SB 581: State contributions: California Excellence Fund.
- Session Year: 2017-2018
- House: Senate
- Latest Version Date: 2018-02-05
Existing law requires, whenever any person donates any money to the state, the Treasurer to receive it upon the receipt of a certificate from the Controller. Existing law requires, if the donor at the time of making the donation files with the Controller a written designation of the fund or appropriation the person desires to benefit thereby, that donation to be credited accordingly. Under existing law, if a designation is not made, the donation is required to be credited to the State School Fund. The California Constitution requires the calculation, as specified, of a minimum amount of state funding to be provided each fiscal year for allocation to school districts and community college districts.
This bill would create the California Excellence Fund in the General Fund to accept monetary contributions to the State of California for exclusively public purposes. This bill would allow the donor to designate, when making the monetary contribution, which of several specified purposes for which the contribution could be used. This bill would require amounts in the California Excellence Fund to be first transferred to the General Fund and second, upon appropriation by the Legislature, for the purposes designated by donors, as provided. This bill would require that the funds transferred to the General Fund be considered for purposes of the calculation of a minimum amount of state funding to be provided each fiscal year for allocation to school districts and community college districts.
This bill would require the Treasurer to establish a procedure for the public to make monetary contributions to the California Excellence Fund and to provide to the Department of Finance information about the aggregate amount of monetary contributions made to the fund and the aggregate amounts available for each purpose designated by donors, as specified.
This bill would become operative only if SB 227 of the 201718 Regular Session is enacted and takes effect on or before January 1, 2019.
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 also provides for the regulation of health insurers by the Department of Insurance. The California Continuation Benefits Replacement Act (Cal-COBRA) requires health care service plans and health insurers providing coverage under a group benefit plan to employers of 2 to 19 eligible employees to offer a continuation of that coverage for a specified period of time to certain qualified beneficiaries, as specified. Existing law requires a group benefit plan that is subject to Cal-COBRA to make specified disclosures to covered employees, including that a covered employee who is considering declining continuation of coverage should be aware that companies selling individual health insurance may require a review of the employees medical history that could result in a higher premium or denial of coverage.This bill would eliminate the disclosure requirement described above.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 also provides for the regulation of health insurers by the Department of Insurance. The California Continuation Benefits Replacement Act (Cal-COBRA) requires health care service plans and health insurers providing coverage under a group benefit plan to employers of 2 to 19 eligible employees to offer a continuation of that coverage for a specified period of time to certain qualified beneficiaries, as specified. Existing law requires a group benefit plan that is subject to Cal-COBRA to make specified disclosures to covered employees, including that a covered employee who is considering declining continuation of coverage should be aware that companies selling individual health insurance may require a review of the employees medical history that could result in a higher premium or denial of coverage.
This bill would eliminate the disclosure requirement described above.
(a)(1)The California Excellence Fund is hereby created in the General Fund to accept monetary contributions to the State of California for exclusively public purposes as specified under Section 170 of the Internal Revenue Code, relating to charitable, etc., contributions and gifts. Section 11005 shall not apply to monetary contributions received by the California Excellence Fund.
(2)The donor shall be able to designate when making the monetary contribution in paragraph (1) as to which of the following purposes the contribution could be used for after the allocations are made to the General Fund pursuant to subdivision (b):
(A)Public schools that provide instruction in kindergarten or grades 1 to 12, inclusive.
(B)The institutions of the University of California.
(C)The institutions of the California State University.
(D)The institutions of the California Community Colleges.
(E)State parks.
(b)All amounts in the fund shall be allocated as follows:
(1)First, transferred to the General Fund an amount equal to the aggregate amount of certified credits allowed pursuant to subparagraph (AD) of paragraph (1) of subdivision (c) of Section 17039 and Section 17053.88 of the Revenue and Taxation Code for the taxable year. Funds transferred to the General Fund shall be considered General Fund revenues for purposes of Sections 8 and 8.5 of Article XVI of the California Constitution.
(2)Second, upon appropriation by the Legislature, for the purposes specified in paragraph (2) of subdivision (a).
(c)(1)For the purposes of this section, the Treasurer shall do both of the following:
(A)Establish a procedure for the public to make monetary contributions to the California Excellence Fund.
(B)Provide to the Department of Finance information about the aggregate amount of monetary contributions made to the California Excellence Fund and the aggregate amounts available for each designated purpose specified in paragraph (2) of subdivision (a) at least on a quarterly basis and as often as necessary for the state budget, beginning on January 1, 2019.
(2)(A)The Treasurer shall adopt any regulations necessary or appropriate to implement this section.
(B)The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3) shall not apply to any regulation adopted by the Treasurer pursuant to subparagraph (A).
SEC. 2.This act shall become operative only if Senate Bill 227 of the 201718 Regular Session is enacted and takes effect on or before January 1, 2019.
SECTION 1.Section 1366.24 of the Health and Safety Code is amended to read:1366.24.(a)Every health care service plan evidence of coverage, provided for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.(b)This disclosure shall state that all enrollees who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 1366.21, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the health care service plan, or the employer if the employer contracts to perform the administrative services as provided for in Section 1366.25, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 1366.21 within 60 days of the date of the qualifying event. This disclosure shall inform enrollees that failure to make the notification to the health care service plan, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article shall request the continuation in writing and deliver the written request, by first-class mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 1366.25, within the 60-day period following the later of (1) the date that the enrollees coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the enrollee was sent notice pursuant to subdivision (e) of Section 1366.25 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the health care service plan, in accordance with the terms and conditions of the plan contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 1366.25, the amount of the required premium payment, as set forth in Section 1366.26. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the employer has contracted with the plan to perform the administrative services pursuant to subdivision (d) of Section 1366.25, within 45 days of the date the qualified beneficiary provided written notice to the health care service plan or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment shall equal an amount sufficient to pay any required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to subdivision (b) of Section 1366.27 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.(d)Prior to August 1, 1998, every health care service plan shall provide to all covered employees of employers subject to this article a written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this section a new or amended evidence of coverage that includes the disclosures required by this section. Any specialized health care service plan that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchasers of benefits.(e)Every plan disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an enrollee may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the plans evidence of coverage.SEC. 2.Section 10128.54 of the Insurance Code is amended to read:10128.54.(a)Every insurers evidence of coverage for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.(b)This disclosure shall state that all insureds who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 10128.51, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the insurer, or the employer if the employer contracts to perform the administrative services as provided for in Section 10128.55, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 10128.51 within 60 days of the date of the qualifying event. This disclosure shall inform insureds that failure to make the notification to the insurer, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article shall request the continuation in writing and deliver the written request, by first-class mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the disability insurer, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 10128.55, within the 60-day period following the later of (1) the date that the insureds coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the insured was sent notice pursuant to subdivision (e) of Section 10128.55 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the disability insurer, in accordance with the terms and conditions of the policy or contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 10128.55, the amount of the required premium payment, as set forth in Section 10128.56. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the disability insurer, or to the employer if the employer has contracted with the insurer to perform the administrative services pursuant to subdivision (d) of Section 10128.55, within 45 days of the date the qualified beneficiary provided written notice to the insurer or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment shall equal an amount sufficient to pay all required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to Section 10128.57 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.(d)Prior to August 1, 1998, every insurer shall provide to all covered employees of employers subject to this article written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this article a new or amended evidence of coverage that includes the disclosures required by this section. Any insurer that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits, and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchases of benefits.(e)Every disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an insured may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the evidence of coverage.(a)Every health care service plan evidence of coverage, provided for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all enrollees who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 1366.21, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the health care service plan, or the employer if the employer contracts to perform the administrative services as provided for in Section 1366.25, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 1366.21 within 60 days of the date of the qualifying event. This disclosure shall inform enrollees that failure to make the notification to the health care service plan, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must shall request the continuation in writing and deliver the written request, by first-class mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 1366.25, within the 60-day period following the later of (1) the date that the enrollees coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the enrollee was sent notice pursuant to subdivision (e) of Section 1366.25 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the health care service plan, in accordance with the terms and conditions of the plan contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 1366.25, the amount of the required premium payment, as set forth in Section 1366.26. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the employer has contracted with the plan to perform the administrative services pursuant to subdivision (d) of Section 1366.25, within 45 days of the date the qualified beneficiary provided written notice to the health care service plan or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must shall equal an amount sufficient to pay any required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to subdivision (b) of Section 1366.27 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every health care service plan shall provide to all covered employees of employers subject to this article a written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this section a new or amended evidence of coverage that includes the disclosures required by this section. Any specialized health care service plan that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchasers of benefits.
(e)Every plan disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an enrollee may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the plans evidence of coverage.
(f)Every disclosure issued, amended, or renewed on and after July 1, 2006, for a group benefit plan subject to this article shall include the following notice:Please examine your options carefully before declining this coverage. You should be aware that companies selling individual health insurance typically require a review of your medical history that could result in a higher premium or you could be denied coverage entirely.SEC. 2.Section 10128.54 of the Insurance Code is amended to read:10128.54.(a)Every insurers evidence of coverage for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all insureds who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 10128.51, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the insurer, or the employer if the employer contracts to perform the administrative services as provided for in Section 10128.55, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 10128.51 within 60 days of the date of the qualifying event. This disclosure shall inform insureds that failure to make the notification to the insurer, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must shall request the continuation in writing and deliver the written request, by first-class mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the disability insurer, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 10128.55, within the 60-day period following the later of (1) the date that the insureds coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the insured was sent notice pursuant to subdivision (e) of Section 10128.55 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the disability insurer, in accordance with the terms and conditions of the policy or contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 10128.55, the amount of the required premium payment, as set forth in Section 10128.56. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the disability insurer, or to the employer if the employer has contracted with the insurer to perform the administrative services pursuant to subdivision (d) of Section 10128.55, within 45 days of the date the qualified beneficiary provided written notice to the insurer or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must shall equal an amount sufficient to pay all required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to Section 10128.57 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every insurer shall provide to all covered employees of employers subject to this article written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this article a new or amended evidence of coverage that includes the disclosures required by this section. Any insurer that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits, and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchases of benefits.
(e)Every disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an insured may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the evidence of coverage.
(f)Every disclosure form issued, amended, or renewed on and after July 1, 2006, for a group benefit plan subject to this article shall include the following notice:Please examine your options carefully before declining this coverage. You should be aware that companies selling individual health insurance typically require a review of your medical history that could result in a higher premium or you could be denied coverage entirely.|
Date
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Status
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|---|---|
| Jun 18, 2018 | June 18 set for first hearing canceled at the request of author. |
| Jun 7, 2018 | From committee: Be re-referred to Coms. on REV. & TAX. and BUDGET. (Ayes 6. Noes 0.) (June 7). Re-referred to Com. on REV. & TAX. |
| Feb 8, 2018 | Re-referred to Com. on RLS. pursuant to Assembly Rule 97. |
| Feb 5, 2018 | Read third time and amended. |
| Jan 30, 2018 | From inactive file. |
| Jan 29, 2018 | Notice of intention to remove from inactive file given by Assembly Member Calderon. |
| Jul 3, 2017 | Ordered to inactive file on request of Assembly Member Bonta. |
| Jun 29, 2017 | From consent calendar on motion of Assembly Member Bonta. |
| Jun 22, 2017 | Read second time. Ordered to consent calendar. |
| Jun 21, 2017 | From committee: Do pass. Ordered to consent calendar. (Ayes 15. Noes 0.) (June 20). |
| Jun 8, 2017 | Referred to Com. on HEALTH. |
| May 31, 2017 | In Assembly. Read first time. Held at Desk. |
| May 30, 2017 | Read third time. Passed. (Ayes 40. Noes 0. Page 1245.) Ordered to the Assembly. |
| Apr 24, 2017 | Read second time. Ordered to third reading. |
| Apr 20, 2017 | From committee: Do pass. (Ayes 9. Noes 0. Page 808.) (April 19). |
| Apr 4, 2017 | Set for hearing April 19. |
| Mar 2, 2017 | Referred to Com. on HEALTH. |
| Feb 21, 2017 | From printer. May be acted upon on or after March 23. |
| Feb 17, 2017 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
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Date
|
Description
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Location
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Votes
|
|
|---|---|---|---|---|
| Jun 7, 2018 | Be re-referred to the Committees on [Revenue and Taxation] and [Budget] | Assembly Standing Committee on Rules |
Passed |
|
| Jun 20, 2017 | Do pass. To Consent Calendar. | Assembly Standing Committee on Health |
Passed |
|
| May 30, 2017 | Senate 3rd Reading SB581 De León | Senate Floor |
Passed |
|
| Apr 19, 2017 | Do pass | Senate Standing Committee on Health |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
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Date
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|---|---|---|
| Health Access California | ** Support | Jun 15, 2017 |
| SEIU California | ** Support | Jun 15, 2017 |
SENATE THIRD READING
STR Bill Id:SB 581
Author:(De León)
As Introduced Ver:February 17, 2017
Majority vote
SENATE VOTE: 40-0
Committee | Votes | Ayes | Noes |
Health | 15-0 | Wood, Maienschein, Bonta, Burke, Gallagher, Limón, McCarty, Nazarian, Patterson, Quirk-Silva, Ridley-Thomas, Rodriguez, Santiago, Thurmond, Waldron |
SUMMARY: Deletes a disclosure requirement that health care service plans (health plans) and health insurers of specified small group benefit plans include notice that companies selling individual health insurance typically require a review of medical history that could result in higher premium or coverage denial.
FISCAL EFFECT: None
COMMENTS: According to the author, this bill is necessary to relieve employers of the requirement to issue a notice that is no longer relevant. Regardless of what happens at the federal level, it is clear that medical underwriting, or the practice of denying or pricing health coverage on the basis of a pre-existing medical condition will no longer be tolerated or legal. The author states that this bill merely deletes an obsolete provision that required a person who is eligible for the California Continuation Benefits Replacement Act (Cal-COBRA) to be informed that the health insurance company may require a medical history review that could result in a higher premium or a coverage denial.
Enacted in March 2010, the federal Patient Protection and Affordable Care Act (ACA) provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expands access to quality, affordable insurance and health care. The ACA also implements additional insurance market requirements that are consumer friendly, including prohibiting health insurers from excluding anyone from coverage. Before the ACA, health insurance sold in the individual market in most states was medically underwritten meaning insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage. Based on these underwriting, insurers frequently denied health insurance coverage, charged more for that coverage, and limited or refused to cover benefits because of a preexisting condition. Additionally, rate restrictions limit how much insurance companies can vary premiums charged to individuals and businesses based on factors such as health status, age, tobacco use, and gender. Before the ACA, federal law did not place any limits on the ways that insurance companies set their premium rates. The ACA requires insurers to set prices to reflect expected costs for a single risk pool. Rating variation is permitted, but not required, for only four factors: a) age (limited to three to one ratio – older individuals can be charged no more than three times the premiums paid by younger adults); b) geographic rating area; c) family composition; and, d) tobacco use.
SEIU California states that this bill deletes an obsolete requirement to inform a Cal-COBRA eligible individual they could be denied or pay a higher premium for coverage based on a medical history review since an individual's pre-existing conditions are no longer considered in the denying or pricing of health care coverage. Health Access California states that this now obsolete notice used to serve an important function of informing consumers of their Cal-COBRA options that may have been more affordable than other options available to them in a pre-ACA world of medical underwriting and coverage denials.
There was no registered opposition to this bill.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0001082
Date of Hearing: June 20, 2017
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
SBPCA Bill Id:SB 581
Author:(De León) – As Introduced Ver:February 17, 2017
SENATE VOTE: 40-0
SUBJECT: Cal-COBRA: disclosures.
SUMMARY: Deletes a disclosure requirement that health care service plans (health plans) and health insurers of specified small group benefit plans include notice that companies selling individual health insurance typically require a review of medical history that could result in higher premium or coverage denial.
EXISTING LAW:
- Establishes the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) under federal law that applies to employers and group health plans that cover 20 or more employees and allows enrollees to keep their group health plan for at least 18 months when a job ends or hours are cut.
- Establishes the California Continuation Benefits Replacement Act (Cal-COBRA) that applies to employers and group health plans that cover two to19 employees and allows enrollees to keep their health plan for up to 36 months and may be available after COBRA ends.
- Establishes the federal Patient Protection and Affordable Care Act (ACA), which enacts various health care coverage market reforms including the guaranteed availability of insurance.
- Regulates health plans under the Knox-Keene Health Care Service Plan Act of 1975 through the Department of Managed Health Care and regulates health insurers under the Insurance Code through the California Department of Insurance.
- Defines small group benefit plan as any health care service plan or specialized plan contract provided to an employer with two to 19 eligible employees, as specified, and a policy or contract including group policies of vision-only and dental-only coverage, to an employer with two to 19 eligible employees, written or administered by a health insurance carrier that arranges or provides health care benefits for the covered eligible employees of a small employer and their dependents.
- Requires health plans and insurers to disclose to covered employees of small group benefit plans, as specified, that the enrollee or insured may be entitled to continuation of group coverage upon separation and that additional information regarding eligibility for this coverage may be found in the health plan’s or insurer’s evidence of coverage.
- Requires every disclosure issued, amended, or renewed on and after July 1, 2006, for a small group benefit plan to include the following notice: “Please examine your options carefully before declining this coverage. You should be aware that companies selling individual health insurance typically require a review of your medical history that could result in a higher premium or you could be denied coverage entirely.”
FISCAL EFFECT: None
COMMENTS:
- PURPOSE OF THIS BILL. According to the author, this bill is necessary to relieve employers of the requirement to issue a notice that is no longer relevant. Regardless of what happens at the federal level, it is clear that medical underwriting, or the practice of denying or pricing health coverage on the basis of a pre-existing medical condition will no longer be tolerated or legal. The author states that this bill merely deletes an obsolete provision that required a person who is eligible for Cal-COBRA to be informed that the health insurance company may require a medical history review that could result in a higher premium or a coverage denial.
- BACKGROUND. Enacted in March 2010, the ACA provides the framework, policies, regulations and guidelines for implementation of comprehensive health care reform by the states. The ACA expands access to quality, affordable insurance and health care. The ACA also implements additional insurance market requirements that are consumer friendly, including prohibiting health insurers from excluding anyone from coverage. Before the ACA, health insurance sold in the individual market in most states was medically underwritten meaning insurers evaluated the health status, health history, and other risk factors of applicants to determine whether and under what terms to issue coverage. Based on these underwriting, insurers frequently denied health insurance coverage, charged more for that coverage, and limited or refused to cover benefits because of a preexisting condition. Additionally, rate restrictions limit how much insurance companies can vary premiums charged to individuals and businesses based on factors such as health status, age, tobacco use, and gender. Before the ACA, federal law did not place any limits on the ways that insurance companies set their premium rates. The ACA requires insurers to set prices to reflect expected costs for a single risk pool. Rating variation is permitted, but not required, for only four factors: a) age (limited to three to one ratio – older individuals can be charged no more than three times the premiums paid by younger adults); b) geographic rating area; c) family composition; and, d) tobacco use.
- SUPPORT. SEIU California states that this bill deletes an obsolete requirement to inform a Cal-COBRA eligible individual they could be denied or pay a higher premium for coverage based on a medical history review since an individual’s pre-existing conditions are no longer considered in the denying or pricing of health care coverage. Health Access California states that this now obsolete notice used to serve an important function of informing consumers of their Cal-COBRA options that may have been more affordable than other options available to them in a pre-ACA world of medical underwriting and coverage denials.
- PREVIOUS LEGISLATION.
- SB 503 (Hernandez) of 2015 was similar to this bill, and as introduced would have deleted the obsolete warning notice required of health plans and insurers providing small group coverage and replaced it with a notice providing information about obtaining other health coverage, including through Medi-Cal or Covered California. SB 503 was later amended in June 2016 to deal with long-term care facilities.
- AB 1180 (Pan), Chapter 441, Statutes of 2013, makes inoperative, because of the ACA, several provisions in existing law that implement state health insurance laws of the federal Health Insurance Portability and Accountability Act of 1996, and additional provisions that provide former employees rights to convert their group health insurance coverage to individual market coverage without medical underwriting. Establishes notification requirements informing individuals affected by AB 1180 of health insurance available in 2014.
- ABX1 2 (Pan), Chapter 1, Statutes of 2013-14 First Extraordinary Session and SBX1 2 (Hernandez), Chapter 2, Statutes of 2013-14 First Extraordinary Session, established the health insurance market reforms contained in the ACA specific to individual purchasers, such as prohibiting insurers from denying coverage based on preexisting conditions; and, make conforming changes to small employer health insurance laws resulting from final federal regulations.
- SB 961 (Hernandez) and AB 1461 (Monning) of 2012 were identical bills that would have reformed California’s individual market similar to the provisions in SBX1 2. SB 961 and AB 1461 were vetoed by Governor Brown who indicated that without the strong foundation that federal law provides, a state-level mandate on insurers alone could encourage healthy people to wait until they got sick or injured before purchasing coverage and would lead to skyrocketing premiums, making coverage more unaffordable.
- AB 1083 (Monning), Chapter 854, Statutes of 2012, establishes reforms in the small group health insurance market to implement the ACA.
- SB 900 (Alquist), Chapter 659, Statutes of 2010, and AB 1602 (Perez), Chapter 655, Statutes of 2010, establishes the California Health Benefit Exchange.
REGISTERED SUPPORT / OPPOSITION:
Support
Health Access California
SEIU California
Opposition
None on file.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 581 |
THIRD READING
Bill No: SB 581
Introduced: 2/17/17
SENATE HEALTH COMMITTEE: 9-0, 4/19/17
AYES: Hernandez, Nguyen, Atkins, Leyva, Mitchell, Monning, Newman, Nielsen, Roth
SUBJECT: Cal-COBRA: disclosures
DIGEST: This bill deletes a disclosure notice that is no longer accurate related to group benefit plan continuation coverage.
Existing law:
- Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Services Plan Act of 1975 and the California Department of Insurance (CDI) to regulate health insurers.
- Defines group benefit plan as any health care service plan or specialized plan contract provided to an employer with two to 19 eligible employees, as specified and a policy or contract including group policies of vision-only and dental-only coverage, to an employer with two to 19 eligible employees, written or administered by a health insurance carrier that arranges or provides health care benefits for the covered eligible employees of a small employer and their dependents.
- Requires health plans and insurers to disclose to covered employees of small group benefit plans, as specified, that the enrollee or insured may be entitled to continuation of group coverage upon separation and that additional information regarding eligibility for this coverage may be found in the plan’s or insurer’s evidence of coverage.
- Requires every disclosure issued, amended, or renewed on and after July 1, 2006, for a small group benefit plan to include the following notice:
“Please examine your options carefully before declining this coverage. You should be aware that companies selling individual health insurance typically require a review of your medical history that could result in a higher premium or you could be denied coverage entirely.”
This bill deletes a specific disclosure requirement on certain small group benefit plans that indicates companies selling individual health insurance typically require a review of medical history that could result in higher premium or denial of coverage.
Comments
- Author’s statement. According to the author, this bill is necessary to relieve employers of the requirement to issue a notice that is no longer relevant. Regardless of what happens at the federal level, it is clear that medical underwriting, or the practice of denying or pricing health coverage on the basis of a pre-existing medical condition will no longer be tolerated or legal. This bill merely deletes an obsolete provision that required a person who is eligible for Cal-COBRA to be informed that the health insurance company may require a medical history review that could result in a higher premium or a coverage denial.
- Consolidated Omnibus Budget Reconciliation Act (COBRA). Federal law that governs continuation coverage for employees leaving group coverage is called the COBRA. It applies to employers who have more than 20 employees, and requires the terminated employee to pay 102% of the premium in order to maintain coverage. California law, referred to as Cal-COBRA, applies to employers that have two to 19 employees, and requires the terminated employee to pay 110% of the premium.
- Affordable Care Act (ACA). The ACA makes statutory changes affecting the regulation of and payment for certain types of private health insurance. As of 2014, individuals are required to maintain health insurance or pay a penalty, with exceptions for financial hardship (if health insurance premiums exceed 8% of household adjusted gross income), religion, incarceration, and immigration status. Several insurance market reforms are also required, such as prohibitions against health insurers imposing pre-existing health condition exclusions. These reforms impose new requirements on states related to the allocation of insurance risk, prohibit insurers from basing eligibility for coverage on health status-related factors, allow the offering of premium discounts or rewards based on enrollee participation in wellness programs, impose nondiscrimination requirements, require insurers to offer coverage on a guaranteed issue and renewal basis, and determine premiums based on adjusted community rating (age, family, geography, and tobacco use). Additionally, states have been permitted to establish health benefit exchanges where individuals with income below 400% of the federal poverty level can qualify for credits toward their premium costs and subsidies toward their cost-sharing for insurance purchased through an exchange. California has established Covered California, as a state-based exchange that is operating as an independent government entity with a five-member Board of Directors.
Related/Prior Legislation
SB 503 (Hernandez of 2015) similar to this bill, as introduced would have deleted the obsolete warning notice required of health plans and insurers providing small group coverage and replaced it with a notice providing information about obtaining other health coverage, including through Medi-Cal or Covered California. SB 503 was amended to deal with long-term care facilities.
AB 1180 (Pan, Chapter 441, Statutes of 2013) made inoperative, because of the ACA, several provisions in existing law that implement state health insurance laws of the federal Health Insurance Portability and Accountability Act of 1996, and additional provisions that provide former employees rights to convert their group health insurance coverage to individual market coverage without medical underwriting. Established notification requirements informing individuals affected by AB 1180 of health insurance available in 2014.
AB 2 1X (Pan, Chapter 1, Statutes of 2013-14 First Extraordinary Session) and SB 2 1X (Hernandez, Chapter 2, Statutes of 2013-14 First Extraordinary Session) established health insurance market reforms contained in the ACA specific to individual purchasers, such as prohibiting insurers from denying coverage based on pre-existing conditions; and made conforming changes to small employer health insurance laws resulting from final federal regulations.
SB 961 (Hernandez of 2012) and AB 1461 (Monning) were identical bills that would have reformed California’s individual market similar to the provisions in SBX1 2. SB 961 and AB 1461 were vetoed by Governor Brown.
AB 1083 (Monning, Chapter 854, Statutes of 2012) established reforms in the small group health insurance market to implement the ACA.
SB 900 (Alquist, Chapter 659, Statutes of 2010) and AB 1602 (Perez, Chapter 655, Statutes of 2010) established the California Health Benefit Exchange.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
Health Access California
OPPOSITION: (Verified 4/24/17)
None received
ARGUMENTS IN SUPPORT: According to Health Access California, this notice used to serve an important function of informing consumers of their Cal-COBRA options that may have been more affordable than other options available to them in a pre-ACA world of medical underwriting and coverage denials. This bill deletes this obsolete notice requirement that is no longer needed.
Prepared by: Teri Boughton / HEALTH /
5/19/17 10:04:39
**** END ****
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 581
AUTHOR: | De León | ||
VERSION: | February 17, 2017 | ||
HEARING DATE: | April 19, 2017 | ||
CONSULTANT: | Teri Boughton | ||
SUBJECT: Cal-COBRA: disclosures
SUMMARY:
This bill deletes a disclosure notice that is no longer accurate related to group benefit plan continuation coverage.
Existing law:
- Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Services Plan Act of 1975 and the California Department of Insurance (CDI) to regulate health insurers.
- Defines group benefit plan as any health care service plan or specialized plan contract provided to an employer with two to 19 eligible employees, as specified and a policy or contract including group policies of vision-only and dental-only coverage, to an employer with two to 19 eligible employees, written or administered by a health insurance carrier that arranges or provides health care benefits for the covered eligible employees of a small employer and their dependents.
- Requires health plans and insurers to disclose to covered employees of small group benefit plans, as specified, that the enrollee or insured may be entitled to continuation of group coverage upon separation and that additional information regarding eligibility for this coverage may be found in the plan’s or insurer’s evidence of coverage.
- Requires every disclosure issued, amended, or renewed on and after July 1, 2006, for a small group benefit plan to include the following notice:
“Please examine your options carefully before declining this coverage. You should be aware that companies selling individual health insurance typically require a review of your medical history that could result in a higher premium or you could be denied coverage entirely.”
This bill:
- Deletes a specific disclosure requirement on certain small group benefit plans that indicates companies selling individual health insurance typically require a review of medical history that could result in higher premium or denial of coverage.
FISCAL EFFECT:
This bill is keyed non-fiscal.
COMMENTS:
- Author’s statement. According to the author, this bill is necessary to relieve employers of the requirement to issue a notice that is no longer relevant. Regardless of what happens at the federal level, it is clear that medical underwriting, or the practice of denying or pricing health coverage on the basis of a pre-existing medical condition will no longer be tolerated or legal. This bill merely deletes an obsolete provision that required a person who is eligible for Cal-COBRA to be informed that the health insurance company may require a medical history review that could result in a higher premium or a coverage denial.
- Consolidated Omnibus Budget Reconciliation Act (COBRA). Federal law that governs continuation coverage for employees leaving group coverage is called the COBRA. It applies to employers who have more than 20 employees, and requires the terminated employee to pay 102% of the premium in order to maintain coverage. California law, referred to as Cal-COBRA, applies to employers that have two to 19 employees, and requires the terminated employee to pay 110% of the premium.
- Affordable Care Act (ACA). The ACA makes statutory changes affecting the regulation of and payment for certain types of private health insurance. As of 2014, individuals are required to maintain health insurance or pay a penalty, with exceptions for financial hardship (if health insurance premiums exceed 8% of household adjusted gross income), religion, incarceration, and immigration status. Several insurance market reforms are also required, such as prohibitions against health insurers imposing pre-existing health condition exclusions. These reforms impose new requirements on states related to the allocation of insurance risk, prohibit insurers from basing eligibility for coverage on health status-related factors, allow the offering of premium discounts or rewards based on enrollee participation in wellness programs, impose nondiscrimination requirements, require insurers to offer coverage on a guaranteed issue and renewal basis, and determine premiums based on adjusted community rating (age, family, geography, and tobacco use). Additionally, states have been permitted to establish health benefit exchanges where individuals with income below 400% of the federal poverty level can qualify for credits toward their premium costs and subsidies toward their cost-sharing for insurance purchased through an exchange. California has established Covered California, as a state-based exchange that is operating as an independent government entity with a five-member Board of Directors.
- Prior legislation. SB 503 (Hernandez of 2015) similar to this bill, as introduced would have deleted the obsolete warning notice required of health plans and insurers providing small group coverage and replaced it with a notice providing information about obtaining other health coverage, including through Medi-Cal or Covered California. SB 503 was amended to deal with long-term care facilities.
- AB 1180 (Pan, Chapter 441, Statutes of 2013) makes inoperative, because of the ACA, several provisions in existing law that implement state health insurance laws of the federal Health Insurance Portability and Accountability Act of 1996, and additional provisions that provide former employees rights to convert their group health insurance coverage to individual market coverage without medical underwriting. Establishes notification requirements informing individuals affected by AB 1180 of health insurance available in 2014.
AB 2 1X (Pan) and SB 2 1X (Hernandez) establishes health insurance market reforms contained in the ACA specific to individual purchasers, such as prohibiting insurers from denying coverage based on pre-existing conditions; and makes conforming changes to small employer health insurance laws resulting from final federal regulations.
SB 961 (Hernandez of 2012) and AB 1461 (Monning) were identical bills that would have reformed California’s individual market similar to the provisions in SBX1 2. SB 961 and AB 1461 were vetoed by Governor Brown.
AB 1083 (Monning, Chapter 854, Statutes of 2012) establishes reforms in the small group health insurance market to implement the ACA.
SB 900 (Alquist, Chapter 659, Statutes of 2010) and AB 1602 (Perez, Chapter 655, Statutes of 2010) establishes the California Health Benefit Exchange.
- Support. According to Health Access California, this notice used to serve an important function of informing consumers of their Cal-COBRA options that may have been more affordable than other options available to them in a pre-ACA world of medical underwriting and coverage denials. This bill deletes this obsolete notice requirement that is no longer needed.
SUPPORT AND OPPOSITION:
Support: Health Access California
Oppose: None received
-- END --
Discussed in Hearing
1MIN
Assembly Floor
1MIN
Senate Floor
2MIN
Senate Standing Committee on Health
Bill Co-Author(s):