(a) Every health insurer that offers, issues, or renews health insurance under an individual health benefit plan, as defined in subdivision (a) of Section 10198.6, shall offer to any individual, who was covered by the insurer under an individual health benefit plan that was rescinded, a new individual health benefit plan that provides the most equivalent benefits.

(b) A health insurer that offers, issues, or renews individual health benefit plans inside or outside the California Health Benefit Exchange may also permit an individual, who was covered by the insurer under an individual health benefit plan that was rescinded, to remain covered under that individual health benefit plan, with a revised premium rate that reflects the number of persons remaining on the health benefit plan consistent with Section 10965.9.

(c) If a new individual health benefit plan is issued under subdivision (a), the insurer may revise the premium rate to reflect only the number of persons covered on the new individual health benefit plan consistent with Section 10965.9.

(d) The insurer shall notify in writing all insureds of the right to coverage under an individual health benefit plan pursuant to this section, at a minimum, when the insurer rescinds the individual health benefit plan. The notice shall adequately inform insureds of the right to coverage provided under this section.

(e) The insurer shall provide 60 days for insureds to accept the offered new individual health benefit plan under subdivision (a), and this plan shall be effective as of the effective date of the original health benefit plan and there shall be no lapse in coverage.

(f) This section shall not apply to any individual whose information in the application for coverage and related communications led to the rescission.

(g) This section shall apply notwithstanding subdivision (a) or (d) of Section 10965.3.

(h) (1) This section shall become operative on January 1, 2014, or the 91st calendar day following the adjournment of the 2013–14 First Extraordinary Session, whichever date is later.

(2) If Section 5000A of the Internal Revenue Code, as added by Section 1501 of PPACA, is repealed or amended to no longer apply to the individual market, as defined in Section 2791 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-4), this section shall become inoperative 12 months after the date of that repeal or amendment.

(Added by Stats. 2013, 1st Ex. Sess., Ch. 1, Sec. 5. (AB 2 1x) Effective September 30, 2013. Section operative January 1, 2014, by its own provisions. Conditionally inoperative, as prescribed by its own provisions. Upon inoperation, see the previous version, as amended by Sec. 4 of Ch. 1, which would resume operation.)