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 599.508 - Minimum Standards for Health Benefits Plans

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) To be qualified to be approved or adopted
					 by the Board, a health benefits plan must:
(1)
					 Comply with the Public Employees' Medical and Hospital Care Act and this
					 subchapter, as amended from time to time.
(2) Accept enrollment, in accordance with
					 this subchapter, without regard to physical condition, age, ethnic origin,
					 religion or sex at the time of original group enrollment, of all eligible
					 employees or annuitants, except that plans which are sponsored by employee
					 organizations need not accept enrollment of persons who are not members of the
					 organization.
(3) Extend to all
					 employees, annuitants and family members who are eligible therefor the right,
					 during the time allowed, to convert to a contract for health benefits regularly
					 offered by the carrier, or an appropriate affiliate, for group conversion
					 purposes. Such contract must, at the option of the employee, annuitant or
					 family member, be continued in effect by the carrier except for fraud or
					 nonpayment of contractual charges.
The contract shall, upon conversion, become effective as
						of the day following the date of termination of coverage, and the employee or
						annuitant shall pay the entire cost thereof directly to the carrier. The
						nongroup contract may not deny or delay any benefit that it provides for a
						person converting from a plan approved under this subchapter, except to the
						extent that benefits are continued under the health benefits plan from which he
						or she converts.
The Board may request an extension of time for conversion
						because of delayed determination of ineligibility for service retirement or
						disability retirement, in which case conversion must be permitted until the
						date specified by the Board in its request for extension.
Any such conversion contract may provide for an
						adjustment of benefits with respect to any covered person at such age as he or
						she becomes eligible to participate in benefits provided under either Part A or
						Part B of Title XVIII, Social Security Act.
(4)
(A)
					 Provide that any person, whether employee, annuitant, or family member, whose
					 enrollment terminates other than by voluntary cancellation or termination of
					 the group agreement, and who, on the day of termination is hospitalized, shall
					 be granted a continuation of the benefits of the plan with respect to medical
					 conditions that were present or preexisting at the time of hospitalization or
					 occurred during the hospitalization and which require continued
					 hospitalization, but not beyond the 91st day following the
					 termination.
(B) Provide that any
					 person, whether employee, annuitant, or family member, whose enrollment has
					 been changed from one plan to another and who on the effective date of such
					 change is hospitalized, shall be granted a continuation of the benefits of the
					 prior plan with respect to medical conditions that were present or pre-existing
					 at the time of hospitalization or occurred during the hospitalization and which
					 require continued hospitalization, but not beyond the 91st day following the
					 last day of enrollment in the prior plan. Upon change of enrollment to the plan
					 of a person so hospitalized on the effective date of the change, benefits with
					 respect to the cause of such hospitalization shall not be paid or provided
					 while that person is entitled to continuance of benefits under the prior plan,
					 but all other benefits will be paid during such period.
(C) Provide that any person whether employee,
					 annuitant or family member who is totally disabled on the date of termination
					 of the group contract, shall be granted a continuation of the benefits of the
					 plan with respect to the cause of such total disability for up to 12 months
					 after the date of termination, subject to plan maximums and
					 provisions.
(5) Provide
					 that each employee and annuitant who enrolls in a plan receive evidence of
					 enrollment in a form to be approved by the Board, summarizing the conditions of
					 the plan including but not limited to, those concerning benefits, claims, and
					 payment of claims.
(6) Provide a
					 standard rate structure which contains one standard individual rate, one
					 standard rate for employees and annuitants with one dependent, and one standard
					 rate for employees and annuitants with two or more dependents, without
					 geographical or other variation. Notwithstanding the foregoing, and subject to
					 the approval of the Board, a health benefits plan may charge contracting agency
					 employees and annuitants rates that are based on regional variations in the
					 costs of health care services.
(7)
					 Maintain statistical records regarding the plan as are agreed to by the Board,
					 separately from those of any other activities or benefits conducted or offered
					 by the carrier administering the plan, so as to reveal the utilization of
					 benefits under the plan, the gross and net cost of such benefits, and the
					 administrative cost experienced under the plan as it pertains to employees and
					 annuitants enrolled under this subchapter.
(8) Subject to the Board's authority to risk
					 adjust health benefit plan premiums, and upon its approval to exercise this
					 authority, participate in the risk adjustment methodology approved by the
					 system. The system will select a risk adjustment methodology that is consistent
					 with industry best practices and similar to those used by the United States
					 Department of Health and Human Services and other state and federal agencies.
					 The methodology will be provided at least 90 days prior to the public
					 announcement of premiums for the next plan year.
(A) The annual health benefit plan premiums
					 adopted by the Board for each plan year may be risk adjusted utilizing the risk
					 assessment method selected by the system.
(B) Upon implementation of a risk adjustment
					 methodology, the Board may phase in its resulting health benefit plan premium
					 adjustments for up to three years if the adjustments result in at least one
					 individual plan premium increase or decrease of at least ten percent.
(C) The paragraph shall not apply to a
					 Medicare health benefit plan, as defined in Section
					 22778 of
					 the Government Code, or an employee association health benefit plan subject to
					 Board approval pursuant to Section
					 22850 of
					 the Government Code.
(9)
					 Provide that in the event an employee or annuitant is dissatisfied with the
					 amount paid or service rendered pursuant to his or her claim on his or her
					 behalf or on behalf of a family member and so requests, representatives of the
					 parties including a representative of the Board will confer in an effort to
					 reach a settlement, provided that no agreement reached by such conferees shall
					 bind the employee, annuitant, or carrier without each party's consent or bar
					 any remedy otherwise available.