Cal. Code Regs. Tit. 10, § 6538 - Disenrollment and Termination
(a) A
qualified employer may terminate coverage during the plan year for all its
qualified employees and their dependents covered by the employer group health
plan at the end of each month, in accordance with subdivision (e) of this
section. If a qualified employer terminates coverage through the SHOP, the SHOP
must:
(1) Ensure that each QHP Issuer
terminates the coverage of the qualified employer's qualified employees and
their dependents enrolled in the QHP through the SHOP; and
(2) Send a notice to each of the qualified
employer's qualified employees enrolled in a QHP through the SHOP within 15
days of receiving notice from the employer in subdivision (a) of this section.
Such notification must provide information about other potential sources of
coverage, including access to individual market coverage through the
Exchange.
(b) A
qualified employer must request that the SHOP terminate the coverage of a
qualified employee or dependent upon receiving written request by the qualified
employee.
(c) The SHOP may initiate
termination of a qualified employee's coverage in a QHP or a dependent's
coverage in a QHP, and shall permit a QHP Issuer to terminate such coverage
provided that the QHP Issuer makes reasonable accommodations for all
individuals with disabilities (as defined by the Americans with Disabilities
Act) and complies with any and all requirements for cancellations, rescissions,
and nonrenewals pursuant to Health and Safety Code section
1365
and Insurance Code sections
10273.4,
10273.7,
and
10384.17
and relevant state regulations before terminating coverage for such
individuals, under the following circumstances:
(1) The qualified employee or dependent is no
longer eligible for coverage in a QHP;
(2) The qualified employer fails to pay
premiums for coverage, as specified in Section
6532, and the applicable grace
period, as provided in
10 CCR
§
2274.53 and 28 CCR § 1300.65, has
been exhausted;
(3) The qualified
employee's or the qualified employee's dependent coverage is rescinded by the
QHP Issuer in compliance with Health and Safety Code Section
1389.21
or California Insurance Code Sections
10384.17
and
10273.7;
(4) The QHP terminates or is decertified as
described in 45 CFR Section
155.1080 (May 29, 2012), hereby incorporated
by reference, except for those eligible for enrollment in a similar QHP as
determined by the SHOP, on a case-by-case basis, pursuant to Section
6528(g);
(5) The qualified employee changes from one
QHP to another QHP during an annual employee open enrollment period or special
enrollment period in accordance with Sections
6528 and
6530;
(6) Upon the death of the qualified employee
or a dependent of a qualified employee;
(7) The qualified employee chooses not to
remain enrolled in the QHP at open enrollment. This election would only be
effective for the new plan year and coverage in the current QHP would remain
uninterrupted through the end of the current plan year;
(8) The qualified employee is no longer an
employee or a dependent;
(9) The
qualified employee is newly eligible for Medi-Cal or CHIP, but only if the
qualified employee or dependent requests coverage to be terminated;
and
(10) The qualified employer is
ineligible to participate in the SHOP because it has lost its eligibility
pursuant to Section
6522.
(d) If a QHP Issuer terminates coverage
pursuant to subdivision (c)(2) and (3) of this section, the QHP Issuer must
comply with Sections
10273.4,
10273.7,
and
10384.17 of
the California Insurance Code and Section
1365
of the California Health and Safety Code, and implementing state
regulations.
(e) Effective Dates of
Termination
(1) In the case of a termination
in accordance with subdivision (a) of this section, the last day of coverage
shall be:
(A) The end of the month in which
the qualified employer provided notice of termination, if the qualified
employer provides notice to the SHOP on or before the fifteenth of the month,
or on a case-by-case basis an earlier date upon agreement between the QHP
Issuer and the SHOP; or
(B) If the
qualified employer does not provide notice to the SHOP on or before the
fifteenth of the month, the last day of the month following the month in which
the qualified employer gave notice of termination or, on a case-by-case basis,
an earlier date upon agreement between the QHP Issuer and the SHOP.
(2) In the case of a termination
in accordance with subdivision (b) of this section, the effective date of
termination shall be:
(A) No sooner than the
last day of the month in which the SHOP receives the request,
(B) On a date in a subsequent month specified
by the employee as long as that date is the last day of the month, or
(C) On a case-by-case basis, an earlier date
upon agreement between the QHP Issuer and SHOP.
(D) In no case will the effective date of
termination be a date other than the last day of the month.
(3) In the case of a termination
in accordance with subdivision (c)(1) of this section, the last day of coverage
shall be the last day of the month in which the qualified employee's
eligibility or the eligibility of a qualified employee's dependent
ceased.
(4) In the case of a
termination in accordance with subdivision (c)(2) of this section, the last day
of coverage shall be consistent with the grace periods in Section
10273.4 of
the California Insurance Code and Section
1365
of the California Health and Safety Code, and implementing state
regulations.
(5) In the case of a
termination in accordance with subdivision (c)(3) of this section, the last day
of coverage shall be the day prior to the day the fraud or intentional
misrepresentation of material fact occurred.
(6) In the case of a termination in
accordance with subdivision (c)(4) of this section, the last day of coverage
shall be the day before the QHP was decertified or terminated, or the day on
which the QHP Issuer has met the requirements in Health and Safety Code
1365(a)(5) and (6) or Insurance Code 10273.4(d) or (e), whichever is
later.
(7) In the case of a
termination in accordance with subdivision (c)(5) of this section, the last day
of coverage in an enrollee's prior QHP shall be the day before the effective
date of coverage in their new QHP.
(8) In the case of a termination in
accordance with subdivision (c)(6) of this section, the last day of coverage
shall be the date of death.
(9) In
the case of a termination in accordance with subdivision (c)(7) of this
section, the last day of coverage shall be the last day of the qualified
employer's plan year.
(10) In the
case of a termination in accordance with subdivision (c)(8) of this section,
the last day of coverage shall be the last day of the month in which the
employee or dependent ceased being an employee or dependent.
(11) In the case of a termination in
accordance with subdivision (c)(9), the effective date of termination of
coverage shall be the day before such other coverage begins.
(f) If a qualified employee's
coverage or the coverage of a qualified employee's dependent is terminated
pursuant to subdivision (b) of this section, the SHOP shall provide the
qualified employee or qualified employee's dependent with a notice of
termination of coverage that includes the termination effective date and reason
for termination.
(g) Notice of
Termination
(1) Except as provided in
subdivision (g)(3) of this section, if any enrollee's coverage or enrollment
through the SHOP is terminated due to non-payment of premiums or due to a loss
of the enrollee's eligibility to participate in the SHOP, including where an
enrollee loses their eligibility because a qualified employer has lost its
eligibility, the SHOP must notify the enrollee of the termination. Such notice
must include the termination effective date and reason for termination, and
must be sent within three (3) business days if an electronic notice is sent,
and within five (5) business days if a mailed hard copy notice is
sent.
(2) Except as provided in
subdivision (g)(3) of this section, if an employer group's coverage or
enrollment through the SHOP is terminated due to non-payment of premiums or,
where applicable, due to a loss of the qualified employer's eligibility to
offer coverage through the SHOP, the SHOP must notify the employer of the
termination. Such notice must include the termination effective date and reason
for termination, and must be sent within three (3) business days if an
electronic notice is sent, and within five (5) business days if a mailed hard
copy notice is sent.
(3) Where
state law requires a QHP Issuer to send the notices described in subdivisions
(g)(1) and (g)(2) of this section, a SHOP is not required to send such
notices.
(4) When a primary
subscriber and their dependents live at the same address, a separate
termination notice need not be sent to each dependent at that address, provided
that the notice sent to each primary subscriber at that address contains all
required information about the termination for the primary subscriber and their
dependents at that address.
Notes
Note: Authority cited: Section 100504, Government Code. Reference: Sections 100502 and 10503, Government Code; and 45 CFR Sections 155.720, 155.725, 155.735, 155.1080 and 156.285.
Note: Authority cited: Section 100504, Government Code. Reference: Sections 100502 and 10503, Government Code; and 45 CFR Sections 155.720, 155.725, 155.735, 155.1080 and 156.285.
2. New section, including amendment of subsection (e)(2), refiled 4-1-2014 as a deemed emergency pursuant to Government Code section 100504(a)(6); operative 4-1-2014 (Register 2014, No. 14). A Certificate of Compliance must be transmitted to OAL by 6-30-2014 or emergency language will be repealed by operation of law on the following day.
3. Refiling of 4-1-2014 action on 6-30-2014, including amendment of subsection (c)(4), as a deemed emergency pursuant to Government Code section 100504(a)(6); operative 6-30-2014 (Register 2014, No. 27). A Certificate of Compliance must be transmitted to OAL by 9-29-2014 or emergency language will be repealed by operation of law on the following day.
4. Refiling of 6-30-2014 order, including amendment of subsections (a) and (c), on 10-2-2014 as an emergency pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 857 (Stats.
5. Editorial correction of History 3 and History 4 (Register 2014, No. 45).
6. Senate Bill 75 (Stats. 2015, Ch. 18) modified Government Code section 100504(a)(6) to change the date upon which a Certificate of Compliance must be transmitted to OAL. Pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 75 (Stats. 2015, Ch. 18), a Certificate of Compliance must be transmitted to OAL by 9-30-2016 or the language in the emergency order of 10-2-2014 will be repealed by operation of law on the following day (Register 2015, No. 38).
7. Senate Bill 833 (Stats. 2016, c. 30) modified Government Code section 100504(a)(6) to extend the date upon which a Certificate of Compliance must be transmitted to OAL. Refiling of 10-2-2014 order on 9-30-2016 as a deemed emergency pursuant to Government Code section 100504(a)(6); operative 9-30-2016 (Register 2016, No. 40). A Certificate of Compliance must be transmitted to OAL by 10-1-2018 pursuant to Government Code section 100504(a)(6) or emergency language will be repealed by operation of law on the following day.
8. Refiling of 9-30-2016 order, including further amendment of subsections (c)(4), (c)(8) and (c)(9) and new subsections (c)(10) and (g)-(g)(4), on 11-28-2016 as a deemed emergency pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 833 (Stats. 2016, c. 30); operative 11-28-2016 (Register 2016, No. 49). A Certificate of Compliance must be transmitted to OAL by 10-1-2018 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.
9. Refiling of 11-28-2016 order, including further amendment of section, filed 4-20-2018 as a deemed emergency pursuant to Government Code section 100504(a)(6), as modified by Senate Bill 833 (Stats. 2016, c.30); operative 4-20-2018 (Register 2018, No. 16). A Certificate of Compliance must be transmitted to OAL by 10-1-2018 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.
10. Certificate of Compliance as to 4-20-2018 order, including amendment of subsection (c)(8) and amendment of Note, transmitted to OAL 8-3-2018 and filed
11. Amendment of subsection (a)(1), (c), (c)(3)-(4), (d), (e)(1)(A)-(B), (e)(2)(C), (e)(6) and (g)(3) filed 9-7-2021 as an emergency; operative
12. Certificate of Compliance as to 9-7-2021 order, including further amendment of subsections (c), (e)(7), (g)(1) and (g)(4), transmitted to OAL 8-22-2024 and filed 9-23-2024; amendments effective
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