AB 298 would stop large-group health plans and insurers from charging deductibles, coinsurance, copayments, or other cost-sharing for in-network health care services delivered to enrollees or insureds under 21. It also bars providers or others from billing or seeking reimbursement from those enrollees or policyholders for those in-network services.
The bill treats preventive care and high-deductible health plans (HDHPs) as special cases: it preserves some HDHP mechanics while carving out no-cost preventive care for under-21s and limits when plans can impose cost-sharing. For administrators, insurers, and employers, the measure forces operational changes to claims processing, network agreements, premium-setting, and reporting — and it raises enforcement questions because the legislative digest says willful violations by plans would be criminalized.
At a Glance
What It Does
Requires that large-group health care service plan contracts and large-group health insurance policies issued, amended, or renewed on or after the bill’s effective date may not impose any deductible, coinsurance, copayment, or other cost-sharing for in-network services provided to enrollees or insureds under age 21. It also forbids billing enrollees or policyholders for those in-network services and defines "in-network" broadly to include services at contracting facilities and certain noncontracting providers.
Who It Affects
Large-group plans and insurers regulated by the Department of Managed Health Care and the Department of Insurance (fully insured large-group markets), employers that buy large-group coverage, pediatric and emergency care providers who treat under-21 patients, and families of covered minors.
Why It Matters
This is a state-level mandate that shifts cost-sharing away from minors at point of care, likely altering premium calculations, network management, and plan design (especially for HDHP/HSA arrangements). It also creates a compliance burden — including a billing prohibition and possible criminal liability for willful violations — that payers, providers, and regulators will need to operationalize.
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What This Bill Actually Does
AB 298 amends California’s Health and Safety Code and Insurance Code to eliminate patient cost-sharing for in-network care received by people under 21 who are covered by large-group plans or policies that are issued, amended, or renewed on or after the bill’s effective date. The bill pairs a prohibition on imposing deductibles, coinsurance, copayments and other cost-sharing with an explicit ban on providers or other entities billing enrollees or policyholders for those in-network services.
The bill creates a tailored exception for health plans that qualify as high deductible health plans (HDHPs) eligible for Health Savings Accounts under federal law. For those HDHPs the text preserves the ability to apply a deductible for non-preventive services, but it makes preventive services deductible-free for under-21 enrollees and bars coinsurance or copayments once a deductible has been satisfied for the plan year.
In practice, that limits HDHP cost-sharing mechanics for minors and requires plan actuaries to re-evaluate how deductible and coinsurance layers operate for that age cohort."In-network health care services" is defined expansively: covered services by contracting providers, covered services delivered at contracting facilities even when a noncontracting provider provides the care, covered emergency services, and covered services from a noncontracting provider where a contracting provider is unavailable under the state’s timely access rules. The bill expressly prevents cost-sharing for covered out‑of‑network emergency services for under-21 enrollees.
The legislative digest notes willful violations by a plan may amount to a crime, and the text also includes the standard provision declaring no state reimbursement is required because the act creates or changes crimes — a point that raises enforcement and fiscal questions for local agencies and regulators.The statute, as written, targets state-regulated, fully insured large-group markets. It does not change federal law; therefore self-insured employer plans governed exclusively by ERISA may fall outside this state mandate, producing coverage differences between fully insured and self-insured groups.
Operationally, insurers and providers will need to update claims edits, enrollment systems, provider contracts, and member communications to prevent prohibited billing and to track age-based exemptions and HDHP status.
The Five Things You Need to Know
Applies to large-group health care service plan contracts and large-group health insurance policies issued, amended, or renewed on or after the bill’s effective date and prohibits deductibles, coinsurance, copayments, or other cost-sharing for in-network care delivered to enrollees/insureds under 21.
Prohibits providers or other individuals/entities from billing or seeking reimbursement from those enrollees or policyholders for in-network services covered by the prohibition.
For HDHPs eligible for HSA use, the bill (a) requires preventive services for under-21s to be exempt from the deductible and (b) bars coinsurance, copayments, or other cost-sharing once a deductible has been satisfied for the plan year.
Defines "in-network health care services" to include services by contracting providers, services at contracting facilities by noncontracting providers, covered emergency services, and services by noncontracting providers where timely access rules make contracting providers unavailable.
The legislative digest states that a willful violation by a health care service plan would be a crime and the bill contains a provision saying no state reimbursement is required because the act creates or changes crimes; enforcement mechanics and fiscal impacts are left unspecified.
Section-by-Section Breakdown
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Ban on cost-sharing and billing for under-21 enrollees in large-group plan contracts
Subdivision (a) bars large-group health care service plan contracts from imposing deductibles, coinsurance, copayments or other cost-sharing on in-network services for enrollees under age 21, subject to the HDHP carve-out in subdivision (c). Subdivision (b) forbids billing or seeking reimbursement from the enrollee or contractholder for those in-network services. Practically, plans must update member eligibility logic and claims edits to stop applying age‑based cost-sharing and to prevent provider balance billing for these covered in‑network services.
HDHP/HSA carve-out and how cost-sharing can operate for HDHPs
For large-group contracts that qualify as federally defined HDHPs eligible for HSA use, the subsection preserves some HDHP mechanics while limiting cost-sharing for minors: it prohibits deductibles, coinsurance, copays or other cost-sharing for preventive services for under‑21 enrollees, and it forbids coinsurance, copays or other cost-sharing for in‑network services once a plan-year deductible has been satisfied. That creates an unusual structure in which an HDHP may collect deductible amounts for non‑preventive care but cannot layer post‑deductible cost‑sharing for under‑21 members.
Definition of in‑network services and emergency-service treatment
Subdivision (d) sets a broad definition of "in‑network health care services," explicitly capturing services by contracting providers, services at contracting facilities even when a noncontracting provider delivers them, covered emergency services, and services from noncontracting providers where timely access rules apply. Subdivision (e) clarifies the section does not expand the required scope of out‑of‑network emergency coverage, but it prohibits imposing cost-sharing for covered out‑of‑network emergency services on under‑21 enrollees.
Mirror prohibition for large-group health insurance policies
This section duplicates the Health & Safety Code provisions for large-group health insurance policies regulated by the Department of Insurance, carrying the same prohibitions, HDHP carve-out, in‑network definition, and emergency-service treatment language. Stakeholders regulated by DOI must follow the same operational and compliance changes as plans under DMHC authority.
Reimbursement/constitutional clause
Declares no state reimbursement is required under Article XIII B, Section 6 because the bill creates or changes crimes or infractions (per Section 17556 of the Government Code). That language signals the drafters’ view that the fiscal exposure to local agencies is limited by the theory that the act’s costs derive from criminalization, but it does not flesh out how enforcement or investigative costs for local regulators would be handled.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Enrollees and insureds under 21: Eliminates point‑of‑care cost-sharing for in‑network care and covered emergency services, reducing immediate out‑of‑pocket expenses and lowering the financial barrier to seeking preventive and urgent services.
- Families and guardians of minors: Provides financial predictability for health care of dependents under 21 by removing unexpected copays, coinsurance or deductible obligations for in‑network treatment.
- Pediatric and adolescent public‑health advocates: Likely to see increased uptake of preventive services and reduced delays in care among under‑21 populations, particularly where cost-sharing previously discouraged use.
- Emergency department patients under 21: Removes cost-sharing for covered emergency services (including out‑of‑network emergency care), lowering the risk of surprise bills for emergency treatment.
Who Bears the Cost
- Large‑group insurers and health care service plans (fully insured market): Face higher claim costs and administrative expenses to redesign claims logic, update provider contracts, and absorb amounts previously collected as cost-sharing.
- Employers purchasing fully insured large‑group coverage: May see premium increases passed through by carriers or changes in plan design offerings, raising overall employee benefits costs.
- Providers and contracting health facilities: Risk reimbursement disputes and write‑offs if insurers deny payment and the provider is barred from billing the enrollee; systems and contract changes will be required to comply with the billing prohibition.
- State regulators and compliance teams: Must develop enforcement protocols for the billing prohibition and potential criminal violations, increasing regulatory workload without detailed enforcement mechanics in the statute.
Key Issues
The Core Tension
The central policy trade-off is straightforward but sharp: protect young people from point‑of‑care financial barriers to necessary and preventive health care, or accept that shifting those costs away from minors will raise costs elsewhere — on insurers, employers, other enrollees, or providers — potentially leading to higher premiums, narrower networks, or administrative strain. That trade‑off pits immediate affordability for minors against broader cost allocation and regulatory complications, including potential conflicts with federal ERISA preemption and HSA/HDHP rules.
The bill forces a redistribution of cost: removing point‑of‑care cost‑sharing for under‑21 enrollees shifts costs into premiums, provider reimbursement, or network arrangements. Actuaries and plan sponsors will need to quantify that shift; absent explicit rate‑review language, premium impacts will flow through existing rate processes and could manifest as higher premiums for employer groups or changes to covered benefits for other age cohorts.
Insurers may respond by narrowing networks for pediatric services, tightening medical necessity controls, or altering provider reimbursement rates for services to under‑21 patients.
Operationally, the billing prohibition raises practical questions for claims adjudication and provider recourse. If a plan denies payment for a disputed in‑network claim, the provider cannot balance‑bill the enrollee under this statute; that creates a potential increase in bad debt or disputes between providers and payers.
The HDHP/HSA carve‑out attempts to preserve federal HDHP rules but creates an atypical cost‑sharing flow (deductibles may apply but coinsurance is barred once deductibles are satisfied), which could conflict with IRS HDHP parameters or require careful plan-level mapping to avoid HSA compatibility issues.
Finally, the statute applies to state‑regulated, fully insured large‑group markets; self‑insured ERISA plans are likely unaffected, producing coverage disparity between similarly situated employees. The bill’s digest also mentions criminal liability for willful violations by plans — a heavy enforcement tool that is not operationalized in the statutory text.
Regulators, plans, and providers will need guidance on how to interpret intent, document compliance, and resolve billing disputes without exposing plans to criminal penalties or providers to uncompensated care.
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