California Code of Regulations › Title 2 - Administration › Division 1 - Administrative Personnel › Chapter 2 - Board of Administration of Public Employees' Retirement System › Subchapter 3 - Public Employees' Medical and Hospital Care Act Regulations › Article 1 - Definitions, Coverage, Enrollment, Conversion, Minimum Standards, Alternative Benefit Plans, Contributions, Contingency Reserve Fund, Contracting Agency Participation and Medicare Part B › Section 599.509 - Minimum Standards for Health Benefits Carriers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A health benefits plan will not be approved by the Board
						unless the carrier of the plan meets, in addition to the requirements of the
						Public Employees' Medical and Hospital Care Act, the following additional
						requirements:
(a) It must be lawfully
					 engaged in the business of supplying health benefits.
(b) It must have, in the judgment of the
					 Board, the financial resources, organizational facilities and experience in the
					 field of health benefits to carry out its obligations under the plan.
In the case of carriers for service benefit plans and
						indemnity benefit plans, the Board in forming its judgment shall be guided by
						such factors as the length of time the carrier has been in the prepaid health
						benefits field, the capacity of the carrier to effectively service claims of
						enrolled employees and annuitants throughout the State, the general financial
						stability of the carrier as exhibited by examinations of the State Insurance
						Commissioner or other regulatory bodies, and the extent to which the carrier
						underwrites other prepaid health benefits plans in California.
In the case of carriers for group practice prepayment
						plans, the Board in forming its judgment shall be guided by such factors as the
						number of physicians practicing in the group, the number of physicians
						practicing in the group as specialists and their qualifications, the proportion
						of the group's income which is derived from prepayment as opposed to
						fee-for-service, the extent to which the group utilizes outside consultants,
						the extent to which ancillary and other related services, both in and out of
						the hospital, are available in the group, the stability of the group's finances
						and organization, and the potential for enrollment of employees and annuitants
						under the plan as well as the plan's capacity for servicing such potential
						enrollees including a demonstrated commitment to cost containment, innovative
						services, effectiveness of utilization review, and success in achieving market
						penetration.
In the case of carriers for individual practice
						prepayment plans, the Board in forming its judgment shall be guided by such
						factors as the number of physicians participating in the plan, the number of
						physicians practicing as specialists and their qualifications, the extent to
						which ancillary and other related services, both in and out of the hospital,
						are covered, the stability of the plan, finances and organization of the plan,
						the plan's financial responsibility, and the potential for enrollment of
						employees and annuitants under the plan, as well as the plan's capacity for
						servicing such potential enrollees including a demonstrated commitment to cost
						containment, innovative services, effectiveness of utilization review, and
						success in achieving market penetration.
(c) It must agree to keep such reasonable
					 financial and statistical records and furnish such reasonable financial and
					 statistical reports with respect to the plan as may be requested by the Board,
					 which may include but is not limited to:
(1)
					 Number of persons enrolled under the plan, by employee, annuitant, and family
					 coverage.
(2) Contributions
					 received from such employees and annuitants, and the employer.
(3) Claims incurred on behalf of such
					 employees and annuitants, including health benefits payments made, or services
					 rendered, by employee, annuitant, and family coverage.
(4) Expense and risk or other retention
					 charges.
(5) Reserves established
					 under the plan.