New State Law Aims To Help Consumers Avoid Health Plan Rescissions
Protections Under Federal Reform Law
The state legislation was developed to align with provisions of the federal health reform law that took effect last fall.
The reform law bars insurers from canceling coverage because of minor or unintentional mistakes in a member's application. It also allows consumers to sue insurers over policy rescissions.
Protections Under State Law
Under AB 2470, insurers must notify policyholders at least 30 days prior to cancelling coverage.
The state law also requires insurers to inform enrollees about their right to appeal if their coverage is canceled. If a member appeals a rescission, the member's policy must remain in effect while state regulators review the case.
Jamie Court, president of the advocacy group Consumer Watchdog, said that the state law will "make it a little simpler and easier to avoid a rescission" (Calvan, Sacramento Bee, 1/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.