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<ns0:Id>20250SB__119999INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-19</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Weber Pierson</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Weber Pierson</ns0:Name>
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<ns0:Title> An act to add Section 1399.852 to the Health and Safety Code, and to add Section 10112.283 to the Insurance Code, relating to health care coverage. </ns0:Title>
<ns0:RelatingClause>health care coverage</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Prescription drug cost sharing.</ns0:Subject>
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<html:p>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 also provides for the regulation of health insurers by the Department of Insurance. Existing law, except as provided and under certain circumstances, prohibits a person who manufactures a prescription drug from offering a discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses associated with their health insurance or health care service plan. Existing law generally imposes specified cost sharing limits on covered prescription drugs.</html:p>
<html:p>This bill would require a health care service plan or health insurer, when calculating an enrollee’s or insured’s overall contribution
to an out-of-pocket maximum or cost sharing requirement under the plan contract or insurance policy, to count any amount paid by the enrollee or insured or on behalf of the enrollee or insured toward the enrollee’s or insured’s cost sharing, including any form of direct support offered by drug manufacturers that is permitted. The bill would prescribe an administrative penalty for each violation by a health insurer that is enforceable by the Insurance Commissioner after appropriate notice and opportunity for hearing. Because a willful violation of these provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.</html:p>
<html:p>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.</html:p>
<html:p>This bill would provide that no
reimbursement is required by this act for a specified reason.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
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<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>YES</ns0:LocalProgram>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 1399.852 is added to the
<ns0:DocName>Health and Safety Code</ns0:DocName>
, to read:
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<ns0:Num>1399.852.</ns0:Num>
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(a)
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(1)
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When calculating an enrollee’s overall contribution to an out-of-pocket maximum or cost sharing requirement under the enrollee’s health care service plan contract, a health care service plan shall count any amount paid by the enrollee or on behalf of the enrollee for a drug toward an enrollee’s cost sharing, including any form of direct support offered by drug manufacturers when permitted under Division 114 (commencing with Section 132000).
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<html:p>
(2)
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Amounts described in paragraph (1) shall be counted toward the annual limit on cost sharing and the applicable in-network deductible.
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<html:p>
(b)
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(1)
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This section shall apply to all
nongrandfathered health care service plan contracts that are subject to Section 1367.006.
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<html:p>
(2)
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This section shall not apply to a grandfathered health plan, a specialized health care service plan contract that does not provide essential health benefits, a Medicare supplement plan contract, or accident-only, specified disease, or hospital indemnity plan contracts.
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<html:p>
(c)
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Direct support offered by a drug manufacturer to an enrollee to reduce or eliminate immediate out-of-pocket expenses is subject to the limitations under Sections 132000 and 132002.
</html:p>
<html:p>
(d)
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For purposes of this section, the following definitions apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Annual limitation on cost sharing” means the limit described in Section 1367.006.
</html:p>
<html:p>
(2)
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“Cost sharing” means any expenditure required by or on behalf of an enrollee with respect to essential health benefits. As set forth under Section 155.20 of Title 45 of the Code of Federal Regulations, cost sharing includes deductibles, coinsurance, copayments, or similar charges, but does not include premiums, balance billing amounts for nonnetwork providers, and spending for noncovered services.
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<html:p>
(3)
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“Essential health benefits” has the same meaning as set forth under Section 1367.005.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 10112.283 is added to the
<ns0:DocName>Insurance Code</ns0:DocName>
, to read:
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<ns0:Num>10112.283.</ns0:Num>
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<html:p>
(a)
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(1)
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When calculating an insured’s overall contribution to an out-of-pocket maximum or cost sharing requirement under the insured’s health insurance policy, a health insurer shall count any amount paid by the insured or on behalf of the insured for a drug toward an insured’s cost sharing, including any form of direct support offered by drug manufacturers when permitted under Division 114 (commencing with Section 132000) of the Health and Safety Code.
</html:p>
<html:p>
(2)
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Amounts described in paragraph (1) shall be counted toward the annual limit on cost sharing and the applicable in-network deductible.
</html:p>
<html:p>
(b)
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(1)
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This section shall apply to all
nongrandfathered health insurance policies that are subject to Section 10112.28.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
This section shall not apply to a grandfathered health insurance policy, a specialized health insurance policy that does not provide essential health benefits, Medicare supplement insurance, or accident-only, specified disease, or hospital indemnity policies.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Direct support offered by a drug manufacturer to an insured to reduce or eliminate immediate out-of-pocket expenses is subject to the limitations under Sections 132000 and 132002 of the Health and Safety Code.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
In addition to any other remedies that are available to the commissioner for a violation of this code, the commissioner may enforce this section pursuant to Chapter 4.5 (commencing with Section 11400) or Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code. After appropriate notice and opportunity for hearing in accordance with either of those provisions, the commissioner shall, by order, assess an administrative penalty not to exceed five thousand dollars ($5,000) for each violation, or, if a violation was willful, a civil penalty not to exceed ten thousand dollars ($10,000) for each violation.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Annual limitation on cost sharing” means the limit described in Section 10112.28.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Cost sharing” means any expenditure required by or on behalf of an insured with respect to essential health benefits. As set forth under Section 155.20 of Title 45 of the Code of Federal Regulations, cost sharing includes deductibles, coinsurance, copayments, or similar
charges, but does not include premiums, balance billing amounts for nonnetwork providers, and spending for noncovered services.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Essential health benefits” has the same meaning as set forth under Section 10112.27.
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<ns0:Num>SEC. 3.</ns0:Num>
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No reimbursement is required by this act pursuant to Section 6 of Article XIII
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B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
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B of the California Constitution.
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