Every non-grandfathered individual health policy sold in California must be available to all children under 19 years of age, but insurers can use open enrollment periods to try to reduce antiselection.
The California Department of Insurance has given that interpretation of California insurance laws governing child-only coverage in a draft guidance statement.
The statement interprets new changes in the California Insurance Code made by the law created by Assembly Bill 2244.
The law created by the bill requires that insurers offer coverage to all children under 19 years of age without exclusions or limitations due to any pre-existing condition.
The new state law takes effect Jan. 1, 2011.
Federal law prohibits insurers that sell child-only coverage from imposing pre-existing condition restrictions on children under 19 years old. The California law takes effect January 1, and allows the state to enforce this federally- and state-established requirement.
In California, the state will require all sellers of individual health insurance to offer child-only coverage.
Insurers must offer the child-only coverage at all times during the year.
During specified open enrollment periods and late enrollment periods, an insurer can charge children with health problems up to 200% of the standard rate.
The law does not set specific limits on premiums for children who enroll outside the open enrollment and late enrollment periods, but insurers that charge children who enroll outside of the special periods high rates must reduce the rates to 200% of the standard rate when the next open enrollment period starts.
“If an insurer charges a surcharge,… the insurer must notify the insured, at the time that the surcharge is imposed, that the surcharge will be discontinued twelve months after the effective date of the child’s coverage,” according to the guidance draft. “An insurer must discontinue such surcharge at the appropriate time with no action required from the insured.”
Comments on the guidance are due today.