Mexican prepaid health plans.

Plain English Breakdown

The official source material does not explicitly state that violations of the bill's provisions would be considered criminal offenses, though it implies this by referencing existing law.

Mexican Prepaid Health Plans

AB-955 modifies the requirements for prepaid health plans from Mexico to operate in California, allowing them to offer coverage to individuals legally employed in San Diego or Imperial counties regardless of nationality and increasing financial standards.

What This Bill Does

• Allows prepaid health plans from Mexico to sell employer-sponsored group plan contracts to individuals legally employed in San Diego or Imperial counties, including their dependents, regardless of nationality.
• Requires these plans to provide alternative health care coverage through a full-service health care service plan or a health insurance policy.
• Increases the financial requirement for prepaid health plans from $1 million to $2.3 million in tangible net equity or an acceptable alternative reimbursement arrangement.

Who It Names or Affects

• Prepaid health plans operating lawfully under Mexican laws and seeking licensure in California.
• Employers in San Diego and Imperial counties who provide health care coverage to their employees.
• Individuals legally employed in San Diego or Imperial counties, including their dependents.

Terms To Know

Tangible Net Equity

The value of a company's assets minus its liabilities, excluding intangible assets like patents and trademarks.

Prepaid Health Plan

A type of health insurance where members pay a fixed amount in advance to receive healthcare services from participating providers.

Limits and Unknowns

• The bill does not specify how the increased financial requirement will be enforced or monitored.
• It is unclear what specific alternative reimbursement arrangements are acceptable under the new requirements.

Official Summary Text

AB 955, as amended, Alvarez.
Mexican prepaid health
plans: individual market.
plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime.
Existing law requires a prepaid health plan to apply for licensure as a health care service plan if the prepaid health plan operating lawfully under the laws of Mexico elects to operate a health care service plan in this state. Existing law requires the application for licensure to demonstrate compliance with specified requirements, including that the prepaid health plan offers and sells in this state only employer-sponsored group plan contracts exclusively for the benefit of Mexican nationals legally employed in the County of San Diego or the County of Imperial, and their dependents, that pay for the delivery of
health care services that are provided wholly in Mexico, except as specified.
Existing law also requires the application for licensure to demonstrate that the prepaid health plan maintains a tangible net equity of at least $1,000,000 or to demonstrate a reasonable acceptable alternative reimbursement arrangement that the Director of the Department of Managed Health Care is authorized, in the director’s discretion, to accept.
This bill would modify the above-described requirement that a prepaid health plan offers and sells in this state only employer-sponsored group plan contracts exclusively for the benefit of specified Mexican nationals to additionally include employer-sponsored group plan contracts for the benefit of individuals legally employed in the County of San Diego or the County of Imperial, and for the benefit of their dependents regardless of
nationality. The bill would authorize a prepaid health plan operating lawfully under the laws of Mexico that is licensed to operate a health care service plan to offer and sell that employer-sponsored group plan contract only to an employer that provides alternative health care coverage through either a specified full-service health care service plan or a health insurance policy.
By adding a new requirement for a specified prepaid health plan operating a health
care service plan in this state to comply with, the violation of which is a crime,
The bill would modify the above-described requirement that a prepaid health plan maintains a tangible net equity of at least $1,000,000 to instead require a prepaid health plan to maintain a tangible net equity of at least $2,300,000 or to demonstrate an alternative reimbursement arrangement subject to the director’s discretion, as described above. Because a willful violation of these provisions by a prepaid health plan, as described above, would be a crime,
the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Current Bill Text

Download Bill PDF