BILL ANALYSIS �
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