of no force or effect.
10119.8. On and after January 1, 1993, every insurer issuing,
amending, or renewing a policy of individual or group disability
insurance that covers hospital, medical, or surgical expenses shall
offer coverage for screening for blood lead levels for covered
children. This section shall not apply to specified accident,
specified disease, hospital indemnity, Medicare supplement, or
long-term care health insurance policies.
10119.9. (a) A disability insurance policy or certificate covering
hospital, surgical, or medical expenses, that meets the definition of
"health benefit plan" in subdivision (a) of Section 10198.6, that is
issued, amended, renewed, or delivered on or after January 1, 2000,
shall be deemed to cover general anesthesia and associated facility
charges for dental procedures rendered in a hospital or surgery
center setting, when the clinical status or underlying medical
condition of the insured requires dental procedures that ordinarily
would not require general anesthesia to be rendered in a hospital or
surgery center setting. The disability insurance policy or
certificate may require prior authorization of general anesthesia and
associated charges required for dental care procedures in the same
manner that prior authorization is required for other covered
diseases or conditions.
(b) This section shall apply only to general anesthesia and
associated facility charges for only the following insureds, and only
if the insureds meet the criteria in subdivision (a):
(1) Insureds who are under seven years of age.
(2) Insureds who are developmentally disabled, regardless of age.
(3) Insureds whose health is compromised and for whom general
anesthesia is medically necessary, regardless of age.
(c) Nothing in this section shall require insurers to cover any
charges for the dental procedure itself, including the professional
fee of the dentist. Coverage for anesthesia and associated facility
charges pursuant to this section shall be subject to all other terms
and conditions of the policy or certificate that apply generally to
other benefits.
(d) Nothing in this section shall require insurers to cover
anesthesia or related facility charges for dental procedures that
ordinarily would require general anesthesia and that do not meet the
requirements of subdivision (a), (b), or (c).
(e) A disability insurance policy may include coverage specified
in subdivision (a) at any time prior to January 1, 2000.
10120. If a policy of disability insurance issued, issued for
delivery, or renewed in this state after the effective date of this
section provides in any manner for payment of all or part of the cost
of a "sterilization operation or procedure" any exclusion,
reduction, or limitation on such a benefit based upon the reason, or
reasons, of the covered persons for requesting such sterilization
shall be void and of no effect.
All disability policies issued, issued for delivery, or renewed in
this state after effective date of this section shall be
automatically construed to be in compliance with this section and
need not be refiled or reprinted.
As used in this code, "sterilization operations or procedures"
shall include and mean any operation or procedure altering the human
body which has as its purpose, or one of its purposes, the temporary
or permanent prevention of procreation by either a male or a female.
10120.5. Any act by a disability insurer that covers hospital,
medical, or surgical expenses that violates Section 510, Section
2056, or Section 2056.1 of the Business and Professions Code shall
also be a violation of this code.
10121. (a) No self-insured employee welfare benefit plan, issued or
renewed on or after November 23, 1970, which contains coverage for
sterilization operations or procedures, shall impose any disclaimer,
restriction on, or limitation of, coverage relative to the covered
individual's reason for sterilization. All those plans entered into
or renewed on or after November 23, 1970, shall be construed to be in
compliance with this section, and any provision in any plan which is
in conflict with this section shall be of no force or effect.
(b) Every self-insured employee welfare benefit plan issued or
amended on or after July 1, 1972, which provides benefits to the
employee's dependents, shall contain a provision granting immediate
accident and sickness coverage, from and after the moment of birth,
to each newborn infant of any family covered and to each minor child
placed for adoption from and after the moment the child is placed in
the physical custody of the covered family for adoption. No plan may
be issued or amended if it contains any disclaimer, waiver, or other
limitation of coverage relative to the coverage or insurability of
newborn infants of or minor children placed for adoption with a
family covered as required by this section. Coverage of minor
children placed for adoption with a covered family shall be required
only after January 1, 1988.
(c) No self-insured employee welfare benefit plan which provides
maternity benefits for a person covered continuously from conception
shall be issued, amended, delivered, or renewed in this state on or
after July 1, 1976, if it contains any exclusion, reduction, or other
limitations as to coverage, deductibles, or coinsurance provisions
as to involuntary complications of pregnancy, unless those provisions
apply generally to all benefits paid under the plan. If a fixed
amount is specified in the plan for surgery, the fixed amounts for
surgical procedures involving involuntary complications of pregnancy
shall be commensurate with other fixed amounts payable for procedures
of comparable difficulty and severity. In a case where a fixed
amount is payable for maternity benefits, involuntary complications
of pregnancy shall be deemed an illness and entitled to benefits
otherwise provided by the plan. Where the plan contains a maternity
deductible, the maternity deductible shall apply only to expenses
resulting from normal delivery and cesarean section delivery.
However, expenses for cesarean section delivery in excess of the
deductible shall be treated as expenses for any other illness under
the plan. This subdivision shall apply to all self-insured employee
welfare benefit plans except any plan made subject to an applicable
collective bargaining agreement in effect before July 1, 1976.
For purposes of this subdivision, involuntary complications of
pregnancy shall include, but not be limited to, puerperal infection,
eclampsia, cesarean section delivery, ectopic pregnancy, and toxemia.
All plans subject to this subdivision and issued, amended,
delivered, or renewed in this state on or after July 1, 1976, shall
be construed to be in compliance with this section, and any provision
in any plan which is in conflict with this section shall be of no
force or effect.
(d) Every self-insured employee welfare benefit plan issued or
amended on or after January 1, 1987, which provides benefits to the
employee's dependents, shall offer a choice to all employees of
coverage for comprehensive preventive health care for children.
(e) For purposes of this section, benefits for the comprehensive
preventive care of children shall be consistent with the Guidelines
for Health Supervision of Children and Youth, as adopted by the
American Academy of Pediatrics in May 1982, and provide for the
following:
(1) Physician service for routine physical examinations.
(2) Immunizations.
(3) Laboratory services in connection with routine physical
examinations.
(f) As used in this section, "self-insured employee welfare
benefit plan" means any plan or program of benefits provided by an
employer or an employee organization, or both, for the purpose of
providing hospital, medical, surgical, nursing, or dental services,
or indemnification for the costs incurred for those services, to the
employer's employees or their dependents.
10121.5. (a) When a husband and wife are both employed as
employees, and both have enrolled themselves and their eligible
family members under a group policy of disability insurance provided
by their respective employers, and each spouse is covered as an
employee under the terms of the same master policy, each spouse may
claim on his or her behalf, or on behalf of his or her enrolled
dependents, the combined maximum contractual benefits to which an
employee is entitled under the terms of the master policy, not to
exceed in the aggregate 100 percent of the charge for the covered
expense or service.
(b) When a husband and wife are both employed as employees, and
both have enrolled themselves and their eligible family members under
a self-insured employee welfare benefit plan provided by their
respective employers, and each spouse is covered as an employee under
the terms of the same master contract, each spouse may claim on his
or her behalf, or on behalf of his or her enrolled dependents, the
combined maximum contractual benefits to which an employee is
entitled under the terms of the master contract, not to exceed in the
aggregate 100 percent of the charge for the covered expense or
service.
(c) This section shall apply to every group disability insurance
policy and self-insured employee welfare benefit plan which is
entered into, issued, delivered, amended, or renewed in this state on
or after January 1, 1978.
10121.6. (a) No policy of group disability insurance or
self-insured employee welfare benefit plan which provides hospital,
medical, or surgical expense benefits for employees, insureds, or
policyholders and their dependents shall exclude a dependent child
from eligibility or benefits solely because the dependent child does
not reside with the employee, insured, or policyholder.
(b) Each policy of group disability insurance or self-insured
employee welfare benefit plan which provides hospital, medical, or
surgical expense benefits for employees, insureds, or policyholders
and their dependents shall enroll, upon application by the employer
or group administrator, a dependent child of the noncustodial parent
when that parent is the employee, insured, or policyholder at any
time either the parent or the person having custody of the child as
defined in Section 3751.5 of the Family Code, or the local child
support agency makes an application for enrollment to the employer or
group administrator when a court order for medical support exists.
In the case of children who are eligible for medicaid, the State
Department of Health Services may also make that application.
10121.7. (a) A policy of group disability insurance that provides
hospital, medical, or surgical expense benefits shall offer coverage
to employers or guaranteed associations, as defined in Section 10700,
for the domestic partner of an employee, insured, or policyholder to
the same extent, and subject to the same terms and conditions, as
provided to a dependent of the employee, insured, or policyholder,
and shall inform employers and guaranteed associations of the
availability of this coverage.
(b) If an employer or guaranteed association has purchased
coverage for domestic partners pursuant to subdivision (a), a
disability insurer that provides hospital, medical, or surgical
expense benefits for employees, insureds, or policyholders and their
dependents shall enroll as a dependent, upon application by the
employer or group administrator, a domestic partner of the employee,
insured, or policyholder in accordance with the terms and conditions
of the group contract that apply generally to all dependents under
the policy, including coordination of benefits.
(c) For purposes of this section, the term "domestic partner"
shall have the same meaning as that term is used in Section 297 of
the Family Code.
(d) A policy of group disability insurance may require that the
employee, insured, or policyholder verify the status of the domestic
partnership by providing to the insurer a copy of a valid Declaration
of Domestic Partnership filed with the Secretary of State pursuant
to Section 298 of the Family Code or an equivalent document issued by
a local agency of this state, another state, or a local agency of
another state under which the partnership is created. The policy may
also require that the employee, insured, or policyholder notify the
insurer upon the termination of the domestic partnership.
(e) Nothing in this section shall be construed to expand the
requirements of Section 4980B of Title 26 of the United States Code,
Section 1161, and following, of Title 29 of the United States Code,
or Section 300bb-1, and following, of Title 42 of the United States
Code, as added by the Consolidated Omnibus Budget Reconciliation Act
of 1985 (Public Law 99-272), and as those provisions may be later
amended.
10122. If a policy of group disability insurance issued or issued
for delivery or amended in this state after the effective date of
this section provides in any manner for coverage for an employee and
one or more covered persons dependent upon such employee and provides
for an extension of coverage for any period following a termination
of employment of the employee, the policy shall provide that such
extension of coverage shall apply to dependents upon the same terms
and conditions precedent as applied to the covered employee, for the
same period of time, subject to payment of premiums, if any, as
required by the terms of the policy and subject to any applicable
collective bargaining agreement.
All such group disability policies issued or issued for delivery
or amended in this state after the effective date of this section
shall be automatically construed to be in compliance with this
section and need not be refiled or reprinted.
10122.1. On and after the effective date of this section, every
policy of disability insurance which covers hospital, medical, or
surgical expenses on a group basis shall offer coverage to physically
handicapped individual members of the group under the same terms and
conditions as are normally offered to individual members of the
group without physical handicap. The availability of such coverage
shall be communicated to group policyholders and to prospective group
policyholders during negotiations. Group policies shall not be
required to cover hospital, medical, or surgical expenses arising as
a direct result of an individual member's physical handicap.
10122.2. If a policy of group disability insurance issued,
delivered, amended, or renewed in this state on or after the
effective date of this section provides in any manner for coverage
for an employee and a covered spouse dependent upon such employee,
the policy shall not provide for coverage under conditions less
favorable for employees than coverage provided for covered spouses
dependent upon the employees.
10123. (a) No self-insured employee welfare benefit plan, issued or
renewed on or after the effective date of this section, which
provides coverage for an employee and one or more covered persons
dependent upon such employee and provides for an extension of
coverage for any period following a termination of employment of the
employee, shall fail to provide that such extension of coverage shall
apply to dependents upon the same terms and conditions precedent as
applied to the covered employee, for the same period of time, subject
to payment of premiums, if any, as required by the terms of the
policy and subject to any limitations or conditions set forth in any
applicable collective-bargaining agreement. All such plans entered
into or renewed on or after the effective date of this section shall
be construed to be in compliance with this section, and any provision
in any such plan which is in conflict with this section shall be of
no force or effect.
(b) A plan contract which provides benefits that accrue after a
certain time of confinement in a health care facility shall specify
what constitutes a day of confinement or the number of consecutive
hours of confinement which are requisite to the commencement of
benefits.
(c) As used in subdivisions (a) and (b), "self-insured employee
welfare benefit plan" has the same meaning as that specified in
subdivision (d) of Section 10121.
10123.1. Every self-insured employee welfare benefit plan, as
defined in Section 10121, issued, amended as to benefits, or renewed
after January 1, 1977, shall comply with the requirements of Article
1.5 (commencing with Section 10128) of this chapter.
10123.2. On and after the effective date of this section, every
self-insured employee welfare benefit plan which provides coverage
for hospital, medical, or surgical expenses shall offer coverage to
physically handicapped persons for such expenses incurred, under such
terms and conditions as are normally provided by the self-insured
welfare benefit plan and a member without physical handicap. Every
self-insured welfare benefit plan shall communicate the availability
of such coverage to all members and prospective members. The
self-insured welfare benefit plan shall not be required to cover
hospital, medical, or surgical expenses arising as a direct result of
a physically disabled person's handicap.
10123.3. (a) No self-insured employee welfare benefit plan shall
refuse to enroll any person or accept any person as a subscriber or
renew any person as a subscriber after appropriate application on the
basis of a person's genetic characteristics that may, under some
circumstances, be associated with disability in that person or that
person's offspring. No plan shall require a higher rate or charge,
or offer or provide different terms, conditions, or benefits, on the
basis of a person's genetic characteristics that may, under some
circumstances, be associated with disability in that person or that
person's offspring than is at the time required of any other
individual in an otherwise identical classification, nor shall any
plan make or require any rebate, discrimination, or discount upon the
amount to be paid or the service to be rendered under the plan
because the person carries those traits.
(b) No self-insured employee welfare benefit plan shall seek
information about a person's genetic characteristics for any
nontherapeutic purpose.
(c) No discrimination shall be made in the fees or commissions of
a solicitor or solicitor firm for an enrollment or a subscription or
the renewal of an enrollment or subscription of any person on the
basis of a person's genetic characteristics that may, under some
circumstances, be associated with disability in that person or that
person's offspring.
(d) "Genetic characteristics" as used in this section means either
of the following:
(1) Any scientifically or medically identifiable gene or
chromosome, or combination or alteration thereof, that is known to be
a cause of a disease or disorder in a person or his or her
offspring, or that is determined to be associated with a
statistically increased risk of development of a disease or disorder,
and that is presently not associated with any symptoms of any
disease or disorder.
(2) Inherited characteristics that may derive from the individual
or family member, that are known to be a cause of a disease or
disorder in a person or his or her offspring, or that are determined
to be associated with a statistically increased risk of development
of a disease or disorder, and that are presently not associated with
any symptoms of any disease or disorder.
10123.31. (a) In addition to any other remedy permitted by law, the
commissioner shall have the administrative authority to assess
penalties specified in this section against self-insured employee
welfare benefit plans engaged in the business of health insurance for
violations of Section 10123.3.
(b) Any plan that violates Section 10123.3 is liable for
administrative penalties of not more than two thousand five hundred
dollars ($2,500) for the first violation and not more than five
thousand dollars ($5,000) for each subsequent violation.
(c) Any plan that violates Section 10123.3 with a frequency that
indicates a general business practice or commits a knowing violation
of that section, is liable for administrative penalties of not less
than fifteen thousand dollars ($15,000) and not more than one hundred
thousand dollars ($100,000) for each violation.
(d) An act or omission that is inadvertent and that results in
incorrect rates being charged to more than one subscriber shall be a
single violation for the purpose of this section.
10123.35. (a) This section shall apply to the disclosure of genetic
test results contained in an applicant or enrollee's medical records
by a self-insured welfare benefit plan.
(b) Any person who negligently discloses results of a test for a
genetic characteristic to any third party in a manner that identifies
or provides identifying characteristics of the person to whom the
test results apply, except pursuant to a written authorization as
described in subdivision (g), shall be assessed a civil penalty in an
amount not to exceed one thousand dollars ($1,000) plus court costs,
as determined by the court, which penalty and costs shall be paid to
the subject of the test.
(c) Any person who willfully discloses the results of a test for a
genetic characteristic to any third party in a manner that
identifies or provides identifying characteristics of the person to
whom the test results apply, except pursuant to a written
authorization as described in subdivision (g), shall be assessed a
civil penalty in an amount not less than one thousand dollars
($1,000) and no more than five thousand dollars ($5,000) plus court
costs, as determined by the court, which penalty and costs shall be
paid to the subject of the test.
(d) Any person who willfully or negligently discloses the results
of a test for a genetic characteristic to a third party in a manner
that identifies or provides identifying characteristics of the person
to whom the test results apply, except pursuant to a written
authorization as described in subdivision (g), that results in
economic, bodily, or emotional harm to the subject of the test, is
guilty of a misdemeanor punishable by a fine not to exceed ten
thousand dollars ($10,000).
(e) In addition to the penalties listed in subdivisions (b) and
(c), any person who commits any act described in subdivision (b) or
(c) shall be liable to the subject for all actual damages, including
damages for economic, bodily, or emotional harm which is proximately
caused by the act.
(f) Each disclosure made in violation of this section is a
separate and actionable offense.
(g) The applicant's "written authorization," as used in this
section, shall satisfy the following requirements:
(1) Is written in plain language.
(2) Is dated and signed by the individual or a person authorized
to act on behalf of the individual.
(3) Specifies the types of persons authorized to disclose
information about the individual.
(4) Specifies the nature of the information authorized to be
disclosed.
(5) States the name or functions of the persons or entities
authorized to receive the information.
(6) Specifies the purposes for which the information is collected.
(7) Specifies the length of time the authorization shall remain
valid.
(8) Advises the person signing the authorization of the right to
receive a copy of the authorization. Written authorization is
required for each separate disclosure of the test results, and the
authorization shall set forth the person or entity to whom the
disclosure would be made.
(h) This section shall not apply to disclosures required by the
Department of Health Services necessary to monitor compliance with
Chapter 1 (commencing with Section 124975) of Part 5 of Division 106
of the Health and Safety Code, nor to disclosures required by the
Department of Managed Health Care necessary to administer and enforce
compliance with Section 1374.7 of the Health and Safety Code.
10123.36. (a) On or before July 1, 1999, for purposes of public
disclosure, every disability insurer that covers hospital, medical,
or surgical expenses, and authorizes insureds to select providers who
have contracted with the insurer for alternative rates of payment as
described in Section 10133, and the disability insurer or any of its
contracting providers or provider groups utilize economic profiling
related to services provided to insureds, shall file with the
department a description of any policies and procedures related to
economic profiling utilized by the insurer and any of its contracting
providers and provider groups. The filing shall describe how these
policies and procedures are used in utilization review, peer review,
incentive and penalty programs, and in provider retention and
termination decisions. The filing shall also indicate in what
manner, if any, the economic profiling system being used takes into
consideration risk adjustments that reflect case mix, type and
severity of patient illness, age of patients, and other policyholder
characteristics that may account for higher or lower than expected
costs or utilization of services. Any changes to the policies and
procedures shall be filed expeditiously with the commissioner.
Nothing in this section shall be construed to restrict or impair the
department, in its discretion, from utilizing the information filed
pursuant to this section for purposes of ensuring compliance with
this chapter.
(b) The commissioner shall make each disability insurer filing
available to the public upon request. The commissioner shall not
publicly disclose any information submitted pursuant to this section
that is determined by the commissioner to be confidential pursuant to
state law.
(c) Each disability insurer that uses economic profiling shall,
upon request, provide a copy of economic profiling information
related to a contracting provider or provider group to the profiled
provider or group. In addition, each disability insurer shall
require as a condition of contract that its contracting provider
groups that maintain economic profiles of individual providers who
may be selected by insureds shall, upon request, provide a copy of
individual economic profiling information to individual providers who
are profiled. The economic profiling information provided pursuant
to this section shall be provided upon request until 60 days after
the date upon which the contract between the insurer and the
individual provider or provider group terminates, or until 60 days
after the date the contract between the provider group and the
individual provider terminates, whichever is applicable.
(d) For the purposes of this section, "economic profiling" shall
mean any evaluation of a particular physician, provider, or provider
group based in whole or in part on the economic costs or utilization
of services associated with medical care provided or authorized by
the physician, provider, or provider group.
10123.4. If a self-insured employee welfare benefit plan issued,
amended, or renewed in this state on or after the effective date of
this section provides in any manner for coverage for an employee and
a covered spouse dependent upon such employee, the plan shall not
provide for coverage under conditions less favorable for employees
than coverage provided for covered spouses dependent upon the
employees.
As used in this section, "self-insured employee welfare benefit
plan" has the same meaning as that specified in subdivision (b) of
Section 10121.
10123.5. (a) On or after January 1, 1993, every insurer issuing
group disability insurance which covers hospital, medical, or
surgical expenses shall provide benefits for the comprehensive
preventive care of children 16 years of age or younger under such
terms and conditions as may be agreed upon between the group
policyholder and the insurer. Every insurer shall communicate the
availability of such benefits to all group policyholders and to all
prospective group policyholders with whom they are negotiating.
(b) For purposes of this section, benefits for the comprehensive
preventive care of children shall comply with both of the following:
(1) Be consistent with both of the following:
(A) The Recommendations for Preventive Pediatric Health Care, as
adopted by the American Academy of Pediatrics in September of 1987.
(B) The most current version of the Recommended Childhood
Immunization Schedule/United States, jointly adopted by the American
Academy of Pediatrics, the Advisory Committee on Immunization
Practices, and the American Academy of Family Physicians, unless the
State Department of Health Services determines, within 45 days of the
published date of the schedule, that the schedule is not consistent
with the purposes of this section.
(2) Provide for the following:
(A) Periodic health evaluations.
(B) Immunizations.
(C) Laboratory services in connection with periodic health
evaluations.
10123.55. (a) On or after January 1, 1993, every insurer issuing
group disability insurance which covers hospital, medical, or
surgical expenses shall offer benefits for the comprehensive
preventive care of children 17 and 18 years of age under such terms
and conditions as may be agreed upon between the group policyholder
and the insurer. Every insurer shall communicate the availability of
these benefits to all group policyholders and to all prospective
group policyholders with whom they are negotiating.
(b) For purposes of this section, benefits for the comprehensive
preventive care of children shall comply with both of the following:
(1) Be consistent with both of the following:
(A) The Recommendations for Preventive Pediatric Health Care, as
adopted by the American Academy of Pediatrics in September of 1987.
(B) The most current version of the Recommended Childhood
Immunization Schedule/United States, jointly adopted by the American
Academy of Pediatrics, the Advisory Committee on Immunization
Practices, and the American Academy of Family Physicians, unless the
State Department of Health Services determines, within 45 days of the
published date of the schedule, that the schedule is not consistent
with the purposes of this section.
(2) Provide for the following:
(A) Periodic health evaluations.
(B) Immunizations.
(C) Laboratory services in connection with periodic health
evaluations.
10123.6. On and after January 1, 1990, every insurer issuing group
disability insurance which covers hospital, medical, or surgical
expenses shall offer coverage for the treatment of alcoholism under
such terms and conditions as may be agreed upon between the group
policyholder and the insurer. Every insurer shall communicate the
availability of such coverage to all group policyholders and to all
prospective group policyholders with whom they are negotiating.
If the group subscriber or policyholder agrees to such coverage or
to coverage for treatment of chemical dependency, or nicotine use,
the treatment may take place in facilities licensed to provide
alcoholism or chemical dependency services under Chapter 2
(commencing with Section 1250) of Division 2 of the Health and Safety
Code.
Treatment for nicotine use may be subject to separate deductibles,
copayments, and overall cost limitations as determined by the
policy.
10123.67. (a) On or before July 1, 1997, every disability insurer
that covers hospital, medical, or surgical expenses, as described in
subdivision (b), shall file with the department a written policy,
which is not subject to approval or disapproval by the department,
describing the manner in which the insurer determines if a second
medical opinion is medically necessary and appropriate. Notice of
the policy and information regarding the manner in which an insured
may receive a second medical opinion shall be provided to all
insureds in the insurer's evidence of coverage. The written policy
shall describe the manner in which requests for a second medical
opinion are reviewed by the insurer.
(b) This section shall only apply to disability insurers covering
hospital, medical, or surgical expenses that contract with providers
for alternative rates pursuant to Section 10133 or 11512 and that
limit payments under those policies to services secured by insureds
from providers charging alternative rates pursuant to the contracts.
(c) Nothing in this section shall require the disability insurer
to cover services or provide benefits that are not otherwise covered
under the terms and conditions of the plan contract, nor to provide
services through providers who are not under contract with the plan.
10123.68. (a) When requested by an insured or contracting health
professional who is treating an insured, a disability insurer that
covers hospital, medical, or surgical expenses shall authorize a
second opinion by an appropriately qualified health care
professional. Reasons for a second opinion to be provided or
authorized shall include, but are not limited to, the following:
(1) If the insured questions the reasonableness or necessity of
recommended surgical procedures.
(2) If the insured questions a diagnosis or plan of care for a
condition that threatens loss of life, loss of limb, loss of bodily
function, or substantial impairment, including, but not limited to, a
serious chronic condition.
(3) If clinical indications are not clear or are complex and
confusing, a diagnosis is in doubt due to conflicting test results,
or the treating health professional is unable to diagnose the
condition and the insured requests an additional diagnosis.
(4) If the treatment plan in progress is not improving the medical
condition of the insured within an appropriate period of time given
the diagnosis and plan of care, and the insured requests a second
opinion regarding the diagnosis or continuance of the treatment.
(5) If the insured has attempted to follow the plan of care or
consulted with the initial provider concerning serious concerns about
the diagnosis or plan of care.
(b) For purposes of this section, an appropriately qualified
health care professional is a primary care physician or a specialist
who is acting within his or her scope of practice and who possesses a
clinical background, including training and expertise, related to
the particular illness, disease, condition or conditions associated
with the request for a second opinion.
(c) If an insured or participating health professional who is
treating an insured requests a second opinion pursuant to this
section, an authorization or denial shall be provided in an
expeditious manner. When the insured's condition is such that the
insured faces an imminent and serious threat to his or her health,
including, but not limited to, the potential loss of life, limb, or
other major bodily function, or lack of timeliness that would be
detrimental to the insured's life or health or could jeopardize the
insured's ability to regain maximum function, the second opinion
shall be rendered in a timely fashion appropriate to the nature of
the insured's condition, not to exceed 72 hours after the insurer's
receipt of the request, whenever possible. Each insurer shall file
with the Department of Insurance timelines for responding to requests
for second opinions for cases involving emergency needs, urgent
care, and other requests by July 1, 2000, and within 30 days of any
amendment to the timelines. The timelines shall be made available to
the public upon request.
(d) If an insurer approves a request by an insured for a second
opinion, the insured shall be responsible only for the costs of
applicable copayments that the insurer requires for similar
referrals.
(e) If the insured is requesting a second opinion about care from
his or her primary care physician, the second opinion shall be
provided by an appropriately qualified health care professional of
the insured's choice who is contracted with the insurer.
(f) If the insured is requesting a second opinion about care from
a specialist, the second opinion shall be provided by any provider of
the same or equivalent specialty, of the insured's choice, within
the insurer's provider network, if the insurance contract limits
second opinions to within a network.
(g) The insurer may limit second opinions to its network of
providers if the insurance contract limits the benefit to within a
network of providers and there is a participating provider who meets
the standard specified in subdivision (b). If there is no
participating provider who meets this standard, then the insurer
shall authorize a second opinion by an appropriately qualified health
professional outside of the insurer's provider network. In
approving a second opinion either inside or outside of the insurer's
provider network, the insurer shall take into account the ability of
the insured to travel to the provider.
(h) The insurer shall require the second opinion health
professional to provide the insured and the initial health
professional with a consultation report, including any recommended
procedures or tests that the second opinion health professional
believes appropriate. Nothing in this section shall be construed to
prevent the insurer from authorizing, based on its independent
determination, additional medical opinions concerning the medical
condition of an insured.
(i) If the insurer denies a request by an insured for a second
opinion, it shall notify the insured in writing of the reasons for
the denial and shall inform the insured of the right to dispute the
denial, and the procedures for exercising that right.
(j) If the insurance contract limits health care services to
within a network of providers, in order for coverage to be in force,
the insured shall obtain services only from a provider who is
participating in, or under contract with, the insurer pursuant to the
specific insurance contract under which the insured is entitled to
health care service benefits.
(k) This section shall not apply to any policy or contract of
disability insurance that covers hospital, medical, or surgical
expenses and that does not limit second opinions, subject to all
other terms and conditions of the contract.
(l) This section shall not apply to accident-only, specified
disease, or hospital indemnity health insurance policies.
10123.7. On or after January 1, 1986, every insurer issuing group
disability insurance which covers hospital, medical, or surgical
expenses shall offer coverage for orthotic and prosthetic devices and
services under such terms and conditions as may be agreed upon
between the group policyholder and the insurer. Every insurer shall
communicate the availability of that coverage to all group
policyholders and to all prospective group policyholders with whom
they are negotiating. Any coverage for prosthetic devices shall
include original and replacement devices, as prescribed by a
physician. Any coverage for orthotic devices shall provide for
coverage when the device, including original and replacement devices,
is prescribed by a physician, or is ordered by a licensed health
care provider acting within the scope of his or her license. Every
insurer shall have the right to conduct a utilization review to
determine medical necessity prior to authorizing these services.
10123.8. (a) Every policy of disability insurance that provides
coverage for hospital, medical, or surgical expenses, that is issued,
amended, delivered, or renewed on or after January 1, 2000, shall
provide coverage for screening for, diagnosis of, and treatment for,
breast cancer.
(b) No policy of disability insurance that provides coverage for
hospital, medical, or surgical expenses shall deny enrollment or
coverage to an individual solely due to a family history of breast
cancer, or who has had one or more diagnostic procedures for breast
disease but has not developed or been diagnosed with breast cancer.
(c) Every policy of disability insurance shall cover screening and
diagnosis of breast cancer, consistent with generally accepted
medical practice and scientific evidence, upon the referral of the
insured's participating physician.
(d) Treatment for breast cancer under this section shall include
coverage for prosthetic devices or reconstructive surgery to restore
and achieve symmetry for the patient incident to a mastectomy.
Coverage for prosthetic devices and reconstructive surgery shall be
subject to the deductible and coinsurance conditions applied to the
mastectomy and all other terms and conditions applicable to other
benefits.
(e) As used in this section, "mastectomy" means the removal of all
or part of the breast for medically necessary reasons, as determined
by a licensed physician and surgeon.
(f) As used in this section, "prosthetic devices" means the
provision of initial and subsequent devices pursuant to an order of
the patient's physician and surgeon.
(g) For purposes of this section, disability insurance does not
include accident only, credit, disability income, specified disease
and hospital confinement indemnity, coverage of Medicare services
pursuant to contracts with the United States government, Medicare
supplement, long-term care insurance, dental, vision, coverage issued
as a supplement to liability insurance, insurance arising out of a
workers' compensation or similar law, automobile medical payment
insurance, or insurance under which benefits are payable with or
without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent
self-insurance.
10123.81. On or after January 1, 2000, every individual or group
policy of disability insurance or self-insured employee welfare
benefit plan that is issued, amended, or renewed, shall be deemed to
provide coverage for at least the following, upon the referral of a
nurse practitioner, certified nurse midwife, or physician, providing
care to the patient and operating within the scope of practice
provided under existing law for breast cancer screening or diagnostic
purposes:
(a) A baseline mammogram for women age 35 to 39, inclusive.
(b) A mammogram for women age 40 to 49, inclusive, every two years
or more frequently based on the women's physician's recommendation.
(c) A mammogram every year for women age 50 and over.
Nothing in this section shall be construed to require an
individual or group policy to cover the surgical procedure known as
mastectomy or to prevent application of deductible or copayment
provisions contained in the policy or plan, nor shall this section be
construed to require that coverage under an individual or group
policy be extended to any other procedures.
Nothing in this section shall be construed to authorize an insured
or plan member to receive the coverage required by this section if
that coverage is furnished by a nonparticipating provider, unless the
insured or plan member is referred to that provider by a
participating physician, nurse practitioner, or certified nurse
midwife providing care.
10123.82. Every policy of disability insurance which provides for
the surgical procedure known as a laryngectomy and which is issued,
amended, delivered, or renewed in this state on or after January 1,
1993, shall include coverage for prosthetic devices to restore a
method of speaking for the patient incident to the laryngectomy.
Coverage for prosthetic devices shall be subject to the deductible
and coinsurance conditions applied to the laryngectomy, and all
other terms and conditions applicable to other benefits. As used in
this section, "laryngectomy" means the removal of the larynx for
medically necessary reasons, as determined by a licensed physician
and surgeon.
Any provision in any policy issued, amended, delivered, or renewed
in this state on or after January 1, 1993, which is in conflict with
this section shall be of no force or effect.
As used in this section, "prosthetic devices" means and includes
the provision of initial and subsequent prosthetic devices, including
installation accessories, pursuant to an order of the patient's
physician and surgeon. "Prosthetic devices" does not include
electronic voice producing machines.
10123.83. (a) On or after January 1, 1995, every policy of
disability insurance that covers hospital, medical, or surgical
expenses and is issued, amended, delivered, or renewed in this state
shall include obstetrician-gynecologists as eligible primary care
physicians provided they meet the insurer's written eligibility
criteria for all specialists seeking primary care physician status.
(b) For purposes of this section, the term "primary care physician"
means a physician, as defined in Section 14254 of the Welfare and
Institutions Code, who has the responsibility for providing initial
and primary care to patients, for maintaining the continuity of
patient care, and for initiating referral for specialist care. This
means providing care for the majority of health care problems,
including, but not limited to, preventive services, acute and chronic
conditions, and psychosocial issues.
10123.83. (a) Every individual or group policy of disability
insurance that covers hospital, medical, or surgical benefits that is
issued, amended, or renewed on or after January 1, 1999, shall be
deemed to provide coverage for the screening and diagnosis of
prostate cancer, including, but not limited to, prostate-specific
antigen testing and digital rectal examinations, when medically
necessary and consistent with good professional practice.
(b) Nothing in this section shall be construed to require an
individual or group policy to cover the surgical and other procedures
known as radical prostatectomy, external beam radiation therapy,
radiation seed implants, and combined hormonal therapy, or to prevent
application of deductible or copayment provisions contained in the
policy, nor shall this section be construed to require that coverage
under an individual or group policy be extended to any other
procedures.
(c) This section shall not apply to specified accident, specified
disease, hospital indemnity, Medicare supplement, or long-term care
health insurance policies.
10123.84. (a) The Legislature finds and declares that the unique,
private, and personal relationship between women patients and their
obstetricians and gynecologists warrants direct access to obstetrical
and gynecological physician services.
(b) Commencing January 1, 1999, every policy of disability
insurance that covers hospital, medical, or surgical expenses, and
that is issued, amended, delivered, or renewed in this state, shall
allow a policyholder the option to seek obstetrical and gynecological
physician services directly from an obstetrician and gynecologist or
directly from a participating family practice physician and surgeon
designated by the plan as providing obstetrical and gynecological
services.
(c) In implementing this section, a disability insurer may
establish reasonable provisions governing utilization protocols and
the use of obstetricians and gynecologists or family practice
physicians and surgeons, as provided for in subdivision (b), provided
that these provisions shall be consistent with the intent of this
section and shall be those customarily applied to other physicians
and surgeons, including primary care physicians and surgeons, to whom
the policyholder has direct access, and shall not be more
restrictive for the provision of obstetrical and gynecological
physician services. A policyholder shall not be required to obtain
prior approval from another physician, another provider, or the
insurer prior to obtaining direct access to obstetrical and
gynecological physician services, but the insurer may establish
reasonable requirements for the participating obstetrician and
gynecologist or the family practice physician and surgeon, as
provided in subdivision (b), to communicate with the policyholder's
primary care physician regarding the policyholder's condition,
treatment, and any need for followup care.
(d) This section shall not be construed to diminish the provisions
of Section 10123.83.
(e) The Insurance Commissioner shall report to the Legislature, on
or before January 1, 2000, on the implementation of this section.
10123.85. (a) It is the intent of the Legislature to recognize the
practice of telemedicine as a legitimate means by which an individual
may receive medical services from a health care provider without
person-to-person contact with the provider.
(b) For the purposes of this section, the meaning of "telemedicine"
is as defined in subdivision (a) of Section 2290.5 of the Business
and Professions Code.
(c) On and after January 1, 1997, no disability insurance contract
that is issued, amended, or renewed for hospital, medical, or
surgical coverage shall require face-to-face contact between a health
care provider and a patient for services appropriately provided
through telemedicine, subject to all terms and conditions of the
contract agreed upon between the policyholder or contractholder and
the insurer.
(d) Disability insurers shall not be required to pay for
consultation provided by the health care provider by telephone or
facsimile machines.
10123.86. (a) Every policy of disability insurance covering
hospital, surgical, or medical expenses that is issued, amended,
renewed, or delivered on or after January 1, 1999, that provides
coverage for surgical procedures known as mastectomies and lymph node
dissections, shall do all of the following:
(1) Allow the length of a hospital stay associated with those
procedures to be determined by the attending physician and surgeon in
consultation with the patient, consistent with sound clinical
principles and processes. No disability insurer shall require a
treating physician and surgeon to receive prior approval in
determining the length of hospital stay following those procedures.
(2) Cover prosthetic devices or reconstructive surgery, including
devices or surgery to restore and achieve symmetry for the patient
incident to the mastectomy. Coverage for prosthetic devices and
reconstructive surgery shall be subject to the deductible and
coinsurance conditions applicable to other benefits.
(3) Cover all complications from a mastectomy, including
lymphedema.
(b) As used in this section, all of the following definitions
apply:
(1) "Coverage for prosthetic devices or reconstructive surgery"
means any initial and subsequent reconstructive surgeries or
prosthetic devices, and followup care deemed necessary by the
attending physician and surgeon.
(2) "Prosthetic devices" means and includes the provision of
initial and subsequent prosthetic devices pursuant to an order of the
patient's physician and surgeon.
(3) "Mastectomy" shall have the same meaning as in Section
10123.8.
(4) "To restore and achieve symmetry" means that, in addition to
coverage of prosthetic devices and reconstructive surgery for the
diseased breast on which the mastectomy was performed, prosthetic
devices and reconstructive surgery for a healthy breast is also
covered if, in the opinion of the attending physician and surgeon,
this surgery is necessary to achieve normal symmetrical appearance.
(c) No individual, other than a licensed physician and surgeon
competent to evaluate the specific clinical issues involved in the
care requested, may deny requests for authorization of health care
services pursuant to this section.
(d) No insurer shall do any of the following in providing the
coverage described in subdivision (a):
(1) Reduce or limit the reimbursement of the attending provider
for providing care to an insured in accordance with the coverage
requirements.
(2) Provide monetary or other incentives to an attending provider
to induce the provider to provide care to an insured in a manner
inconsistent with the coverage requirements.
(3) Provide monetary payments or rebates to an insured to
encourage acceptance of less than the coverage requirements.
(e) On or after July 1, 1999, every insurer shall include notice
of the coverage required by this section in the insurer's evidence of
coverage or certificate of insurance.
(f) Nothing in this section shall be construed to limit
retrospective utilization review and quality assurance activities by
the insurer.
(g) This section shall only apply to health benefit plans, as
defined in subdivision (a) of Section 10198.6, except that for
accident only, specified disease, or hospital indemnity insurance,
coverage for benefits under this section shall apply to the extent
that the benefits are covered under the general terms and conditions
that apply to all other benefits under the policy. Nothing in this
section shall be construed as imposing a new benefit mandate on
accident only, specified disease, or hospital indemnity insurance.
10123.87. (a) No individual or group policy of disability insurance
that provides coverage for hospital, medical, and surgical benefits
that is issued, amended, renewed, or delivered on or after the
effective date of the act adding this section, that provides
maternity coverage, shall do any of the following:
(1) Restrict benefits for inpatient hospital care to a time period
less than 48 hours following a normal vaginal delivery and less than
96 hours following a delivery by caesarean section. However,
coverage for inpatient hospital care may be for a time period less
than 48 or 96 hours if both of the following conditions are met:
(A) The decision to discharge the mother and newborn before the
48- or 96-hour time period is made by the treating physicians in
consultation with the mother.
(B) The policy covers a postdischarge followup visit for the
mother and newborn within 48 hours of discharge, when prescribed by
the treating physician. The visit shall be provided by a licensed
health care provider whose scope of practice includes postpartum care
and newborn care. The visit shall include, at a minimum, parent
education, assistance and training in breast or bottle feeding, and
the performance of any necessary maternal or neonatal physical
assessments. The treating physician shall disclose to the mother the
availability of a postdischarge visit, including an in-home visit,
physician office visit, or a visit to a facility under contract with
the insurer. The treating physician, in consultation with the
mother, shall determine whether the postdischarge visit shall occur
at home, the contracted facility, or the treating physician's office
after assessment of certain factors. These factors shall include,
but not be limited to, the transportation needs of the family, and
environmental and social risks.
(2) Reduce or limit the reimbursement of the attending provider
for providing care to an individual insured in accordance with the
coverage requirements.
(3) Provide monetary or other incentives to an attending provider
to induce the provider to provide care to an individual insured in a
manner inconsistent with the coverage requirements.
(4) Deny a mother or her newborn eligibility, or continued
eligibility, to enroll or to renew coverage solely to avoid the
coverage requirements.
(5) Provide monetary payments or rebates to a mother to encourage
her to accept less than the minimum coverage requirements.
(6) Restrict inpatient benefits for the second day of hospital
care in a manner that is less than favorable to the mother or her
newborn than those provided during the preceding portion of the
hospital stay.
(7) Require the treating physician to obtain authorization from
the insurer prior to prescribing any services covered by this
section.
(b) (1) Every individual or group policy of disability insurance
that provides coverage for hospital, medical, and surgical benefits
shall include notice of the coverage specified in subdivision (a) in
the insurer's evidence of coverage or certificate of insurance for
evidences of coverage or certificates of insurance issued on or after
January 1, 1998.
(2) Every insurer that issues a policy of disability insurance
under paragraph (1) shall provide additional written notice to all
females between the ages of 10 and 50 who are covered under those
policies of the coverage under subdivision (a) within 60 days of the
effective date of this act. The insurer shall provide additional
written notice of the coverage specified in subdivision (a) during
the course of prenatal care if both of the following conditions are
met:
(A) The insurer previously notified policyholders that hospital
stays for delivery would be inconsistent with the requirement in
subparagraph (A) of paragraph (1) of subdivision (a).
(B) The insurer received notice, whether by receipt of a claim, a
request for preauthorization for pregnancy-related services, or other
actual notice that the insured is pregnant.
(c) Nothing in this section shall be construed to prohibit an
insurer from negotiating the level and type of reimbursement with a
provider for care provided in accordance with this section.
10123.88. (a) Every policy of disability insurance covering
hospital, medical, or surgical expenses that is issued, amended,
renewed, or delivered in this state on or after July 1, 1999, shall
cover reconstructive surgery, as defined in subdivision (c), that is
necessary to achieve the purposes specified in paragraphs (1) or (2)
of subdivision (c). Nothing in this section shall be construed to
require a policy to provide coverage for cosmetic surgery, as defined
in subdivision (d). This section shall only apply to health benefit
plans, as defined in subdivision (a) of Section 10198.6, except that
for accident only, specified disease, or hospital indemnity
insurance, coverage for benefits under this section shall apply to
the extent that the benefits are covered under the general terms and
conditions that apply to all other benefits under the policy.
Nothing in this section shall be construed as imposing a new benefit
mandate on accident only, specified disease, or hospital indemnity
insurance.
(b) No individual, other than a licensed physician competent to
evaluate the specific clinical issues involved in the care requested,
may deny initial requests for authorization of coverage for
treatment pursuant to this section. For a treatment authorization
request submitted by a podiatrist or an oral and maxillofacial
surgeon, the request may be reviewed by a similarly licensed
individual, competent to evaluate the specific clinical issues
involved in the care requested.
(c) "Reconstructive surgery" means surgery performed to correct or
repair abnormal structures of the body caused by congenital defects,
developmental abnormalities, trauma, infection, tumors, or disease
to do either of the following:
(1) To improve function.
(2) To create a normal appearance, to the extent possible.
(d) Nothing in this section shall be construed to require an
insurer to provide coverage for cosmetic surgery. "Cosmetic surgery"
means surgery that is performed to alter or reshape normal
structures of the body in order to improve the patient's appearance.
(e) In interpreting the definition of reconstructive surgery, an
insurer may utilize prior authorization and utilization review that
may include, but need not be limited to, any of the following:
(1) Denial of the proposed surgery if there is another more
appropriate surgical procedure that will be approved for the
enrollee.
(2) Denial of the proposed surgery or surgeries if the procedure
or procedures, in accordance with the standard of care as practiced
by physicians specializing in reconstructive surgery, offer only a
minimal improvement in the appearance of the enrollee.
(3) Denial of payment for procedures performed without prior
authorization.
10123.89. (a) On and after July 1, 2000, every policy of disability
insurance issued, amended, delivered, or renewed in this state that
provides coverage for hospital, medical, or surgical expenses shall
provide coverage for the testing and treatment of phenylketonuria
(PKU) under the terms and conditions of the policy.
(b) Coverage for treatment of phenylketonuria (PKU) shall include
those formulas and special food products that are part of a diet
prescribed by a licensed physician and managed by a health care
professional in consultation with a physician who specializes in the
treatment of metabolic disease and who participates in or is
authorized by the insurer, provided that the diet is deemed medically
necessary to avert the development of serious physical or mental
disabilities or to promote normal development or function as a
consequence of phenylketonuria (PKU).
(c) Coverage pursuant to this section is not required except to
the extent that the cost of necessary formulas and special food
products exceeds the cost of a normal diet.
(d) For purposes of this section, the following definitions shall
apply:
(1) "Formula" means an enteral product or enteral products for use
at home that are prescribed by a physician or nurse practitioner, or
ordered by a registered dietician upon referral by a health care
provider authorized to prescribe dietary treatments, as medically
necessary for the treatment of phenylketonuria (PKU).
(2) "Special food product" means a food product that is both of
the following:
(A) Prescribed by a physician or nurse practitioner for the
treatment of phenylketonuria (PKU) and is consistent with the
recommendations and best practices of qualified health professionals
with expertise germane to, and experience in the treatment and care
of, phenylketonuria (PKU). It does not include a food that is
naturally low in protein, but may include a food product that is
specially formulated to have less than one gram of protein per
serving.
(B) Used in place of normal food products, such as grocery store
foods, used by the general population.
(e) This section shall not apply to vision-only, dental-only,
accident-only, specified disease, hospital indemnity, Medicare
supplement, long-term care, or disability income insurance, except
that for accident only, specified disease, or hospital indemnity
coverage, coverage for benefits under this section shall apply to the
extent that the benefits are covered under the general terms and
conditions that apply to all other benefits under the policy or
contract. Nothing in this section shall be construed as imposing a
new benefit mandate on accident only, specified disease, or hospital
indemnity insurance.
10123.9. On and after January 1, 1980, every group policy of
disability insurance which covers hospital, medical, or surgical
expenses on a group basis, and which offers maternity coverage in
such groups, shall also offer coverage for prenatal diagnosis of
genetic disorders of the fetus by means of diagnostic procedures in
cases of high-risk pregnancy. Such coverage shall be offered under
such terms and conditions as may be agreed upon between the insurer
and the group policyholder. Every group policy of disability
insurance shall communicate the availability of such coverage to all
group policyholders and to all groups with whom they are negotiating.
10123.10. (a) Every disability insurer transacting business in this
state shall, on or after January 1, 1979, make available and offer
to include in every group disability policy providing hospital,
medical or surgical expense benefits payable on an expense incurred
basis, to be delivered or issued for delivery in this state, benefits
for home health care as set forth in this section provided by a
licensed home health agency subject to the right of the group
policyholder to reject the benefits or to select any alternative
level of benefits as may be offered by the insurer.
In rural areas where there are no licensed health agencies or in
which the supply of home health agency services does not meet the
needs of the community, the services of visiting nurses, if
available, may be substituted for the services of the home health
agency, subject to the terms and conditions set forth in subdivision
(c).
(b) Every self-insured employee welfare benefit plan containing
hospital, medical, or surgical expense benefits or service benefits
delivered on or after January 1, 1979, shall make available and offer
to include benefits for home health care as set forth in this
section provided by a licensed home health agency subject to the
right of the employer or the employee organization to reject the
benefits or accept any alternative level of benefits as may be
offered by the self-insured welfare benefit plan.
In rural areas where there are no licensed health agencies or in
which the supply of home health agency services does not meet the
needs of the community, the services of visiting nurses, if
available, may be substituted for the services of the home health
agency, subject to the terms and conditions set forth in subdivision
(c).
(c) As used in this section:
(1) "Home health care" means the continued care and treatment of
an insured person who is under the direct care and supervision of a
physician but only if (i) continued hospitalization would have been
required if home health care were not provided, (ii) the home health
treatment plan is established and approved by a physician within 14
days after an inpatient hospital confinement has ended and such
treatment plan is for the same or related condition for which the
insured person was hospitalized, and (iii) home health care commences
within 14 days after the hospital confinement has ended. "Home
health services" consist of, but shall not be limited to, the
following: (i) part-time or intermittent skilled nursing services
provided by a registered nurse or licensed vocational nurse; (ii)
part-time or intermitent home health aide services which provide
supportive services in the home under the supervision of a registered
nurse or a physical, speech or occupational therapist; (iii)
physical, occupational or speech therapy; and (iv) medical supplies,
drugs and medicines prescribed by a physician and related
pharmaceutical services, and laboratory services to the extent such
charges or costs would have been covered under the policy if the
insured person had remained in the hospital.
(2) "Home health agency" means a public or private agency or
organization licensed by the State Department of Health Services in
accordance with the provisions of Chapter 8 (commencing with Section
1725) of Division 2 of the Health and Safety Code.
(d) The policy may contain a limitation on the number of home
health visits for which benefits are payable, but the number of such
visits shall not be less than 100 in any calendar year or in any
continuous 12-month period for each person covered under the policy.
Except for a home health aide, each visit by a representative of a
home health agency shall be considered as one home health visit. A
visit of four hours or less by a home health aide shall be considered
as one home health visit.
(e) Home health care benefits may be subject to an annual
deductible of not more than fifty dollars ($50) for each person
covered under a policy, and may be subject to a coinsurance provision
which provides coverage of not less than 80 percent of the
reasonable charges for such services.
(f) Nothing in this section shall preclude an insurer or plan
offering other health care benefits provided in the home.
10123.11. (a) No insurer shall deny a claim under a group
disability policy for hospital, medical, surgical, dental, or
optometric services for the sole reason that the individual served
was confined in a city or county jail as a prisoner, or was a
juvenile detained in any facility if such individual is otherwise
entitled to benefits under such group disability policy and incurs
expense for the services so provided during confinement. This
provision shall apply to any group disability policy entered into or
renewed on or after July 1, 1980, whether or not such policy contains
any provision terminating benefits under such policy upon an
individual's confinement in a city or county jail or juvenile
detention facility.
(b) No self-insured employee welfare benefit plan shall deny a
claim under a plan for hospital, medical, surgical, dental, or
optometric services for the reason that the individual served was
confined in a city or county jail as a prisoner, or was a juvenile
detained in any facility, if such individual is otherwise entitled to
benefits under such plan and incurs expense for the services so
provided during confinement. This provision shall apply to any
self-insured employee welfare benefit plan entered into or renewed on
or after July 1, 1980, whether or not such plan contains any
provision terminating benefits under such plan upon an individual's
confinement in a city or county jail or juvenile detention facility.
10123.12. Every disability insurer, including those insurers which
contract for alternative rates of payment pursuant to Section 10133,
and every self-insured employee welfare benefit plan, which will
affect the choice of physician, hospital, or other health care
providers shall include within its disclosure form and within its
evidence or certificate of coverage a statem