BILL ANALYSIS                                                                                                                                                                                                    Ó






                 Senate Committee on Labor and Industrial Relations
                                   Ted Lieu, Chair

          Date of Hearing: March 23, 2011              2009-2010 Regular 
          Session                              
          Consultant: Alma Perez                       Fiscal:Yes
                                                       Urgency: No
          
                                   Bill No: SB 299
                                    Author: Evans
                      Version: As introduced February 14, 2011
          

                                       SUBJECT
          
                      Employment: pregnancy or childbirth leave


                                      KEY ISSUE

          Should the Legislature require that employers provide health 
          insurance coverage when an employee is out on Pregnancy 
          Disability Leave? 

          Should a pregnant employee of a small business have the same 
          right to covered health insurance during their pregnancy leave 
          as employees of larger employers do? 
          

                                       PURPOSE
          
          To declare that an employer's refusal to maintain and pay for 
          health coverage during an employee's Pregnancy Disability Leave 
          is an unlawful employment practice. 

                                      ANALYSIS
          
           Existing law  provides employees options for leave for various 
          reasons including pregnancy.  
           
          The existing federal Family and Medical Leave Act (FMLA)  
          requires all employers with 50 or more employees within a 75 
          mile radius of the work site to grant leave to eligible 
          employees.  FMLA entitles eligible employees to take up to 12 
          workweeks of unpaid, job-protected leave in a 12-month period 
          for specified family and medical reasons, including for the 









          birth and care of a newborn child of the employee.  

           Under FMLA  , among other things, a covered employer is required 
          to:
                 Maintain group health insurance coverage for an employee 
               on FMLA leave whenever such insurance was provided before 
               the leave was taken and on the same terms as if the 
               employee had continued to work.  

                 If applicable, make arrangements for employees to pay 
               their share of health insurance premiums while on leave.  
               In some instances, the employer may recover premiums it 
               paid to maintain health coverage for an employee who fails 
               to return to work from FMLA leave. 

           The existing California Family Rights Act (CFRA)  requires all 
          employers with 50 or more employees within a 75 mile radius of 
          the work site to grant leave to eligible employees.  CFRA was 
          established ensure secure unpaid, job-protected, leave rights 
          for the birth of a child for purposes of bonding, placement of a 
          child in the employee's family for adoption or foster care, for 
          the serious health condition of the employee's child, parent or 
          spouse, or for the employee's own serious health condition.  An 
          employer is not required to pay an employee during a CFRA leave, 
          except when an eligible employee elects, or the employer 
          requires, the employee to use any accrued vacation time or other 
          accumulated paid leave other than accrued sick leave.  

           Under CFRA  , among other things, a covered employer is required 
          to: 
                 Continue providing health care coverage for employees 
               during their CFRA leave.  If the employer provides health 
               benefits under any group health plan, the employer has an 
               obligation to continue providing such benefits during an 
               employee's CFRA leave.  

                 Continue providing health care coverage for the duration 
               of the leave(s), up to a maximum of 12 work weeks in a 
               12-month period.    In addition, during the period of CFRA 
               leave, the employee is entitled to participate in employee 
               benefit plans, including pension and retirement plans to 
               the same extent and under the same conditions as would 
          Hearing Date:  March 23, 2011                            SB 299  
          Consultant: Alma Perez                                   Page 2

          Senate Committee on Labor and Industrial Relations 
          








               apply to any other leave granted by the employer for any 
               reason other than CFRA leave.  
           
          The existing Pregnancy Disability Leave (PDL),  under the Fair 
          Employment and Housing Act, requires all employers with five or 
          more employees to provide job-protected leave for pregnancy 
          disability for a period of up to four months, as needed, for the 
          period(s) of time a woman is actually disabled by pregnancy.  
          There is no length of service requirement before an employee 
          disabled by pregnancy is entitled to a pregnancy disability 
          leave.  An employer is not required to pay an employee during a 
          pregnancy disability leave, except in certain specified 
          instances. 

          During any part of the pregnancy disability leave, if it runs 
          concurrently with FMLA leave and if the employer provides health 
          benefits under any "group health plan," the employer may have an 
          FMLA obligation to continue providing such benefits.  However, 
          for employers with 50 or fewer employees, FMLA does not cover 
          its employees and only PDL is applied.  Under existing law, PDL 
          does not require employers to continue providing group health 
          coverage during the employees pregnancy disability leave. 
           

          This Bill  would make it an unlawful practice for an employer to 
          refuse to maintain and pay for coverage under a group health 
          plan for an employee who takes Pregnancy Disability Leave, as 
          specified.  Specifically, this bill would:

                 Prohibit an employer from refusing to maintain and pay 
               for health care coverage, not to exceed four months over 
               the course of a 12-mont period, at the level and under the 
               conditions that coverage would have been provided if the 
               employee had continued in employment continuously for the 
               duration of the leave.  

                 Allow an employer to recover from the employee the 
               premium that the employer paid for maintaining coverage for 
               the employee under the group health plan if both of the 
               following conditions occur:

                  o         The employee fails to return to work after the 
          Hearing Date:  March 23, 2011                            SB 299  
          Consultant: Alma Perez                                   Page 3

          Senate Committee on Labor and Industrial Relations 
          








                    period of leave has expired. 
                  o         The employee's failure to return to work is 
                    for a reason other than one of the following:
                       §              The employee taking leave under the 
                         Moore-Brown-Roberti Family Rights Act (also known 
                         as CFRA). 
                       §              The continuation, recurrence, or 
                         onset of a health condition that entitles the 
                         employee to leave under PDL or other circumstance 
                         beyond the control of the employee.  



                                      COMMENTS

          
          1.  Need for this bill?

            Current law provides employees with options for paid and 
            unpaid leave through programs such as the PDL, FMLA, and CFRA. 
             In general, FMLA and CFRA contain similar provisions and run 
            concurrently for all purposes other than disabilities due to 
            pregnancy or pregnancy-related conditions.  A California 
            employee who is disabled due to pregnancy or a condition 
            related to pregnancy is entitled to disability leave under 
            PDL. After the baby is born, she is entitled to additional 
            leave under CFRA for baby bonding.  

            Under existing law, both FMLA and CFRA requires employers to 
            continue health care coverage for employees while they are on 
            leave, however, both have strict eligibility requirements and 
            CFRA is only available for bonding once the child is born. 
            Although FMLA and PDL can run concurrently, thus requiring the 
            employer to cover an employee's health coverage during leave, 
            the problem is that both FMLA and CFRA only cover women 
            working for an employer with 50 or more employees.  For 
            employers with 50 or fewer employees, PDL is the only leave 
            required for employees disabled by pregnancy or 
            pregnancy-related conditions and employers are not required to 
            continue health insurance coverage during the disability 
            leave.  Leave under FMLA does not apply.  

          Hearing Date:  March 23, 2011                            SB 299  
          Consultant: Alma Perez                                   Page 4

          Senate Committee on Labor and Industrial Relations 
          








            This bill would extend the right to health insurance coverage 
            for eligible female employees on Pregnancy Disability Leave by 
            requiring that employers of 50 or fewer employees maintain and 
            pay for health coverage during their leave. 

          2.  Proponent Arguments  :

            According to the author, while the PDL provides leave for 
            pregnancy-related conditions, the law does not require 
            employers to continue group health insurance coverage for an 
            employee during leave.  Proponents argue that this lack of 
            maternity coverage assurance discourages and prevents women 
            from taking pregnancy leave despite their health needs and the 
            needs of their baby.  In addition, the author argues that 
            forced to pay out-of-pocket costs for health coverage, many 
            women will delay or cut short their leave despite 
            well-documented benefits to maternal and child health.  
            According to the author, almost four-fifths of workers report 
            being unable to take leave because they could not afford it.  

            Proponents argue that although, other federal and state leave 
            laws require employers to continue health care for employees 
            on leave, the FMLA has strict eligibility requirements and 
            only 47% of the workforce is included and CFRA excludes leave 
            for pregnancy-related conditions.  Proponents argue that due 
            to these gaps in coverage, an estimated 50% of the workforce 
            is not afforded the continued health insurance coverage 
            guaranteed by the FMLA and CFRA.  According to proponents, the 
            current gap in the law puts the health and well-being of women 
            and their infants at risk.  The author argues that this 
            inequitable coverage under the law effectively penalizes women 
            for taking maternity leave. 

            Proponents argue that health care benefits for women who are 
            pregnant or have just given birth should not be terminated at 
            a time when they're needed most.  The author believes that 
            meaningful access to leave - including the maintenance of 
            health insurance coverage - is essential to protecting the 
            health and economic security of working women and their 
            families.  This bill seeks to close the gap in health 
            insurance for women on maternity leave by bringing PDL in line 
            with health coverage provisions of related state and federal 
          Hearing Date:  March 23, 2011                            SB 299  
          Consultant: Alma Perez                                   Page 5

          Senate Committee on Labor and Industrial Relations 
          








            family and medical leave laws.  

          3.  Opponent Arguments  :

            None received. 


                                       SUPPORT
          
          9 to 5 California, National Association of Working Women 
          American Civil Liberties Union 
          California Commission on the Status of Women (Sponsor)
          California Employment Lawyers Association 
          California Labor Federation, ALF-CIO 
          California National Organization for Women 
          California Nurse Midwives Association 
          California Nurses Association 
          California Women's Law Center 
          Service Employees International Union 
          St. John's Well Child & Family Center 
          United Steelworkers, Local 675 
          Women's Employment Rights Clinic of Golden Gate University 
          

                                     OPPOSITION
          
          None received














          Hearing Date:  March 23, 2011                            SB 299  
          Consultant: Alma Perez                                   Page 6

          Senate Committee on Labor and Industrial Relations