BILL ANALYSIS Ó
SENATE INSURANCE COMMITTEE
Senator Ronald Calderon, Chair
SB 220 (Price) Hearing Date: April 27, 2011
As Introduced: February 9, 2011
Fiscal: No
Urgency: No
SUMMARY Would authorize dependent children to be eligible for
coverage under group life insurance policies up to age 26.
DIGEST
Existing law
1. Employee group life insurance is an authorized form of
group life insurance and must conform to certain statutory
conditions. (See California Insurance Code (CIC) Section
10202.) While the amount of insurance issued must be based
upon some plan that will preclude individual selection (
CIC 10203.4(a)) the plan participants can elect to extend
the coverage to insure the dependents of any insured
employee who so elects (CIC Sec. 10204(a)).
2. For purposes of this election, current law limits the
age of eligible dependents to all unmarried children from
"birth through 20 years of age" or "through 24 years of
age" if the dependent child is attending an educational
institution.
This bill
This bill, with respect to eligibility for group life
insurance under California law, will increase the dependent
child eligibility age to "until 26 years of age" so group
life insurance can be offered on terms which are comparable
to those made for dependent children under the federal
Patient Protection and Affordable Care Act (PPACA) of 2010.
COMMENTS
1. Purpose of the bill According to the Author, SB 220 conforms
SB 220 (Price), Page 2
the age for dependent coverage eligibility from 20 or 24 for
college students to 26 and maintains protections for older
dependents with intellectual or developmental disabilities.
This bill will expand access to life insurance coverage,
provide young people with support they currently are
unlikely to have and parents with the assurance that in the
event of catastrophe, some of their expenses can be paid
down by effective life insurance .
Finally, the author states SB 220 (Price) will also provide
group insurance companies that currently allow for dependent
coverage the opportunity to effectively inform consumers of
their products.
2. Background and Discussion:
a. Under the Federal health care reform
legislation signed into law last year, and also under
California law, dependent children up to age 26 can
remain on their parent's policy. SB 220 conforms the
eligibility rules for sales of group life insurance
under California law to the new age standard.
3. Summary of Arguments in Support:
a. The author indicates group life insurance
policy holders, agents and companies believe that the
increased age requirement with health care insurance
deserves parity.
b. The Association of California Life and Health
Insurance Companies (ACLHIC) is in support, stating
"Many ACLHIC member companies offering group life
insurance coverage continue to receive requests from
current and prospective group policyholders wanting to
expand the offer of group life insurance to employees'
dependents in line with the changes established under
the federal Patient Protection and Affordable Care Act
(PPACA) of 2010. PPACA considers a dependent child to
be from birth to age 26 whether or not living with the
parent, financially dependent on the parent, and
regardless of marital status."
c. ACLHIC also states "SB 220 expands the
definition of "dependent" for group life eligibility
SB 220 (Price), Page 3
to more closely mirror the definition in PPACA and
allow for coverage up to age 26. While the offer of
dependent coverage is required under health insurance
law, it is optional under group life insurance law.
This bill would allow insurers to offer this expanded
coverage benefit to employers at a time when many
California businesses are reducing benefits."
4. Summary of Arguments in Opposition:
a. None received.
5. Amendments:
a. None Proposed
6. Prior and Related Legislation:
a. SB 1088 (Price) Chapter 660, Statutes of 2010,
which prohibited, with specified exceptions, the
limiting age for dependents covered by health plan
contracts and health insurance policies from being
less than 26 years of age beginning on or after
September 23, 2010, and prohibits health plan
contracts and health insurance policies from being
required to cover a child of a child receiving
dependent coverage.
b. SB 122 (Price) of 2011, which proposes to
clarify SB 1088 (Price) of last year with respect to
the complying with Federal Health Reform and leaving
further expanded coverage, in the near term to others.
LIST OF REGISTERED SUPPORT/OPPOSITION
Support
Association of California Life and health Insurance Companies
(ACLHIC)
California Association of health Underwriters (CAHU)
National Association of Insurance and Financial Advisors (NAIFA)
Opposition
SB 220 (Price), Page 4
None
Consultant: Ken Cooley (916) 651-4110