BILL NUMBER: AB 12 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 7, 2007
AMENDED IN SENATE JULY 18, 2007
AMENDED IN SENATE JULY 5, 2007
AMENDED IN ASSEMBLY JUNE 1, 2007
AMENDED IN ASSEMBLY APRIL 17, 2007
AMENDED IN ASSEMBLY APRIL 9, 2007
AMENDED IN ASSEMBLY MARCH 22, 2007
AMENDED IN ASSEMBLY MARCH 13, 2007
INTRODUCED BY Assembly Member Beall
(Principal coauthor: Senator Alquist)
DECEMBER 4, 2006
An act to add Division 113 (commencing with Section 131500) to the
Health and Safety Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 12, as amended, Beall. The Adult Health Coverage Expansion
Program: Santa Clara County.
Existing law requires a health care service plan and a health
insurer to fairly and affirmatively offer, market, and sell its
contract or its policy, as specified, to small employers, as defined.
Existing law also provides for a local initiative, which is defined
as a prepaid health plan organized by a county government or by
stakeholders to provide comprehensive health care to eligible
Medi-Cal beneficiaries.
This bill would provide for the creation of the Adult Health
Coverage Expansion Program as a pilot program in Santa Clara County
that would be administered by a local initiative in the county, at
the option of the local initiative. The program would provide health
care coverage to eligible employees, as specified, of a small
business, as defined, that participates in the program, not to exceed
5,000 employees in the county. The bill would authorize the
Department of Managed Health Care to authorize an increase in the
number of enrollees in the program. The bill would provide that the
program is subject to the requirements of the Knox-Keene Health Care
Service Plan Act of 1975, except as specified, and subject to
approval as to regulatory filings with the Department of Managed
Health Care. The bill would fund the program through a combination of
employer contributions, employee premiums, and any county, state,
private sector, or federal funding made available for its purposes.
The bill would authorize the local initiative to determine the amount
of employer contributions and employee
contributions premiums , subject to specified
maximum amounts, but subject to adjustment after the first year. The
bill would provide for an evaluation of the pilot program by Santa
Clara County and the local initiative in the county after 3 years.
The bill would enact other related provisions. Because the bill would
impose new duties on Santa Clara County, it would thereby impose a
state-mandated local program.
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.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) When a comprehensive health plan concept for the state is
adopted, there may still be some workers who lack health care
coverage.
(b) Seventy percent of the 1.7 million working uninsured are
employed by a business with fewer than 50 workers.
(c) Counties generally have a responsibility to provide a health
care safety net.
(d) A large number of small businesses would like to offer health
care coverage to their workers but have been unable to identify an
affordable, comprehensive health plan.
(e) It is therefore the intent of this act to provide health care
coverage on a pilot program basis to uninsured working adults in
California through the Adult Health Coverage Expansion Program.
SEC. 2. Division 113 (commencing with Section 131500) is added to
the Health and Safety Code, to read:
DIVISION 113. The Adult Health Coverage Expansion Program
CHAPTER 1. GENERAL PROVISIONS
131500. This division shall be known and may be cited as the
Adult Health Coverage Expansion Program.
131501. It is the intent of the Legislature that the Adult Health
Coverage Expansion Program provide health care coverage on a
pilot program basis to eligible adults domiciled and employed
in Santa Clara County who are without health care coverage
on a pilot program basis in Santa Clara County .
131502. The following definitions apply for purposes of this
division:
(a) "Local initiative" has the same meaning as set forth in
Section 12693.08 of the Insurance Code.
(b) "Program" means the Adult Health Coverage Expansion Program.
(c) "Small business" means an entity located in Santa Clara County
that employs 50 or fewer persons, with at least 35 percent of the
employees earning less than 350 percent of the federal poverty level
for a family size of one, and that has not offered health care
coverage to its employees for, at minimum, 12 consecutive months,
provided that the provisions of any such prior coverage required the
employer to contribute at least 50 percent of the total amount of the
premium for that coverage. For purposes of the program authorized by
this division, a small business shall be a "small employer" pursuant
to Article 3.1 (commencing with Section 1357) of Chapter 2.2 of
Division 2, subject to the provisions and exceptions of this
division. Notwithstanding the company affiliation and tax filing
provision of paragraph (1) of subdivision (l) of Section 1357, an
individual franchise outlet shall be considered a small business.
CHAPTER 2. ADMINISTRATION
131510. The program may be implemented in Santa Clara County at
the option of the local initiative, but if so implemented shall be as
a pilot program. A maximum of 5,000 employees may be covered in the
county, provided, however, that the number of enrollees may be
increased pursuant to the prior approval of the Department of Managed
Health Care. The local initiative shall administer the program.
131511. (a) In implementing the pilot program established
pursuant to this division, the local initiative in Santa Clara County
shall not be subject to the requirements of subdivision (a) of
Section 1357.03. The program shall be otherwise subject to the
requirements of Chapter 2.2 (commencing with Section 1340) of
Division 2, including Article 3.1 (commencing with Section 1357)
thereof, except as otherwise provided in this division, and shall be
subject to approval as to regulatory filings with the Department of
Managed Health Care as prescribed in Chapter 2.2 (commencing with
Section 1340) of Division 2 and in implementing regulations
promulgated by the department.
(b) Except in the case of a late enrollee or for satisfaction of a
preexisting condition clause in the case of initial coverage for an
eligible employee, the local initiative may not exclude any eligible
employee who would otherwise be eligible for health care coverage
under this division on the basis of an actual or expected health care
condition. The local initiative may not limit or exclude coverage
for any eligible employee by type of illness, treatment, medical
condition, or accident, except for preexisting conditions as
permitted under Section 1357.06.
(c) Coverage provided through the program to an eligible small
business shall be renewable with respect to all eligible employees at
the option of the participating small business. The
provisions of Article 4.5 (commencing with Section 1366.20) of
Chapter 2.2 of Division 2 shall not apply to the program.
CHAPTER 3. ELIGIBILITY
131520. Notwithstanding subdivision (b) of Section 1357, only an
adult age 19 to 64 years, inclusive, employed by a small business for
a minimum of 20 hours per week is eligible to participate in the
program if he or she has a gross annual income that is less than 350
percent of the federal poverty level for a family size of one, and
his or her employer participates in the program. Dependents, spouses,
and domestic partners of employees are not eligible for the program.
131521. (a) A small business may apply to the local initiative
that administers the program to obtain coverage for its employees who
meet the requirements of Section 131520.
(b) At least 50 percent of the employees of an otherwise eligible
small business must meet the eligibility requirements of Section
131520, and at least 50 percent of those eligible employees must
choose to receive coverage through the program in order for the small
business to qualify to participate in the program.
131522. The program shall screen potential enrollees to determine
if they meet the eligibility requirements for the Medi-Cal program.
CHAPTER 4. BENEFITS
131530. The local initiative that establishes a program shall
offer health care coverage through the program, and all health care
services shall be provided to participants by a provider operated by
the county or by a provider with whom or with which the county or the
local initiative has contracted to provide health care services,
except for emergency or out-of-area care or instances in which a
required specialized service is not contracted for by the county or
the local initiative.
131531. The health care services provided through the program to
eligible employees shall, to the extent practicable, be substantially
similar to the benefits offered to adults under the Healthy Families
Program pursuant to Chapter 5 (commencing with Section 12693.60) of
Part 6.2 of the Insurance Code, but shall include at least all of the
basic health care services included in subdivision (b) of Section
1345 and in Section 1300.67 of Title 28 of the California Code of
Regulations.
CHAPTER 5. FUNDING
131540. (a) (1) The cost of the health care coverage provided
through the program shall be paid through a combination of
contributions paid by the small business, premiums paid by
participating employees, and any county, federal, state, or private
sector funding made available for this purpose.
(2) The local initiative may determine the amount of the employer
contribution for each participating eligible employee, which shall
not exceed one hundred fifty dollars ($150) per month, and the amount
of the employee contribution premium ,
which shall not exceed seventy-five dollars ($75) per month. The
local initiative may adjust employer and employee
contribution contribution and employee premium
levels after the first year if necessary for changes in health care
costs.
(3) The local initiative may structure the required employee
contribution premium amounts according
to a schedule that takes into account the individual employee's
income level age or income level, or both,
in a manner similar, but not necessarily identical, to that
described in Section 12693.43 of the Insurance Code, pertaining to
the Healthy Families Program.
(4) The local initiative shall establish copayment levels and
amounts in a manner substantially similar to that described in
Section 12693.615 of the Insurance Code, pertaining to the Healthy
Families Program.
(5) For purposes of the program, the term "applicable rate charged
for a covered employee" in Section 1366.26 shall mean the total
premium amount paid to the health plan on behalf of an employee,
including amounts paid by the small business on behalf of the
employee, the premium paid by the employee, and any county, federal,
state, or private sector funding, which funding shall include the
value of the discounted rates negotiated pursuant to subdivision (b),
as apportioned to the employee. The program shall submit to the
Department of Managed Health Care the procedures the local initiative
will use for purposes of establishing the rates to be paid by a
person eligible for continuation coverage under section 1366. 26 and
the department shall only approve those if it determines that they
are consistent with the requirements of the Cal-COBRA program.
(b) In order to enhance the affordability of coverage offered
through the program to eligible small businesses and employees, the
county and the local initiative shall negotiate discounted rates for
services provided to participants in the program by providers
operated by the county or by providers with whom, or with which, the
county has contracted to provide health care services.
131541. The local initiative shall be authorized to establish,
participate in, or apply to funding sources in the public and private
sectors for purposes of providing or securing premium subsidies for
eligible employees, pursuant to fair and equitable procedures to be
established by the local initiative.
CHAPTER 6. EVALUATION
131550. The county and the local initiative shall together
evaluate the pilot program after three years, including all of the
following: the number of individuals served, the demographics of the
individuals served, the number of employees turned away due to the
limitation on enrollment in Section 131510, the number of small
businesses participating, the number of small businesses turned away
due to the limitation on enrollment of individuals, funding sources
(including employees, employers, county, state, federal, and other
sources), and the health status of enrollees.
SEC. 3. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.