California Code of Regulations
Title 10 - Investment
Chapter 12 - California Health Benefit Exchange
Article 6 - Application, Eligibility, and Enrollment in the Shop Exchange
Section 6538 - Disenrollment and Termination

Universal Citation: 10 CA Code of Regs 6538

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(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 and 10273.7 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(3) The qualified employee's or the qualified employee's dependent coverage is rescinded by the QHP Issuer in compliance with Health and Safety Code Section 1389.21 or California Insurance Code Sections 10384.17 and 10273.7;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 his or her 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 his or her 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 his or her 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 his or her dependents at that address.

1. New section filed 9-30-2013 as a deemed emergency pursuant to Government Code section 100504(a)(6); operative 9-30-2013 (Register 2013, No. 40). A Certificate of Compliance must be transmitted to OAL by 4-1-2014 or emergency language will be repealed by operation of law on the following day.
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, subdivision (a)(6), as modified by Senate Bill 857 (Stats. 2014, c. 31); operative 6-30-2014 (Register 2014, No. 27). A Certificate of Compliance must be transmitted to OAL by 9-30-2015 pursuant to Government Code section 100504 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), (e)(1)-(e)(1)(B) and (e)(6), on 10-2-2014 as a deemed emergency pursuant to Government Code section 100504, subdivision (a)(6), as modified by Senate Bill 857 (Stats. 2014, c. 31); operative 10-2-2014 (Register 2014, No. 40). A Certificate of Compliance must be transmitted to OAL by 9-30-2015 pursuant to Government Code section 100504 or emergency language will be repealed by operation of law on the following day.
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 9-17-2018 (Register 2018, No. 38).
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 9-7-2021 (Register 2021, No. 37). Pursuant to Government Code section 100504(a)(6)(A), a Certificate of Compliance must be transmitted to OAL by 9-7-2026 or emergency language will be repealed by operation of law on the following day.

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.

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