20250AB__192996AMD INTRODUCED 2026-02-13 AMENDED_ASSEMBLY 2026-03-24 AMENDED_ASSEMBLY 2026-04-16 AMENDED_SENATE 2026-06-15 2025 AB AMD Introduced by Assembly Member Ortega (Coauthor: Assembly Member Mark González) LEAD_AUTHOR ASSEMBLY Ortega COAUTHOR ASSEMBLY Mark González

An act to add

Section to the Government Code, relating to health care coverage. health care coverage Health care coverage: investments: disclosure. Existing federal law, the Patient Protection and Affordable Care Act (PPACA), requires each state to establish an American Health Benefit Exchange to facilitate the purchase of qualified health benefit plans by qualified individuals and qualified small employers.

Existing state law creates the California Health Benefit Exchange, also known as Covered California, to facilitate the enrollment of qualified individuals and qualified small employers in qualified health plans offered by participating carriers as required under PPACA. This bill would require a carrier participating in the Exchange to annually disclose its material investment holdings to the Exchange on or before July of each year, unless otherwise specified by regulation, beginning on July 1, 2027.

The bill would require the Exchange to prominently display, and make accessible to the public, those disclosures on its internet website. If a carrier fails to comply with the disclosure requirements, the bill would require the Exchange to assess an administrative penalty against the carrier, as specified. The bill would require the Exchange to prominently post the carrier’s noncompliance status on its internet website until compliance is achieved.

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 requires a health care service plan’s assets to be invested in a prudent manner and requires the Director of the Department of Managed Health Care to determine the acceptability of a health care service plan’s investments, as specified.</xhtml:p><xhtml:p> Existing law provides for the regulation of health insurers by the Department of Insurance.

Existing law regulates the types and amounts of investments that insurers are authorized to make, as specified.</xhtml:p><xhtml:p>This bill would require a health care service plan or health insurer to annually disclose its material investment holdings to the Department of Managed Health Care or Department of Insurance, as applicable, on or before July of each year, unless otherwise specified by regulation, beginning on July 1, 2027. The bill would require the departments to prominently display, and make accessible to the public, those disclosures on their internet websites.

If a health care service plan or health insurer fails to comply with the disclosure requirements, the bill would require the applicable department to assess a civil penalty against the plan or insurer, as specified. The bill would require the applicable department and Covered California to prominently post the plan’s or insurer’s noncompliance status on their internet websites until compliance is achieved.

Because a violation of these requirements by a health care service plan would be a crime, this bill would impose a state-mandated local program.</xhtml:p><xhtml: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.</xhtml:p><xhtml:p>This bill would provide that no reimbursement is required by this act for a specified reason.</xhtml:p>"?> MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION 1. The Legislature finds and declares all of the following: (

a) Many health care service plans and health insurers in California receive significant public benefits through tax credits, regulatory privileges, and participation in publicly supported programs such as Covered California. (

b) Californians pay billions of dollars annually in health insurance premiums to health care service plans and health insurers with the expectation that those funds will be used primarily to support patient care and the delivery of health services. (

c) Consumers, policymakers, and the public currently have limited visibility into how health care service plans and health insurers invest their financial reserves and surplus funds. (

d) Greater transparency regarding investment holdings will help ensure accountability, inform public policy discussions, and strengthen public trust in California’s health care system. (

e) Providing public access to investment disclosures will allow consumers and policymakers to better understand how health care entities manage significant financial assets derived from patient premiums. <caml:Num>SEC. 2.</caml:Num><caml:ActionLine action="IS_ADDED" xlink:href="urn:caml:codes:HSC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'10.9.'%5D)" xlink:label="fractionType: LAW_SPREAD||commencingWith: 1399.67" xlink:type="locator">Article 10.9 (commencing with

Section 1399.67) is added to

Chapter 2.2 of Division of the <caml:DocName>Health and Safety Code</caml:DocName>, to read:</caml:ActionLine><caml:Fragment><caml:LawHeading id="id_9DBB372C-CB3C-40F4-923D-EC8E22E2B468" type="ARTICLE"><caml:Num>10.9.</caml:Num><caml:LawHeadingVersion id="id_50E1D097-B70F-45E2-9433-280B4CD19F5C"><caml:LawHeadingText>Health Care Service Plan Investment Transparency</caml:LawHeadingText></caml:LawHeadingVersion><caml:LawSection id="id_B1D02F95-0F17-4D81-BF88-06DE54236094"><caml:Num>1399.67.</caml:Num><caml:LawSectionVersion id="id_661CAFCF-883D-415E-9CE9-70A94EEC6F2D"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>A health care service plan regulated by the department shall annually disclose its material investment holdings to the department.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/>The initial disclosure required by this

section shall include material investment holdings covering the five calendar years prior to January 1, 2027.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>Following the initial disclosure, each health care service plan shall update its disclosure annually to include material investment holdings for the immediately preceding calendar year.</xhtml:p><xhtml:p>(3)<xhtml:span class="EnSpace"/>Annual disclosures shall be submitted to the department on or before July of each year, unless otherwise specified by regulation, beginning on July 1, 2027.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>The department shall prominently display, and make accessible to the public, the disclosures required by this

section on the department’s internet website.</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>For purposes of this section, “material investment holding” means a direct or indirect ownership interest, financial stake, or beneficial interest in an entity, fund, asset, or investment vehicle that, individually or in the aggregate, is of such significance that a reasonable person would consider it important in evaluating the financial position, priorities, or potential conflicts of interest of the reporting health care service plan.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection><caml:LawSection id="id_BEB7AF2E-C412-4797-85A0-E6B233D30019"><caml:Num>1399.68.</caml:Num><caml:LawSectionVersion id="id_820D177E-D610-4B8F-B4D7-E5C22990F8A0"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>If a health care service plan fails to comply with the disclosure requirements of

Section 1399.67 within days of the reporting deadline, the department shall assess a civil penalty against the plan.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The civil penalty in subdivision (

a) shall be one thousand dollars ($1,000) per day for each day the health care service plan remains out of compliance following the 30-day grace period.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/>A health care service plan that fails to comply with

Section 1399.67 shall prominently post a notice on its public internet website stating that the plan is not in compliance with California law requiring disclosure of investment holdings.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>The department and Covered California shall prominently post the plan’s noncompliance status on their internet websites until compliance is achieved.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection></caml:LawHeading></caml:Fragment></caml:BillSection><caml:BillSection id="id_C61D5C7A-F2A7-4575-B84F-F70DCC1717EE"><caml:Num>SEC. 3.</caml:Num><caml:ActionLine action="IS_ADDED" xlink:href="urn:caml:codes:INS:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'7.5.'%5D)" xlink:label="fractionType: LAW_SPREAD||commencingWith: 10609.1" xlink:type="locator">Chapter 7.5 (commencing with

Section 10609.1) is added to Part of Division of the <caml:DocName>Insurance Code</caml:DocName>, to read:</caml:ActionLine><caml:Fragment><caml:LawHeading id="id_2714CBF4-1F6E-48E5-B921-47CF054CCA95" type="CHAPTER"><caml:Num>7.5.</caml:Num><caml:LawHeadingVersion id="id_81ADCB35-6ECC-4407-A3A3-05B282568426"><caml:LawHeadingText>Health Insurer Investment Transparency</caml:LawHeadingText></caml:LawHeadingVersion><caml:LawSection id="id_955E3FF9-1839-4A4D-A59A-22EE27D150F0"><caml:Num>10609.1.</caml:Num><caml:LawSectionVersion id="id_23AA9A78-810D-4242-B2AF-217B879B41C4"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>A health insurer regulated by the department shall annually disclose its material investment holdings to the department.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/>The initial disclosure required by this

section shall include material investment holdings covering the five calendar years prior to January 1, 2027.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>Following the initial disclosure, each health insurer shall update its disclosure annually to include material investment holdings for the immediately preceding calendar year.</xhtml:p><xhtml:p>(3)<xhtml:span class="EnSpace"/>Annual disclosures shall be submitted to the department on or before July of each year, unless otherwise specified by regulation, beginning on July 1, 2027.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>The department shall prominently display, and make accessible to the public, the disclosures required by this

section on the department’s internet website.</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>For purposes of this section, “material investment holding” means a direct or indirect ownership interest, financial stake, or beneficial interest in an entity, fund, asset, or investment vehicle that, individually or in the aggregate, is of such significance that a reasonable person would consider it important in evaluating the financial position, priorities, or potential conflicts of interest of the reporting health insurer.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection><caml:LawSection id="id_511834DF-7841-42B4-B4BB-C5A6D3748DB1"><caml:Num>10609.2.</caml:Num><caml:LawSectionVersion id="id_740DF6B8-07A5-41B2-BFEA-108BCA898D13"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>If a health insurer fails to comply with the disclosure requirements of

Section 10609.1 within days of the reporting deadline, the department shall assess a civil penalty against the insurer.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The civil penalty in subdivision (

a) shall be one thousand dollars ($1,000) per day for each day the health insurer remains out of compliance following the 30-day grace period.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/>A health insurer that fails to comply with

Section 10609.1 shall prominently post a notice on its public internet website stating that the insurer is not in compliance with California law requiring disclosure of investment holdings.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>The department and Covered California shall prominently post the insurer’s noncompliance status on their internet websites until compliance is achieved.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection></caml:LawHeading></caml:Fragment></caml:BillSection><caml:BillSection id="id_00F01528-DA7A-40BF-A4AA-7D23CF494D36"><caml:Num>SEC. 4.</caml:Num><caml:Content><xhtml:p>No reimbursement is required by this act pursuant to

Section of

Article XIII<xhtml:span class="ThinSpace"/>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 of the Government Code, or changes the definition of a crime within the meaning of

Section of

Article XIII<xhtml:span class="ThinSpace"/>B of the California Constitution.</xhtml:p></caml:Content></caml:BillSection>"?>

SEC. 2.

Section is added to the Government Code , immediately following

Section 100523 , to read: 100524. (

a) A carrier participating in the Exchange shall annually disclose its material investment holdings to the Exchange. The disclosure shall include both of the following:

(1) The largest investment holdings of the carrier, regardless of whether or not those holdings are reported through a Form filed with the United States Department of Labor, other regulatory filing, subsidiary, affiliate, pooled investment vehicle, or other investment structure.

(2) A copy of the carrier’s Form filed with the United States Department of Labor. (b)

(1) The initial disclosure required by subdivision (

a) shall include material investment holdings covering the five calendar years before January 1, 2027.

(2) Following the initial disclosure, a carrier shall update its disclosure annually to include material investment holdings for the immediately preceding calendar year.

(3) Annual disclosures shall be submitted to the Exchange on or before July of each year, unless otherwise specified by regulation, beginning on July 1, 2027. (

c) The Exchange shall prominently display, and make accessible to the public, the disclosures required by this

section and the carrier’s Form on the Exchange’s internet website. (d)

(1) If a carrier fails to comply with the disclosure requirements of this

section within days of the reporting deadline, the Exchange shall assess an administrative penalty against the carrier.

(2) The administrative penalty shall be one thousand dollars ($1,000) per day for each day the carrier remains out of compliance following the 30-day grace period.

(3) A carrier that fails to comply with the disclosure requirements of this

section shall prominently post a notice on its public internet website stating that the carrier is not in compliance with California law requiring disclosure of investment holdings.

(4) The Exchange shall prominently post the carrier’s noncompliance status on its internet website until compliance is achieved. (

e) For purposes of this section, “material investment holdings” means investments the carrier has made in a calendar year that are a direct or indirect ownership interest, financial stake, or beneficial interest in an entity, fund, asset, or investment vehicle.