BILL ANALYSIS AB 2188 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2188 (Bradford and Niello) As Amended August 20, 2010 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: |55-17|(June 2, 2010) |SENATE: |35-0 |(August 24, | | | | | | |2010) | ----------------------------------------------------------------- Original Committee Reference: INS. SUMMARY : Removes the requirement that the Employment Development Department (EDD) pay state disability insurance (SDI) benefits by checks drawn on a bank or public depository, and clarifies the conditions in which a nurse practitioner may certify eligibility for SDI benefits. The Senate amendments : 1)Remove the Assembly provisions of the bill that would have established criteria for any contract between the Employment Development Department (EDD) and a vendor for the electronic payment of state disability insurance (SDI) benefits. 2)Define "practitioner" in the Unemployment Insurance Code the same as an existing provision of the Business and Professions Code to clarify that a person who is duly licensed or certified in California as a nurse practitioner may certify the disability of an applicant for SDI, after performing a physical examination and collaborating with a physician and surgeon,. EXISTING LAW : 1)Requires claims for SDI benefits to be made in accordance with regulations adopted by the Director of EDD, and when the claimant establishes medical eligibility for a period of disability that is supported by a certificate of a treating physician or "practitioner." 2)Defines a "practitioner" as a person duly licensed or certified in California who is a dentist, podiatrist, or as to normal pregnancy or childbirth, a midwife, nurse midwife, or AB 2188 Page 2 nurse practitioner. 3)Requires the payment of SDI benefits to be paid by checks drawn on a disability benefit payment account from a bank or public despository selected by the director of EDD, with the approval of the Department of Finance. AS PASSED BY THE ASSEMBLY , this bill: 1)Required that any contract between the EDD and a vendor for the electronic payment of SDI benefits shall include the following criteria: a) Provide claimants with a process to resolve disputes in a timely manner; b) Require that claimants have free and unlimited access to customer service that meets or exceeds the services provided by EDD prior to the implementation of electronic payment of benefits; c) Prohibit the assessment of fees to claimants to access the electronic payment of benefits in connection with a transaction with a teller at a financial institution, a point of sale transaction where an electronic benefit card is utilized to purchase goods or services, and a transaction at any automatic teller machine in the vendor's financial network; d) Allow for inquiries on account balances from automatic teller machines; e) Charge no fees wherever the vendor can exercise that option; f) Require the vendor to meet or exceed federal and state laws for financial privacy and language access; g) Meet the standards for use of personal service contracts required by existing state law; h) Create a procedure to prevent overdraft fees; and i) Prohibit the deduction of any fees, charges, or debt AB 2188 Page 3 from future SDI benefits. 2)Eliminated the requirement that SDI benefits be paid by check. FISCAL EFFECT : Minor absorbable cost to EDD to revise internal documents to reflect the revised authority of nurse practitioners in determining disability for purposes of SDI. Cost savings (undetermined dollar amount) expected from authorizing EDD to pay SDI benefits by electronic means. COMMENTS : 1)This bill will authorize EDD to pay SDI benefits by electronic means, such as by direct deposit or the issuance of pay cards, and modify the instances when a nurse practitioner may certify that a claimant for SDI benefits is eligible for benefits. 2)Electronic pay cards can benefit "unbanked" individuals who do not have access to a bank account and resort to payday lenders and check cashers that charge exorbitant fees. 3)An existing provision of the Business and Professions Code (Section 2835.7) authorizes a person who is a duly licensed or certified in California as a nurse practitioner to certify the disability of an applicant for SDI after a physical examination and collaboration with a physician and surgeon (SB 819 (Yee), Chapter 308, Statutes of 2009). AB 2188 makes the conforming change to the Unemployment Insurance Code (Section 2708) which provides direction to EDD, the agency responsible for administering the SDI Program. Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086 FN: 0006590