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6 years ago · by · 0 comments

Business Owners Policies (BOPs)

Business owners have a lot to consider when choosing insurance that fully protects their business. One coverage option, a business owners policy (BOP), can take the guesswork out of the process. A BOP bundles several types of coverage in one package, similar to the way a homeowners policy works, but is designed for small and midsized businesses.

BOP Key Features

A BOP generally combines the following types of coverage in one convenient bundle:

  • Commercial property insurance—Covers losses to property from common perils. It also covers office equipment, furniture, inventory, machinery, raw materials, computers and anything else that is vital to business operations.
  • General liability insurance—Covers a company’s legal responsibility for any harm it may cause to others, up to the policy limit. It also covers attorney fees and medical bills for anyone injured by the company.
  • Business interruption insurance—Reimburses for loss of income if a covered disaster interferes with the successful operation of the business.

Exclusions

Although a BOP is a convenient insurance option for small to midsized business owners, it does not cover professional liability, auto insurance and workers’ compensation. Workers’ life, health and disability coverage is also excluded. For those exclusions, business owners can purchase separate insurance policies. Other examples include the following:  

  • Crime coverage—Although it is minimal, crime coverage can be added to a BOP to cover losses as a result of crime, such as employee dishonesty and computer fraud. Typical crime coverage ranges between $1,000 and $5,000.
  • Data breach coverage—This coverage is commonly added to BOPs to help remedy the following losses resulting from data breaches:
    • Notifying impacted individuals
    • Hiring crisis communication consultants
    • Defense and settlement costs from associated lawsuits
    • Replacement of lost income
    • Extortion and ransom payments
  • Errors and omissions (E&O) coverage—Businesses that provide services for a fee can be sued by customers who claim that they were harmed because the business failed to perform its job properly. E&O coverage pays for any judgment for which the insured is found legally liable, up to the policy limit. It also covers legal defense costs.

Ideal Candidates for a BOP

Businesses that have the following characteristics are ideal candidates for a BOP:   

  • Operate in a physical location, whether home-based or outside the home
  • Have assets that can be stolen, including products, cash, furniture and digital property
  • Are at a high risk for lawsuits
  • Employ less than 100 employees and have less $5 million in sales

The following types of businesses frequently purchase BOPs to protect from losses not covered by general liability insurance:

  • Manufacturers
  • Religious organizations
  • Apartments
  • Restaurants
  • Technology consultants and solutions providers
  • Wholesalers
  • Retailers

Eligibility

Small to midsized businesses need to meet specific criteria to be eligible for a BOP. When determining eligibility, insurers consider factors that include the type of business, size of its primary location, class of business and revenue. 

Premiums for BOP policies are based on eligibility factors, as well as financial stability, building construction, security features and fire hazards.

When purchasing business insurance, it is important to obtain the right amount. Contact Scurich Insurance for guidance as to whether a BOP is a logical choice for your business.

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6 years ago · by · 0 comments

Disaster Donation Scams

Make Sure Your Donations Reach the Right Cause

The damage caused by Hurricane Harvey is prompting people to help in whatever ways they can. Unfortunately, there are dishonest people who prey upon people’s good intentions, creating fake charity campaigns to exploit victims and take advantage of those who want to help.

Disaster Donation Scams

Despite the sense of urgency to help when disaster strikes, it’s important to do some research before donating. Use these tips to make sure your money reaches the right cause:

  • Never wire money to someone who claims to be a charity. Legitimate charities don’t ask for wire transfers.
  • Be cautious about bloggers and social media posts that provide charity suggestions.
  • Only donate through a charity’s official website, and never through emails.
  • Ensure that the charity explains on its website how your money will be used.
  • Be wary of charities that claim to give 100 percent of donations to victims. Well-structured organizations need to use some of their donations to cover administrative costs.
  • Never offer unnecessary personal information. However, it’s common for legitimate charities to ask for your mailing address.

Helpful Hints

Donors looking for a worthy charity can access an unbiased, objective list on a website called Charity Navigator. The site receives a Form 990 for all of its charities directly from the IRS, so it knows exactly how the charities spend their money and use their donations. It also rates charities based on their location, tax status, length of operation, accountability, transparency and public support.

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6 years ago · by · 0 comments

Final Forms for 2017 ACA Reporting Released

Final Forms for 2017 ACA Reporting Released

On Sept. 28, 2017, the Internal Revenue Service (IRS) released final 2017 forms for reporting under Internal Revenue Code (Code) Sections 6055 and 6056.

  • 2017 Forms 1094-C and 1095-C are used by applicable large employers (ALEs) to report under Section 6056, as well as for combined Section 6055 and 6056 reporting by ALEs who sponsor self-insured plans. Related draft instructions were released on Aug. 31, 2017, and have not been finalized at this time.
  • 2017 Forms 1094-B and 1095-B are used by entities reporting under Section 6055, including self-insured plan sponsors that are not ALEs. Related draft instructions were released on Aug. 31, 2017, and have not been finalized at this time.

The 2017 forms are substantially similar to the 2016 versions, except that sections related to expired Section 4980H Transition Relief were removed.

ACTION STEPS

Employers should become familiar with the revisions to the forms, and prepare to file these final versions in early 2018.

Background

The Affordable Care Act (ACA) created reporting requirements under Code Sections 6055 and 6056. Under these rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) or provide to their employees. Each reporting entity must annually file all of the following with the IRS:

  • A separate statement (Form 1095-B or Form 1095-C) for each individual who is provided with minimum essential coverage (for providers reporting under Section 6055), or for each full-time employee (for ALEs reporting under Section 6056); and
  • A transmittal form (Form 1094-B or Form 1094-C) for all of the returns filed for a given calendar year.

Reporting entities must also furnish related statements (Form 1095-B or 1095-C, or a substitute form) to individuals.

Forms must generally be filed with the IRS no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. Individual statements must be furnished to individuals on or before Jan. 31 of the year immediately following the calendar year to which the statements relate.

2017 Forms and Instructions

The 2017 forms, as well as the 2017 draft instructions, are substantially similar to the 2016 versions. However, note the following changes:

  • Section 4980H Transition Relief. Several forms of transition relief were available to some employers under Section 4980H for the 2015 plan year (including any portion of the 2015 plan year that fell in 2016). However, no Section 4980H transition relief is available for 2017. As a result, the 2017 draft instructions for Forms 1094-C and 1095-C were revised to remove references to Section 4980H transition relief. In addition, Form 1094-C has been revised to remove references to this transition relief. Specifically, the following two sections on Form 1094-C related to this transition relief have been designated as “Reserved” and should not be used: Part II, in the “Certifications of Eligibility” Section on Line 22, Box C; and Part III, in the “ALE Member Information – Monthly” table, column (e).
  • Instructions for Recipient. Both individual statements (Forms 1095-B and 1095-C) include an “Instructions for Recipient” section. On both of the 2017 Forms 1095-B and 1095-C, the following paragraph was added: “Additional information. For additional information about the tax provisions of the Affordable Care Act (ACA), including the individual shared responsibility provisions, the premium tax credit, and the employer shared responsibility provisions, see www.irs.gov/Affordable-Care-Act/Individuals-and-Families or call the IRS Healthcare Hotline for ACA questions (1-800-919-0452).”
  • Updated Penalty Amounts. Both sets of 2017 draft instructions include updated penalty amounts for failures to file returns and furnish statements in 2017. The adjusted penalty amount is $260 per violation, with an annual maximum of $3,218,500 (up from a maximum of $3,193,000, for 2016).
  • Code Series 2 (Section 4980H Safe Harbor Codes and Other Relief). The 2017 draft instructions for Forms 1094-C and 1095-C clarify that there is no specific code to enter on line 16 to indicate that a full-time employee who was offered coverage either did not enroll or waived the coverage.
  • Corrected Forms 1095-C. The 2017 draft instructions for Forms 1094-C and 1095-C include additional information for employers that have errors on Forms 1095-C. Specifically, the draft instructions indicate that Forms 1095-C filed with incorrect dollar amounts on line 15, Employee Required Contribution, may fall under a safe harbor for certain de minimis errors. The safe harbor generally applies if no single amount in error differs from the correct amount by more than $100. If the safe harbor applies, employers will not have to correct Form 1095-C to avoid penalties. However, if the recipient elects for the safe harbor not to apply, the employer may have to issue a corrected Form 1095-C to avoid penalties. For more information, see Notice 2017-9.
  • Reporting Catastrophic Coverage for 2017. The 2017 draft instructions for Forms 1094-B and 1095-B clarify that reporting for catastrophic coverage enrolled in through the Exchange remains optional for 2017. It was expected that health insurance issuers and carriers would be required to report this coverage beginning in 2017. However, the instructions clarify that reporting of catastrophic coverage enrolled in through the Exchange will remain optional for coverage in 2017 (filing in 2018).
  • Formatting Returns Filed with the IRS. Both sets of 2017 draft instructions clarify that all returns filed with the IRS must be printed in landscape format.

In addition, a prior draft version of Form 1095-C for 2017 clarified that the “Plan Start Month” box in Part II of Form 1095-C will remain optional for 2017. The draft instructions for Forms 1094-C and 1095-C indicate that this box may be mandatory for the 2018 Form 1095-C.

Although the forms have been finalized for 2017 reporting, keep in mind that the IRS may include additional clarifications in the final instructions, once those are released.

Additional Resources

The 2016 versions of these forms are also available on the IRS website:

These forms must have been filed with the IRS no later than Feb. 28, 2017 (March 31, 2017, if filing electronically). However, the IRS extended the due date for furnishing individual statements for 2016 an extra 30 days, from Jan. 31, 2017, to March 2, 2017. The IRS does not anticipate extending the filing or furnishing deadlines for 2017 reporting.

According to the IRS, information returns under Sections 6055 and 6056 may continue to be filed after the filing deadline (both on paper and electronically). Employers that missed the filing deadline should continue to make efforts to file their returns as soon as possible.

The IRS also previously released:

More Information

Please contact Scurich Insurance for more information on reporting under Code Sections 6055 and 6056.

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6 years ago · by · 0 comments

California Workers Compensation – Employer Responsibilities

Workers’ compensation is a system of no-fault insurance that provides medical and monetary benefits to employees or their survivors for work-related injuries, diseases and deaths.

The California Workers’ Compensation Act (WCA) defines employer responsibilities under the state’s workers’ compensation program. The Division of Workers’ Compensation (DWC) of the California Department of Industrial Relations monitors and enforces employers’ compliance with these requirements throughout the state.

Coverage Requirements

Almost all California employers must secure workers’ compensation coverage for their employees. The WCA defines an employee as any individual working for another individual or organization who is not an independent contractor. Employers are bound by WCA coverage requirements even if they only have one employee, regardless of whether the employee works full-time or part-time.

Coverage requirements also apply for temporary workers. Temporary employment agencies, employment referral services, labor contractors and any other similar entities hiring temporary workers are solely responsible for their employees’ coverage.

To meet coverage requirements, employers can either secure a workers’ compensation insurance policy from a private insurance company licensed to do business in California or apply for self-insurance certification with the Office of Self Insurance Plans (OSIP).

Self-Insurance

A self-insured employer uses its assets, rather than an insurance policy provided by an insurance carrier, to cover its obligations under the workers’ compensation program. Employers that wish to self-insure must obtain authorization from the OSIP. Whether the OSIP will grant this authorization depends on an employer’s financial strength, proposed benefit delivery system and loss prevention program. To qualify, an employer must:

  • Have at least $5 million in shareholder equity;
  • Have net profits of $500,000 or more for the five years immediately prior to the application;
  • Make a deposit based on the employer’s expected future liabilities, with a minimum amount of $220,000;
  • Hire a certified third-party administrator or ensure that internal staff becomes OSIP-certified to process and handle benefit claims; and
  • Provide the following documents:
    • Certified, independently-audited financial statements; and
    • A proposed injury and illness prevention program that meets, at a minimum, Cal/OHSA safety and health regulations.

Self-insured employers are subject to audits by both the DWC and OSIP. These audits are used to verify that self-insured employers are making benefits payments promptly and properly.

Certain employers are not allowed to self-insure. These employers include:

  • Professional employer organizations;
  • Leasing employers;
  • Temporary service employers;
  • Any employer in the business of providing employees to other employers; and
  • Employers that have allowed their coverage to lapse (unless they receive authorization from the DWC).

Group Self-insurance

Multiple employers can create self-insurance groups by combining their assets to insure against their individual liabilities. Authorization for group self-insurance requires employer groups to show they have sufficient financial stability to meet all their obligations under the WCA. In addition, a group of employers seeking to self-insure must:

  • Operate in the same industry;
  • Make a deposit equal to 135 percent of its estimated future liabilities;
  • Have sufficient funds to cover any losses and administrative expenses for at least eight of out of 10 years;
  • Obtain excess insurance for claims over $500,000; and
  • Report to each member of the group any possible conflict of interest between the group and any vendors.

Self-insurance Annual Renewal

Self-insured employers must submit annual reports to show their continued compliance with eligibility requirements. These reports are also used to assess the adequacy of each self-insurance deposit.

Employers that are required to deposit additional funds to their initial deposit must make their contributions within 60 days of filing their annual report or by May 1 of the year in question, whichever is comes first.

COVERAGE NOTICE REQUIREMENTS

Employers subject to the WCA must display a notice in a conspicuous place stating that they have workers’ compensation insurance coverage that complies with the WCA. Failing to display this notice constitutes a misdemeanor and may be considered evidence that the employer does not have insurance.

The coverage notice must be available in English and Spanish and must include specific information about the employee’s rights and obligations under the WCA. The DWC has issued a model poster that employers can use to fulfill these requirements.

An employer that fails to provide this notice must allow its employees to be treated by their physician of choice for any injuries that occur during the time the notice is not displayed.

In addition to the posting requirement, employers must provide the same information to new employees at the time of hiring (or by the end of their first pay period). New employees must also receive instructions on:

  • How to obtain appropriate medical care for job-related injuries;
  • The role and function of the primary treating physician; and
  • How to obtain and submit the form the employee must use to notify the employer he or she wants to use a personal physician.
  • If an employer is insured, the insurance carrier is responsible for providing the employer with copies of a notice that contains all the required information for new employees.

INJURY Reporting Requirements

Under the WCA, employers have reporting obligations any time an employee sustains a work-related condition that results in:

  • Lost work time beyond the employee’s work shift at the time of injury; or
  • Medical treatment beyond first aid.

For this purpose, “first aid” means any one-time treatment and any follow-up visit for observation of minor scratches, cuts, burns, splinters, or other minor industrial injuries that do not ordinarily require medical care. Treatment that meets this definition is still considered “first aid” even if it is provided by a medical professional.

Note: Effective Jan. 1, 2017, workers’ compensation insurance carriers are required to report all work-related injuries, including those that involve only first aid with no lost work time, to the California Workers’ Compensation Insurance Rating Bureau (WCIRB). The WCIRB uses this information to, among other things, help determine an employer’s premium rates for workers’ compensation insurance.

However, this change does not affect an employer’s injury-reporting obligations under the WCA. An employer may chose, but is still not required, to report injuries that do not result in lost work time or treatment beyond first aid.

When an employee incurs medical expenses for first aid, the billing medical provider has an obligation to report the treatment to both the DIR and the employer’s insurance carrier. The medical provider’s report (or an employer’s voluntary report of a first-aid-only injury for which no medical expenses are incurred) is what triggers an insurance carrier’s obligation to report the claim to the WCIRB under the new rule.

This reduces an insured employer’s incentive to pay medical bills for first-aid-only treatment out of pocket instead of allowing its workers’ compensation insurance carrier to cover the expenses, because these types of claims can now affect an employer’s premium rates regardless of how the first-aid treatment expenses are paid. �

Within one working day after an employer receives notice or first obtains knowledge of an employee’s work-related injury that results in lost work time or medical treatment beyond first aid, the employer must:

  • Provide the employee with Form DWC 1 (“Workers’ Compensation Claim Form & Notice of Potential Eligibility”);
  • Ask the employee to complete the employee section of form DWC 1 and return it to the employer;
  • Complete the employer section of the form; and
  • Within one working day after receiving the form back from the employee, submit the fully completed form to its insurance carrier (or directly to the DIR, if the employer is self-insured) and provide a copy to the employee.

In addition, employers must fill out Form DLSR 5020 (“Employer’s Report of Occupational Injury or Illness”) and send it to their insurance carriers or claims administrators within five days after first receiving notice or obtaining knowledge of an injury.

In the event that an employee becomes the victim of a crime while on an employer’s premises, the employer must provide written notice to the employee, within one day of the crime, stating that he or she is eligible for benefits resulting from physical and psychiatric injuries.

Reporting for self-insured employers

When employers secure coverage with a policy from an insurance company, the insurance company will work with the employer on preparing, maintaining and submitting reports and records that the DWC requires to monitor compliance with California law.

An employer that decides to self-insure, however, must meet certain reporting obligations on its own. One of these obligations is to file an annual report as prescribed by the DWC. Annual reports must show:

  • The amount of all compensation claims;
  • The amount of benefits paid to date;
  • An estimated amount of future liability on open claims under state and federal laws;
  • The average number of employees and the total wages for each adjusting location;
  • A list of all open indemnity claims; and
  • The amount of security deposit made by the employer.

MORE INFORMATION

Please see the DWC website or contact Scurich Insurance for more information on workers’ compensation laws in California.

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6 years ago · by · 0 comments

California Minimum Wage Laws

Federal minimum wage law is governed by the Fair Labor Standards Act (FLSA). The current federal minimum wage rate is $7.25 per hour for nonexempt employees. California law complements federal law and, in some cases, prescribes more stringent or additional requirements that employers must follow. Whenever employers are subject to both state and federal laws, the law most favorable to the employee will apply.

The Division of Labor Standards Enforcement (DLSE), part of the California Department of Industrial Relations, enforces and investigates minimum wage violation claims.

Minimum Wage Rate

The current minimum wage rate in California is $10 per hour. A separate minimum wage rate applies for sheepherders, equal to $1,777.98 per month. “Employee wages” are the entire amount of compensation an employee receives for his or her labor or services. Wages can be fixed or based on time, task, piece, commission or other method.

On April 4, 2016, Governor Jerry Brown signed a bill into law that will increase California’s minimum wage rate to $15 per hour by 2022.

New Minimum Wage Rate Implementation

The minimum wage increase will be phased in over several years in separate schedules for employers, depending on the employer’s workforce size.

Minimum Wage Rate

Effective Date

26 or more employees

25 or fewer employees

$10.50 per hour

N/A

Jan. 1, 2017

$11 per hour

$10.50 per hour

Jan. 1, 2018

$12 per hour

$11 per hour

Jan. 1, 2019

$13 per hour

$12 per hour

Jan. 1, 2020

$14 per hour

$13 per hour

Jan. 1, 2021

$15 per hour

$14 per hour

Jan. 1, 2022

Adjustment for inflation

$15 per hour

Jan. 1, 2023

Adjustment for inflation

Adjustment for inflation

Jan. 1, 2024

After the rates described above are implemented, the state will adjust the minimum wage rate annually to reflect the rising cost of inflation.

The law allows the governor to temporarily suspend the minimum wage rate increase schedule if the state’s economic condition does not support an increase. Under a temporary suspension, the implementation schedule would be delayed by one year. However, the governor may not implement a temporary suspension more than twice.


Lodging

Room (alone)

$47.03 per week

Room (shared)

$38.82 per week

Apartment

Two-thirds of ordinary rental value up to $564.81 per month

Apartment (couple)

Both individuals must work for the same employer.

Two-thirds of ordinary rental value, up to $835.49 per month

                                          Meals

Breakfast

$3.62

Lunch

$4.97

Dinner

$6.68

Meals and Lodging Credits

If the employee voluntarily agrees in writing, employers may generally include in employee wages part of the cost of meals and lodging they provide.

The adjacent table provides the maximum amount employers may credit for meals and lodging. Special rules exist for sheepherders and employees of organized camps.

  • Sheepherder wages cannot be offset by meal and lodging credits; and
  • Organized camps may deduct the entire value of meals and lodging from the salary of a student-employee, camp counselor or program counselor.

Refer to the wage orders mentioned below for more information on industry-specific meal and lodging credits.

Tipped Employees

In California, employers must pay tipped employees a wage rate equal to or greater than the state’s minimum wage rate. Employers may not deduct a tip credit from their employees’ wages. Tip payments include any tip, gratuity, money or other gift a patron gives an employee over and above the actual amount of the goods, food, drink, items or services the patron received from that business.

Employers cannot enter into contracts with their employers to override tipped employee regulations.

Subminimum Wage Rates

California law allows disabled workers, apprentices, learners, student-employees, camp counselors and program counselors to receive wage rates below the minimum state rate. In certain cases, a license may be required for a subminimum wage rate to apply. When a license is required, the DLSE may set the terms and conditions of employment. Licenses may be revoked if the employer violates any term or condition of employment set by the license.

Disabled Workers

Employers that obtain a special license issued by the DLSE may pay disabled workers a wage rate below the state’s minimum wage rate. Employers must generally obtain a separate license for each disabled employee. These licenses are valid for up to one year, and must be renewed on a yearly basis.

Nonprofit employers, including sheltered workshops and rehabilitation facilities, may receive a general license to employ disabled employees at subminimum wage rates, instead of individual licenses for each employee. Employers may be required to renew these licenses every year or on a more frequent basis.

Apprentices and Learners

The DLSE may also issue special licenses authorizing employers to pay subminimum wage rates as low as 85 percent of the state’s minimum wage rate to employees during their first 160 hours of employment in occupations in which they have no previous similar or related experience.

Organized Camps

Employers operating an organized camp can pay their student-employees, camp counselors and program counselors a minimum wage rate equal to 85 percent of the state minimum wage rate. These employers can also deduct the entire value of meals and lodging they provide to these employees.

Minimum Wage Rate Exemptions

California’s minimum wage rate requirements do not apply to certain occupations and industries. Separate specific minimum wage rate and payment requirements, described in a series of minimum wage orders, apply for these employees. Consult the wage orders below for information on affected industries:

Other exceptions to California’s minimum wage rate requirements include individuals who are closely related to their employer (parent, spouse or child) and outside sales personnel.

Notice and Postings

Employers are required to post and maintain updated information on the state’s minimum wage rate. The Industrial Welfare Commission (IWC) has provided a model poster that employers can use.

Employers covered by one of California’s industry-specific wage orders must also display a copy of the applicable wage order. These wage orders are available on the IWC’s website.

Prohibited Wage Discrimination

In general, the California Equal Pay Law prohibits employers from discriminating on the basis of sex in the payment of wages.

Subject to some limited exceptions, female and male employees are entitled to equal pay for substantially similar work. Substantially similar work is determined by evaluating the level of skill, effort, responsibility and performance under similar working conditions.

California’s Equal Pay Law allows employers to pay different wages for employees of opposite sex when the wages are based on:

  • A seniority system;
  • A merit system;
  • A system that measures earnings by quantity or quality of production; or
  • A differential based on any bona fide factor other than sex.

A bona fide factor other than sex, such as education, training or experience, exists only when the employer demonstrates that the factor is:

  • Not based on or derived from a sex-based differential in compensation
  • Job-related (with respect to the position in question); and
  • Consistent with a business necessity.

“Business necessity” means an overriding legitimate business purpose. Business necessity does not exist when the employee can demonstrate that the employer could have implemented or used an existing alternative practice that would avoid a wage differential while serving the same business purpose.

Penalties

Criminal, civil and administrative penalties may apply for violations of California’s minimum wage laws.

Criminal Penalties

Employers that violate California’s minimum wage laws commit a misdemeanor, punishable by a fine of at least $100, imprisonment for at least 30 days or both a fine and imprisonment. Employers that violate tipped employee regulations also commit a misdemeanor, punishable by a fine of up to $1,000, imprisonment for up to 60 days or both.

Civil Penalties

Employers that pay wages below the state minimum wage rate or that violate California’s equal pay laws are subject to civil lawsuits, and could be ordered to pay:

  • The difference between what an employee’s wages should have been and what they actually were (plus interest);
  • Liquidated damages (in an amount equal to the wage difference plus interest); and
  • Court costs and reasonable attorneys’ fees.

Employers may avoid paying liquidated damages if they can prove that their actions were in good faith.

Employee lawsuits must be filed within two years of when the violation takes place (or within three years, for willful violations). In the case of any wilful violation, the DLSE can request and obtain injunctions against any further violations.

The identity of any employee that files a complaint for wage discrimination with the DLSE will remain confidential during an investigation and will not be disclosed until the validity of the claim is established.

Administrative Penalties

In addition to the civil penalties described above, the DLSE may issue citations for any employer that violates the state’s minimum wage laws. Cited employers may be subject to fines as follows:

  • $100 per underpaid employee for each pay period in which the employee is underpaid, for a first offense; and
  • $250 per underpaid employee for each pay period in which the employee is underpaid, for a second or subsequent violation.

Employers can appeal these fines by requesting a hearing within 15 days of receiving the citation.

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6 years ago · by · 0 comments

California Health Insurance Mandates

State health insurance mandates are laws regulating the terms of coverage for insured health plans. Mandates can affect various parts of health insurance plans as follows:

  • Benefit mandates require health insurance plans to cover specific treatments, services or procedures. In some cases, however, benefit mandates require issuers to offer coverage for specific treatments, services or procedures to employers for purchase.
  • Provider mandates require health insurance plans to pay for services provided by specific health care professionals. Often, provider mandates are in the form of nondiscrimination mandates that require coverage only if the health plan already reimburses services within the scope of the health care professional’s practice.
  • Person mandates require health insurance plans to cover specific categories of people.

Additional mandates for health plans exist at the federal level. For instance, effective for plan years beginning on or after Jan. 1, 2014, the Affordable Care Act (ACA) requires non-grandfathered plans in the small group and individual markets to provide coverage for items and services designated as “essential health benefits.” Health plan sponsors and issuers should work with their advisors to determine how to comply with applicable federal and state mandates.

California has a divided legal and regulatory system for health insurance plans. The Department of Managed Health Care (DMHC) regulates health care service plans, which include managed care plans such as health maintenance organizations (HMOs) and certain preferred provider organizations (PPOs). The California Department of Insurance (CDI) regulates health insurance policies.

This Employment Law Summary contains a chart outlining California’s benefit, provider and person mandates for insured group health plans. Please keep in mind that the following chart does not address federal benefit mandates, such as the ACA’s mandates.

BENEFIT MANDATES

Acupuncture

Health insurance policies must offer coverage for expenses incurred as a result of treatment by acupuncturists. Mandate to offer coverage also applies to health care service plans, except health maintenance organizations (HMOs).

Alcoholism Treatment

Health insurance policies and health care service plans must offer coverage for the treatment of alcoholism.

Asthma Management (Pediatric)

Health care service plans that cover outpatient prescription drugs must include coverage for the following when medically necessary for the management and treatment of pediatric asthma:

  • Inhaler spacers;
  • Nebulizers, including face masks and tubing; and
  • Peak flow meters.

Education for pediatric asthma must be consistent with current professional medical practice. These pediatric asthma benefits must be provided under the same general terms and conditions, including copayments and deductibles, applicable to all other benefits provided by the plan.
Behavioral Health Treatment for Autism and Related Disorders (Effective July 1, 2012)

Health insurance policies and health care service plans must provide coverage for behavioral health treatment for pervasive developmental disorder or autism.

“Behavioral health treatment” means professional services and treatment programs (including applied behavior analysis and evidence-based behavior intervention programs) that develop or restore, to the maximum extent practicable, the functioning of an individual with pervasive developmental disorder or autism, and that meet all of the following criteria:

  • The treatment is prescribed by a licensed physician or is developed by a licensed psychologist;
  • The treatment is provided under a treatment plan prescribed by a qualified autism service provider;
  • The treatment is administered by a qualified autism service provider or by a qualified autism service professional or paraprofessional who is employed and supervised by the qualified autism service provider;
  • The treatment plan has measurable goals over a specific timeline that is developed and approved by the qualified autism service provider for the specific patient being treated; and
  • The treatment plan is not used for purposes of providing or for the reimbursement of respite, day care or educational services and is not used to reimburse a parent for participating in the treatment program.

These benefits may be subject to case management, network providers, utilization review techniques, prior authorization, copayments or other cost sharing.

Insurers and plans subject to this mandate must maintain an adequate network that includes qualified autism service providers who supervise and employ qualified autism service professionals or paraprofessionals who provide and administer behavioral health treatment.

A “qualified autism service provider” means either of the following:

  • A person, entity or group that is certified by a national entity (such as the Behavior Analyst Certification Board), that is accredited by the National Commission for Certifying Agencies, and that designs, supervises or provides treatment for pervasive developmental disorder or autism; or
  • A person licensed as a physician, physical therapist, occupational therapist, psychologist, marriage and family therapist, educational psychologist, clinical social worker, professional clinical counselor, speech-language pathologist or audiologist who designs, supervises or provides treatment for pervasive developmental disorder or autism.

This mandate will expire on Jan. 1, 2017, unless a law is enacted before then to extend this mandate.

Blood Lead Levels Screening for Children

Health insurance policies and health care service plans must offer coverage for blood lead level screening for children.

Breast Cancer – Screening, Diagnosis and Treatment

Health insurance policies and health care service plans must provide coverage for breast cancer screening, diagnosis and treatment. Breast cancer screening and diagnosis must be covered consistent with generally accepted medical practice and scientific evidence, upon the referral of the insured’s or enrollee’s physician.

Breast cancer treatment includes 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 must be subject to the deductible and coinsurance conditions applied to the mastectomy and all other terms and conditions applicable to other benefits.

Cancer Clinical Trials – Routine Patient Care

Health insurance policies and health care service plans must provide coverage for all routine patient care costs for an insured or enrollee diagnosed with cancer and accepted into a phase I, phase II, phase III or phase IV clinical trial for cancer, if the treating physician recommends participation in the clinical trial after determining that participation in the clinical trial has a meaningful potential to benefit the insured or enrollee.

Copayments and deductibles must be consistent with those applied to the same services when they are not delivered in a clinical trial.
Cancer Screening Tests Health insurance policies and health service plans must provide coverage for all generally medically accepted cancer screening tests.

Cervical Cancer Screening

Health insurance policies and health care service plans that include coverage for treatment or surgery of cervical cancer must provide coverage for an annual cervical cancer screening test. This coverage includes the conventional Pap test, a human papillomavirus screening test that is approved by the federal Food and Drug Administration (FDA) and the option of any cervical cancer screening test approved by the federal FDA, upon the referral of the patient’s health care provider.

Contraceptive Coverage

Health insurance policies and health care service plans that provide coverage for outpatient prescription drugs must include coverage for a variety of federal FDA-approved prescription contraceptive methods, under the same terms and conditions as applicable to all benefits. There is an exception for religious employers.

Diabetes

Health insurance policies and health care service plans must include coverage for the following equipment and supplies for the management and treatment of insulin-using diabetes, non-insulin-using diabetes and gestational diabetes as medically necessary, even if the items are available without a prescription:

  • Blood glucose monitors and blood glucose testing strips;
  • Blood glucose monitors designed to assist the visually impaired;
  • Insulin pumps and all related necessary supplies;
  • Ketone urine testing strips;
  • Lancets and lancet puncture devices;
  • Pen delivery systems for the administration of insulin;
  • Podiatric devices to prevent or treat diabetes-related complications;
  • Insulin syringes; and
  • Visual aids, excluding eyewear, to assist the visually impaired with proper dosing of insulin.

Health insurance policies and health care service plans that cover prescription benefits must include coverage for the following medically necessary prescription items:

  • Insulin;
  • Prescriptive medications for the treatment of diabetes; and
  • Glucagon.

The coinsurances and deductibles for these benefits cannot exceed those established for similar benefits under the policy.

Health insurance policies and health care service plans must provide coverage for diabetes outpatient self-management training, education and medical nutrition therapy necessary to enable an insured to properly use the diabetes equipment, supplies and medications. The coinsurances and deductibles may not exceed those established for physician office visits.

Health insurance issuers must also offer coverage for diabetic daycare self-management education programs (instruction that will enable diabetic patients and their families to gain an understanding of the diabetic disease process, and the daily management of diabetic therapy).

Diethylstilbestrol

Health insurance policies and health care service plans cannot contain any exclusion, reduction or other limitations, as to coverage, deductibles or coinsurance provisions applicable solely to conditions attributable to diethylstilbestrol or exposure to diethylstilbestrol.

Emergency Medical Transportation

Health insurance policies that provide coverage for emergency health care services must include coverage for ambulance services provided through the “911” emergency response system. A similar coverage mandate applies to health care service plans.

Foot Disfigurement – Special Footwear

Health insurance policies and health care service plans must offer coverage for special footwear needed by persons who suffer from foot disfigurement (such as disfigurement from cerebral palsy, arthritis, polio, spina bifida and diabetes and foot disfigurement caused by accident or developmental disability).

General Anesthesia and Facility Charges for Dental Procedures

Health insurance policies and health care service plans must 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 patient requires dental procedures that ordinarily would not require general anesthesia to be rendered in a hospital or surgery center setting. This coverage mandate applies to an insured or enrollee:

  • Who is under seven years of age;
  • Who is developmentally disabled, regardless of age; or
  • Whose health is compromised and for whom general anesthesia is medically necessary, regardless of age.

HIV/AIDS, AIDS Vaccine

Health insurance policies and health care service plans must provide coverage for a vaccine for acquired immune deficiency syndrome (AIDS) that is approved for marketing by the federal FDA and is recommended by the United States Public Health Service.

HIV/AIDS, HIV Testing

Health insurance policies and health care service plans must provide coverage for human immunodeficiency virus (HIV) testing, regardless of whether the testing is related to a primary diagnosis.


HIV/AIDS, Transplantation Services

Health insurance policies and health care service plans cannot deny coverage that is otherwise available for the costs of solid organ or other tissue transplantation services because the insured or enrollee is HIV positive.

Home Health Care

Health insurance policies must offer benefits for home health care by a licensed home health agency. (In certain rural areas, the services of visiting nurses, if available, may be substituted for the services of a home health agency.)

Home health services consist of the following:

  • Part-time or intermittent skilled nursing services provided by a registered nurse or licensed vocational nurse;
  • Part-time or intermittent home health aide services that provide supportive services in the home under the supervision of a registered nurse or a physical, speech or occupational therapist;
  • Physical, occupational or speech therapy; and
  • 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.

The number of covered home health visits cannot be less than 100 visits in any year for each person covered under the policy. Home health care benefits may be subject to an annual deductible of not more than $50 and coinsurance not less than 80 percent of the reasonable charges for the home health care services.

Hospice Care

Health care service plans must include a provision for hospice care. In general, the hospice care benefits must be at least equivalent to the hospice care provided under Medicare.

Infertility Treatments

Health insurance policies and health care service plans (except health maintenance organizations offering coverage to employers with less than 20 employees) must offer coverage for infertility treatment, except in vitro fertilization. Infertility treatments include procedures consistent with established medical practices in the treatment of infertility by licensed physicians, such as diagnosis, diagnostic tests, medication, surgery and gamete intrafallopian transfer. There is an exception for religious organizations.

Effective Jan. 1, 2014, coverage for the treatment of infertility must be offered and, if purchased, provided without discrimination on the basis of age, ancestry, color, disability, domestic partner status, gender, gender expression, gender identity, genetic information, marital status, national origin, race, religion, sex or sexual orientation.

Intoxicants/Controlled Substances – Exclusion Prohibited

Health insurance policies may not contain a general exclusion for when the insured is intoxicated or under the influence of any controlled substance.
Jawbone or Associated Bone Joints Health insurance policies must cover medically necessary surgical procedures for covered conditions that directly affect the upper or lower jawbone or associated bone joints. A similar coverage mandate applies to health service plans.

Mammograms

Health insurance policies must provide the following mammogram coverage (upon the referral of a nurse practitioner, certified nurse midwife, physician assistant or physician) for breast cancer screening or diagnostic purposes:

  • A baseline mammogram for women ages 35 to 39;
  • A mammogram for women ages 40 to 49 every two years or more frequently based on a physician’s recommendation; and
  • A mammogram every year for women ages 50 and over.
    A mammography coverage mandate also applies to health service plans.
    Maternity Benefits Health insurance policies and health care service plans that provide maternity coverage cannot:

  • Contain a copayment or deductible for inpatient hospital maternity services that exceeds the most common amount for other covered inpatient services; or
  • Contain a copayment or deductible for ambulatory care maternity services that exceeds the most common amount for ambulatory care services provided for other covered medical conditions.

In addition, if a policy or plan has covered a person continuously from conception, it cannot contain any exclusion, reduction or other limitations as to coverage, deductibles or coinsurance provisions for involuntary complications of pregnancy, unless the provisions apply generally to all benefits paid under the policy or plan. Involuntary complications of pregnancy include: puerperal infection; eclampsia; cesarean section delivery; ectopic pregnancy; and toxemia.

See below for the maternity benefit mandate for health insurance policies that becomes effective on July 1, 2012.

Maternity Benefits

Health insurance policies must provide coverage for maternity services for all insureds covered under the policy.

“Maternity services” include: prenatal care; ambulatory care maternity services; involuntary complications of pregnancy; neonatal care; and inpatient hospital maternity care, such as labor and delivery and postpartum care. Also, the covered maternity services must be consistent with the scope of benefits under the ACA’s maternity benefit requirement.

Maternity Benefits – Minimum Length of Stay

Health insurance policies and health care service plans that provide maternity coverage cannot 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:

  • The early discharge decision is made by the treating physician in consultation with the mother; and
  • A post-discharge follow-up visit for the mother and newborn within 48 hours of discharge, when prescribed by the treating physician, is covered.
    Maternity Benefits – Prenatal Diagnosis of Genetic Disorders Health insurance policies and health care service plans that provide maternity benefits must offer coverage for prenatal diagnosis of genetic disorders of the fetus by means of diagnostic procedures in cases of high-risk pregnancy.

Maternity Benefits – Prenatal Testing Program (Expanded Alpha Feto Protein Program)

Health insurance policies and health service plans that provide maternity benefits must cover participation in the Expanded Alpha Feto Protein (AFP) program, which is a statewide prenatal testing program administered by the California Department of Health Services.

Mastectomy and Lymph Node Dissection

Health insurance policies and health service plans that provide coverage for mastectomies and lymph node dissections must:

  • Allow the length of hospital stay to be determined by the attending physician in consultation with the patient (post-surgery), consistent with sound clinical principles and processes;
  • Cover prosthetic devices or reconstructive surgery, including devices or surgery to restore and achieve symmetry for the patient incident to the mastectomy; and
  • Cover all complications from a mastectomy, including lymphedema.
    Coverage for prosthetic devices and reconstructive surgery must be subject to the deductible and coinsurance conditions applicable to other benefits.

Mental and Nervous Disorders

Health insurance policies must offer coverage for mental or nervous disorders.

Mental Illness – Severe Mental Illness and Serious Emotional Disturbances of Children

Health insurance policies and health care service plans must provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses of a person of any age, and of serious emotional disturbances of a child under the same terms and conditions applied to other medical conditions. These benefits must include: outpatient services; inpatient hospital services; partial hospital services; and prescription drugs, if the policy or plan includes coverage for prescription drugs.

The maximum lifetime benefits, copayments, coinsurance and deductibles for these benefits must be applied equally to all benefits under the policy or plan.

“Severe mental illnesses” include: schizophrenia; schizoaffective disorder; bipolar disorder (manic-depressive illness); major depressive disorders; panic disorder; obsessive-compulsive disorder; pervasive developmental disorder or autism; anorexia nervosa; and bulimia nervosa.

The federal Mental Health Parity and Addiction Equity Act (MHPAEA) creates additional parity requirements for employers with more than 50 employees that offer mental health or substance use disorder benefits in their group health plans. Depending on a plan’s design, the MHPAEA may require stricter parity requirements than state law mandates. Also, beginning in 2014, the ACA requires non-grandfathered health plans in the individual and small group markets to cover mental health and substance use disorder services and comply with the federal parity law.

Orthotic and Prosthetic Devices and Services

Health insurance policies must offer coverage for orthotic and prosthetic devices and services, which must include original and replacement devices. The benefit amount cannot be less than the annual and lifetime benefit maximums applicable to all benefits in the policy. Any copayment, coinsurance, deductible and maximum out-of-pocket amount cannot be more than the most common amounts contained in the policy.

A similar mandate applies to health care service plans.

Osteoporosis

Health insurance policies and health care service plans must include coverage for services related to diagnosis, treatment and appropriate management of osteoporosis. The services may include all federal FDA-approved technologies, including bone mass measurement technologies as deemed medically appropriate.

Pain Management Medication for Terminally Ill Patients

Health care service plans that cover prescription drug benefits must provide coverage for appropriately prescribed pain management medications for terminally ill patients when medically necessary.

Phenylketonuria (PKU)

Health insurance policies and health care service plans must provide coverage for the testing and treatment of phenylketonuria (PKU). PKU coverage must include formulas and special food products that are part of a diet prescribed by a licensed physician, 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 PKU. Benefits are payable only to the extent that the cost of necessary formulas and special food products exceeds the cost of a normal diet.

Prescription Drugs – Coverage for Drugs Approved Before July 1, 1999

Health care service plans that cover prescription drug benefits cannot limit or exclude coverage for a drug that was previously approved for coverage by the plan for an enrollee’s medical condition if the plan’s prescribing provider continues to prescribe the drug for the medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition.
Prescription Drugs – Off-Label Use Health insurance policies and health care service plans that cover prescription drugs cannot limit or exclude coverage for the off-label use of a drug, provided the drug:

  • Is approved by the FDA;
  • Is prescribed for the treatment of a life-threatening condition or a chronic and seriously debilitating condition (provided the drug is medically necessary to treat that condition and the drug is on the insurer’s formulary, if any); and
  • Has been recognized for treatment of that condition by the American Hospital Formulary Service’s Drug Information or certain medical compendia.
    Preventive Care for Children – Age 16 and Younger Health insurance policies and health care service plans must provide benefits for the comprehensive preventive care of children 16 years of age or younger.

Covered benefits must include:

  • Periodic health evaluations;
  • Immunizations; and
  • Laboratory services in connection with periodic health evaluations.

Preventive Care of Children – Age 17 or 18

Health insurance policies and health care service plans must offer benefits for the comprehensive preventive care of children 17 and 18 years of age. Benefits must be offered for the following:

  • Periodic health evaluations;
  • Immunizations; and
  • Laboratory services in connection with periodic health evaluations.

Prostate Cancer – Screening and Diagnosis

Health insurance plans and health care service plans must cover the screening and diagnosis of prostate cancer, including prostate-specific antigen testing and digital rectal examinations, when medically necessary and consistent with good professional practice.

Prosthetic Devices for Laryngectomy

Health insurance policies and health care service plans that cover the surgical procedure known as a laryngectomy (removal of the larynx for medically necessary reasons) must include coverage for prosthetic devices to restore a method of speaking.

Reconstructive Surgery (Including Cleft Palate)

Health insurance policies and health care service plans must cover reconstructive surgery. “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. It must be performed to either improve function or create a normal appearance, to the extent possible. This mandate does not cover cosmetic surgery.

This mandate also includes coverage for medically necessary dental or orthodontic services that are an integral part of reconstructive surgery for cleft palate procedures. “Cleft palate” means a condition that may include cleft palate, cleft lip or other craniofacial anomalies associated with cleft palate.

This mandate does not require coverage for cosmetic surgery, which is surgery performed to alter or reshape normal structures of the body to improve the patient’s appearance.

Sterilization Rationale Exclusion

Health insurance policies and health care service plans that cover all or part of the cost of a sterilization operation or procedure cannot include any exclusion, reduction or limitation on this benefit based upon the covered person’s reason for requesting sterilization.

PROVIDER MANDATES

Acupuncturists

Health policy insurers must offer coverage for expenses incurred as a result of treatment by acupuncturists. Mandate to offer coverage also applies to health care service plans, except health maintenance organizations (HMOs). Acupuncturists are also subject to a nondiscrimination mandate, to the extent a policy or plan covers acupuncture.

A nondiscrimination mandate requires coverage if the health policy or plan reimburses services within the scope of the health care professional’s practice.


Advanced Practice Registered Nurse

Nondiscrimination mandate. To be covered under mandate, the nurse must be certified as a clinical nurse specialist and participate in expert clinical practice in the specialty of psychiatric-mental health nursing.

Audiologist

Nondiscrimination mandate


Autism Service Providers

For purposes of the behavioral health treatment mandate, a “qualified autism service provider” means either of the following:

  • A person, entity or group that is certified by a national entity (such as the Behavior Analyst Certification Board), that is accredited by the National Commission for Certifying Agencies, and that designs, supervises or provides treatment for pervasive developmental disorder or autism; or
  • A person licensed as a physician, physical therapist, occupational therapist, psychologist, marriage and family therapist, educational psychologist, clinical social worker, professional clinical counselor, speech-language pathologist, or audiologist who designs, supervises or provides treatment for pervasive developmental disorder or autism.

Chiropractor

Nondiscrimination mandate

Clinical Social Worker

Nondiscrimination mandate

Dentist

Nondiscrimination mandate

Marriage and Family Therapists

Nondiscrimination mandate.

“Marriage and family therapist” means a licensed marriage and family therapist who has received specific instruction in assessment, diagnosis, prognosis and counseling, and psychotherapeutic treatment of premarital, marriage, family and child relationship dysfunctions.

Optometrist

Nondiscrimination mandate

Physician/Surgeon

Nondiscrimination mandate

Podiatrist

Nondiscrimination mandate


Professional Clinical Counselor

Nondiscrimination mandate.

A “professional clinical counselor” means a licensed professional clinical counselor who has received specific instruction in assessment, diagnosis, prognosis, counseling and psychotherapeutic treatment of mental and emotional disorders.

Psychologist

Nondiscrimination mandate

Registered Dispensing Optician

Nondiscrimination mandate

Registered Nurse

Nondiscrimination mandate.

To be covered under mandate, a nurse must possess a master’s degree in psychiatric-mental health nursing and be listed as a psychiatric-mental health nurse by the Board of Registered Nursing.


Respiratory Care Practitioner

Nondiscrimination mandate

Therapists – Occupational, Physical and Speech-Language

Nondiscrimination mandate

PERSON MANDATES

Continuation Coverage (Cal-COBRA)

Insurers that provide coverage under a group plan to a small employer (employers with fewer than 20 employees) must offer continuation coverage to a qualified beneficiary when a qualifying event occurs. The maximum coverage period is 36 months. The coverage must generally be provided under the same terms and conditions that apply to similarly situated individuals under the group plan.

A “qualified beneficiary” means any individual who, on the day before the qualifying event, is covered under the group plan and has a qualifying event.

“Qualifying event” means any of the following events that, but for the election of continuation coverage, would result in a loss of coverage:

  • The covered employee’s death;
  • The covered employee’s termination of employment or reduction in hours (except for terminations due to gross misconduct);
  • The covered employee’s divorce or legal separation from his or her spouse;
  • A dependent’s loss of dependent status; and
  • With respect to a covered dependent only, the covered employee’s entitlement to benefits under Medicare.

In addition, an insurer must offer a coverage extension to an insured or enrollee who has exhausted his or her 18 months (or longer in special circumstances) of federal COBRA coverage. The extension may be for up to 36 months from the date the individual’s continuation coverage began.

Dependent Child – Limiting Age

For health insurance policies and health care service plans that provide dependent coverage, the limiting age for dependent children cannot be less than age 26.

However, for plan years beginning before Jan. 1, 2014, a health insurance policy or health care service plan with grandfathered status under the federal health care reform law may exclude from coverage an adult child who has not attained 26 years of age if the adult child is eligible to enroll in an eligible employer-sponsored health plan, other than a group health plan of a parent.

Dependent Child – Not Residing with Employee

Health insurance policies and health care service plans cannot exclude a dependent child from eligibility or benefits solely because the dependent child does not reside with the employee.

Dependent Child – Students

If a health insurance policy or health care service plan provides coverage for a dependent child who is over 26 years of age and enrolled as a full-time student at a secondary or postsecondary educational institution, the following conditions must apply to the coverage:

  • Any break in the school calendar cannot disqualify the dependent child from coverage;
  • If the dependent child takes a medical leave of absence and the child’s condition renders him or her incapable of self-sustaining employment, the child’s coverage must continue if he or she is chiefly dependent on the policyholder or subscriber for support and maintenance;
  • If the dependent child takes a medical leave of absence from school (but the dependent child’s condition does not fall under the paragraph above) the child’s coverage cannot terminate for a period of 12 months or until the date coverage is scheduled to terminate pursuant to the policy’s or plan’s terms, whichever comes first.

Disabled Child

If a plan or policy has a limiting age for dependent coverage, coverage must continue past the limiting age for a child who is (and continues to be) both incapable of self-sustaining employment by reason of an intellectual disability or physical handicap and chiefly dependent upon the insured for support and maintenance.

Domestic Partner Coverage

Health insurance policies and health care service plans must provide equal coverage to the registered domestic partner of an employee, insured, policyholder or subscriber to the same extent, and subject to the same terms and conditions, as provided to a spouse. In addition, policies and plans cannot discriminate in coverage between spouses or domestic partners of a different sex and spouses or domestic partners of the same sex.

Newborns and Adopted Minors

Health insurance policies and health care service plans that provide dependent coverage must provide coverage for newborn infants from and after the moment of birth and for any minor child placed for adoption from and after the moment the child is placed for adoption.

Persons with Dementia

Except for a preexisting condition, health insurance policies and health care service plans that provide coverage for long-term care facility services or home-based care cannot excluded covered persons from this coverage if they are diagnosed as having any significant destruction of brain tissue with resultant loss of brain function (such as Alzheimer’s disease and other progressive, degenerative and dementing illnesses).

*While many of the mandates described in the above chart are applicable to managed care plans, such as health maintenance organizations (HMOs) and certain preferred provider organizations (PPOs), managed care plans may be subject to additional requirements under California statutes and regulations that are not specifically addressed in the above chart. In addition, the chart focuses on mandates applicable to health insurance plans sponsored by private employers, and does not address mandates specifically applicable to the health benefits provided by government employers.

Additional Resources:

California statutes: www.legislature.ca.gov  

California Department of Insurance: www.insurance.ca.gov

California Department of Managed Care: www.dmhc.ca.gov  

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Company information

Scurich Insurance Services
Phone: (831) 661-5697
Fax: (831) 661-5741

Physical:
783 Rio Del Mar Blvd., Suite7,
Aptos, Ca 95003-4700

Mailing:
PO Box 1170
Watsonville, CA 95077-1170

Contact details

E-mail address:
[email protected]

(831) 661-5697

Available 8:30am - 5:00pm