BILL NUMBER: SB 48 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Perata
(Coauthor: Senator Kuehl)
JANUARY 3, 2007
An act to amend Section 12693.70 of, and to add Part 6.45
(commencing with Section 12699.201) to Division 2 of the Insurance
Code, to add Part 8.8 (commencing with Section 2200) to Division 2 of
the Labor Code, to add Section 17054.2 to the Revenue and Taxation
Code, to amend Section 131 of, and to add Section 976.7 to, the
Unemployment Insurance Code, and to add Article 7 (commencing with
Section 14199.10) to Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code, relating to health care coverage, and making
an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 48, as introduced, Perata. Health care coverage: employers and
employees.
Existing law does not provide a system of health care coverage for
all California residents. Existing law does not require employers to
provide health care coverage for employees and dependents, other
than coverage provided as part of the workers' compensation system
for work-related employee injuries, and does not require individuals
to maintain health care coverage. Existing law provides for the
creation of various programs to provide health care coverage to
persons who have limited incomes and meet various eligibility
requirements. These programs include the Healthy Families Program,
administered by the Managed Risk Medical Insurance Board, and the
Medi-Cal program, administered by the State Department of Health Care
Services. Existing law provides for the regulation of health care
service plans by the Department of Managed Health Care and health
insurers by the Department of Insurance.
This bill would create the Health Insurance Connector (Connector),
which would function as a purchasing pool for health care coverage
and be administered by the Managed Risk Medical Insurance Board. The
bill would require employers to provide health care coverage to
employees and dependents resulting in the expenditure of an
unspecified percentage of the employer's payroll or, alternatively,
would allow employers to elect to have that coverage provided through
the Connector upon payment of an employer fee in an equivalent
amount. The bill would require employers electing to pay the fee to
also collect an unspecified employee contribution from each employee.
Revenues from the employer fees and employee contributions would be
collected by the Employment Development Department for deposit in the
Health Insurance Trust Fund created by the bill, and moneys in the
fund would be continuously appropriated to the board for the purposes
of the bill. The bill would require the board to offer eligible
employees a choice of various health plans through the Connector, and
would require the board to establish standards to cap administrative
costs and profits of participating health plans and determine
standards for plans to control growing health care costs. The bill
would require individuals who are employed and who are self-employed
to maintain a minimum policy of health care coverage for themselves
and their dependents, as determined by the board.
The bill, subject to future appropriation of funds, would expand
the number of children eligible for coverage under the Healthy
Families Program. The bill would require the State Department of
Health Care Services to seek any necessary federal waiver to enable
the state to receive federal Medicaid funds for specified persons who
could otherwise be made eligible for Medi-Cal benefits, with the
state share of funds to be provided from the Health Insurance Trust
Fund. The bill would enact other related provisions.
Existing law authorizes a taxpayer under the Personal Income Tax
Law to claim personal exemption credits against income taxes due for
the taxpayer and dependents of the taxpayer.
This bill would provide that a taxpayer under that law may not
claim these exemption credits if the taxpayer fails to comply in a
tax year with the requirement for employed individuals to maintain a
policy of health care coverage. The bill would require the Franchise
Tax Board, based on estimates, to correspondingly increase the
exemption credits for the remaining taxpayers in a manner that the
estimated revenue gain in a tax year from denying the exemption
credits under the bill is equal to the estimated revenue loss in that
tax year from increasing the exemption credits under the bill.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the
California Health Care Coverage and Cost Control Act.
SEC. 2. Section 12693.70 of the Insurance Code is amended to read:
12693.70. To be eligible to participate in the program, an
applicant shall meet all of the following requirements:
(a) Be an applicant applying on behalf of an eligible child, which
means a child who is all of the following:
(1) Less than 19 years of age. An application may be made on
behalf of a child not yet born up to three months prior to the
expected date of delivery. Coverage shall begin as soon as
administratively feasible, as determined by the board, after the
board receives notification of the birth. However, no child less than
12 months of age shall be eligible for coverage until 90 days after
the enactment of the Budget Act of 1999.
(2) Not eligible for no-cost full-scope Medi-Cal or Medicare
coverage at the time of application.
(3) In compliance with Sections 12693.71 and 12693.72.
(4) A child who meets citizenship and immigration status
requirements that are applicable to persons participating in the
program established by Title XXI of the Social Security Act, except
as specified in Section 12693.76.
(5) A resident of the State of California pursuant to Section 244
of the Government Code; or, if not a resident pursuant to Section 244
of the Government Code, is physically present in California and
entered the state with a job commitment or to seek employment,
whether or not employed at the time of application to or after
acceptance in, the program.
(6) (A) In either of the following:
(i) In a family with an annual or monthly household income equal
to or less than 200 percent of the federal poverty level.
(ii) When implemented by the board, subject to subdivision (b) of
Section 12693.765 and pursuant to this section, a child under the age
of two years who was delivered by a mother enrolled in the Access
for Infants and Mothers Program as described in Part 6.3 (commencing
with Section 12695). Commencing July 1, 2007, eligibility under this
subparagraph shall not include infants during any time they are
enrolled in employer-sponsored health insurance or are subject to an
exclusion pursuant to Section 12693.71 or 12693.72, or are enrolled
in the full scope of benefits under the Medi-Cal program at no share
of cost. For purposes of this clause, any infant born to a woman
whose enrollment in the Access for Infants and Mothers Program begins
after June 30, 2004, shall be automatically enrolled in the Healthy
Families Program, except during any time on or after July 1, 2007,
that the infant is enrolled in employer-sponsored health insurance or
is subject to an exclusion pursuant to Section 12693.71 or 12693.72,
or is enrolled in the full scope of benefits under the Medi-Cal
program at no share of cost. Except as otherwise specified in this
section, this enrollment shall cover the first 12 months of the
infant's life. At the end of the 12 months, as a condition of
continued eligibility, the applicant shall provide income
information. The infant shall be disenrolled if the gross annual
household income exceeds the income eligibility standard that was in
effect in the Access for Infants and Mothers Program at the time the
infant's mother became eligible, or following the two-month period
established in Section 12693.981 if the infant is eligible for
Medi-Cal with no share of cost. At the end of the second year,
infants shall again be screened for program eligibility pursuant to
this section, with income eligibility evaluated pursuant to clause
(i), subparagraphs (B) and (C), and paragraph (2) of subdivision (a).
(B) All income over 200 percent of the federal poverty level but
less than or equal to 250 300 percent
of the federal poverty level shall be disregarded in calculating
annual or monthly household income.
(C) In a family with an annual or monthly household income greater
than 250 300 percent of the federal
poverty level, any income deduction that is applicable to a child
under Medi-Cal shall be applied in determining the annual or monthly
household income. If the income deductions reduce the annual or
monthly household income to 250 300
percent or less of the federal poverty level, subparagraph (B) shall
be applied.
(b) The applicant shall agree to remain in the program for six
months, unless other coverage is obtained and proof of the coverage
is provided to the program.
(c) An applicant shall enroll all of the applicant's eligible
children in the program.
(d) In filing documentation to meet program eligibility
requirements, if the applicant's income documentation cannot be
provided, as defined in regulations promulgated by the board, the
applicant's signed statement as to the value or amount of income
shall be deemed to constitute verification.
(e) An applicant shall pay in full any family contributions owed
in arrears for any health, dental, or vision coverage provided by the
program within the prior 12 months.
(f) By January 2008, the board, in consultation with stakeholders,
shall implement processes by which applicants for subscribers may
certify income at the time of annual eligibility review, including
rules concerning which applicants shall be permitted to certify
income and the circumstances in which supplemental information or
documentation may be required. The board may terminate using these
processes not sooner than 90 days after providing notification to the
Chair of the Joint Legislative Budget Committee. This notification
shall articulate the specific reasons for the termination and shall
include all relevant data elements that are applicable to document
the reasons for the termination. Upon the request of the Chair of the
Joint Legislative Budget Committee, the board shall promptly provide
any additional clarifying information regarding implementation of
the processes required by this subdivision.
(g) Notwithstanding any other provision of law, the changes to
subparagraphs (B) and (C) of paragraph (6) of subdivision (a) made by
the act adding this subdivision in the 2007-08 Regular Session of
the Legislature may only be implemented to the extent funds are
appropriated for those purposes in another statute.
SEC. 3. Part 6.45 (commencing with Section 12699.201) is added to
Division 2 of the Insurance Code, to read:
PART 6.45. THE HEALTH INSURANCE CONNECTOR
12699.201. For the purposes of this part, the following terms
have the following meanings:
(a) "Board" means the Managed Risk Medical Insurance Board.
(b) "Health Insurance Connector" or "Connector" means the health
care coverage purchasing pool for employers and self-employed
individuals electing to purchase health care coverage for themselves
and for their employees and dependents instead of arranging to
provide that coverage directly as provided in Part 8.8 (commencing
with Section 2200) of Division 2 of the Labor Code.
12699.202. The board shall be responsible for establishing the
Connector and administering this part.
12699.203. (a) The board shall develop standards for high quality
coverage for the Connector and negotiate favorable rates and
contract with health plans by leveraging its purchasing power.
Employees of participating employers shall be offered a choice of
health plans that provide comprehensive health care coverage,
including medical, hospital, and prescription drug benefits.
(b) The board shall offer three tiers of health plans to eligible
employees. Plans offered in the first tier may require appropriate
enrollee copayments, consistent with utilization management
practices. Plans in the higher-level tiers would provide a higher
level of benefits or greater choices with additional costs borne by
the enrollee.
(c) The board shall directly mail to each eligible employee an
information packet containing information about health plan choices
in the three tiers. Each participating employer shall provide the
board with employee contact information necessary to prepare the
mailing.
12699.204. The board shall establish standards to cap
administrative costs and profits of participating health plans. The
board shall also determine standards to ensure that plans utilize
evidence-based practices and implement efficiencies to control
growing health care costs. These practices shall include, but need
not be limited to, the following:
(a) Preventive care.
(b) Care management for chronic diseases.
(c) Promotion of health information technology.
(d) Standardized billing practices.
(e) Reduction of medical errors.
(f) Incentives for healthy lifestyles.
(g) Appropriate patient cost sharing.
(h) Rational use of new technology.
12699.205. Participating health plans shall provide guaranteed
issue and renewal for all eligible enrollees to be covered by the
Connector who otherwise satisfy conditions of participation.
12699.206. The board shall negotiate with Medi-Cal managed care
plans to obtain affordable, first-tier coverage for eligible
employees.
12699.207. The Health Insurance Trust Fund is hereby created in
the State Treasury. The moneys in the fund shall be continuously
appropriated to the board for the purposes of providing health care
coverage pursuant to this part.
12699.208. The board, subject to approval of a federal waiver
pursuant to Section 14199.10 of the Welfare and Institutions Code,
shall pay the nonfederal share of cost from the Health Insurance
Trust Fund for employees and dependents eligible under the waiver.
12699.209. It is the intent of the Legislature that the Connector
should pay from the Health Insurance Trust Fund the nonfederal share
of funds necessary to match federal funds made available for
individuals made eligible for the Healthy Families Program pursuant
to the amendment of Section 12693.70 by the act enacting this
section. The board shall adopt regulations in that regard to
facilitate the enrollment of those eligible individuals in the
Healthy Families Program in a manner that maximizes federal funds
available to the state and efficiently provides for coordination of
coverage.
SEC. 4. Part 8.8 (commencing with Section 2200) is added to
Division 2 of the Labor Code, to read:
PART 8.8. EMPLOYEE HEALTH CARE COVERAGE
2200. Each employer shall elect either to provide for its
employees and dependents health care coverage that results in the
expenditure by the employer of ____ percent of social security wages
paid by the employer, or to pay an equivalent amount to the Health
Insurance Trust Fund created pursuant to Section 12699.207 of the
Insurance Code as required by Section 976.7 of the Unemployment
Insurance Code. The Managed Risk Medical Insurance Board may
establish a sliding percentage scale for purposes of this section if
it so deems necessary.
2201. Each employer electing to pay into the Health Insurance
Trust Fund pursuant to Section 2200 shall also collect an employee
contribution, in an amount equal to ____ percent of the employee's
social security wages, from each employee for health care coverage to
be provided to the employee and his or her dependents. The employee
contributions shall be transmitted as required by Section 976.6 of
the Unemployment Insurance Code.
2203. Every person employed or self-employed in this state shall
be required to maintain a minimum policy of health care coverage for
the person and his or her dependents, as determined by the Managed
Risk Medical Insurance Board.
SEC. 5. Section 17054.2 is added to the Revenue and Taxation Code,
to read:
17054.2. (a) Notwithstanding Section 17054 or any other provision
of law, a taxpayer who fails to comply with Section 2203 of the
Labor Code shall not be allowed an adjusted personal exemption credit
pursuant to subdivision (a) or (d) of Section 17054 for the taxpayer
or the dependents of the taxpayer for any tax year in which the
taxpayer is not in compliance, and in the case of a husband and wife
making a joint return, the adjusted personal exemption credit
pursuant to subdivision (b) of Section 17054 shall be reduced by
one-half in the case where one spouse is in compliance and the other
spouse is not in compliance.
(b) The Franchise Tax Board shall annually estimate the revenue
gain from subdivision (a) for each tax year. Based on this estimate,
notwithstanding Section 17054 or any other provision of law, the
Franchise Tax Board shall proportionately increase the amounts of the
personal exemption credits for that tax year for all taxpayers that
demonstrate compliance with Section 2203 of the Labor Code, in a
manner that the estimate of revenue lost from that action equals the
estimated revenue gain from subdivision (a).
SEC. 6. Section 131 of the Unemployment Insurance Code is amended
to read:
131. "Contributions" means the money payments to the Unemployment
Fund, Employment Training Fund, Health Insurance Trust Fund,
or Unemployment Compensation Disability Fund which
that are required by this division.
SEC. 7. Section 976.7 is added to the Unemployment Insurance Code,
to read:
976.7. In addition to other contributions required by this
division and consistent with the requirements of Part 8.8 (commencing
with Section 2200) of Division 2 of the Labor Code, an employer
shall pay to the department for deposit into the Health Insurance
Trust Fund the amount required by Sections 2200 and 2201 of the Labor
Code. These contributions shall be collected in the same manner and
at the same time as any contributions required under Sections 976 and
1088.
SEC. 8. Article 7 (commencing with Section 14199.10) is added to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 7. Coordination with the California Health Care
Coverage and Cost Control Act
14199.10. The department shall seek any necessary federal waiver
to enable the state to receive federal funds for coverage provided
through the Connector to persons who would be eligible for Medi-Cal
if the state adopted an additional income disregard as allowed by
Section 1931(b) of the Social Security Act (42 U.S.C. Sec. 1396u-1)
sufficient to make persons with income up to 300 percent of the
federal poverty level eligible for coverage under that section.
Revenues in the Health Insurance Trust Fund created pursuant to
Section 12699.207 of the Insurance Code shall be used as state
matching funds for receipt of federal funds resulting from the
implementation of this section. All federal funds received pursuant
to that waiver shall be deposited in the Health Insurance Trust Fund.