BILL ANALYSIS Ó AB 460 Page 1 Date of Hearing: May 8, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 460 (Ammiano) - As Introduced: February 19, 2013 Policy Committee: HealthVote:13-6 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill requires coverage for infertility treatment, which under current law must be offered to all purchasers of group health coverage, to be offered and provided without discrimination on the basis of age, ancestry, color, disability, domestic partner status, gender, gender expression, gender identity, genetic information, marital status, national origin, race, religion, sex, or sexual orientation. FISCAL EFFECT Negligible costs because this bill clarifes existing law and does not create a coverage benefit that did not previously exist. The California Health Benefits Review Program (CHBRP) was unable to estimate the marginal cost impact, if any. CHBRP did note this bill does not change the current infertility treatment mandate to offer, meaning the state would not be subject to defray costs of a new benefit not included as an essential health benefit under the federal Affordable Care Act. COMMENTS 1)Rationale . This bill seeks to address concerns about health plans and insurers not complying with current state law that prohibits patients from being treated differently based on sex, marital status, and sexual orientation, and current law that requires registered domestic partners to be treated as spouses in regard to fertility treatments. The author states the goal of this bill is to clarify the application of current law as it pertains to same-sex married couples and domestic partners and the non-compliant practices currently used by insurance providers in infertility treatments. AB 460 Page 2 2)What is infertility ? Infertility is explained by the author as the state of being unable to produce offspring. State law defines infertility as: a) the presence of a demonstrated condition recognized by a licensed physician or surgeon as a cause of infertility, or, b) the inability to conceive a pregnancy or to carry a pregnancy to a live birth after a year or more of regular sexual relations without contraception. Under the current definition of infertility heterosexual married couples are typically treated as a unit for infertility. If a husband has a low or no sperm count, both the husband and wife are diagnosed with primary male factor infertility because the spouse does not produce the gamete needed for conception. Assisted reproductive technology is used to attain a pregnancy where the wife is ultimately a patient regardless of her female fertility status. If the couple's health insurance has infertility coverage, they are able to access it under the current definition of infertility. The author provides an example of how current nondiscrimination laws are violated: an individual or a couple is unable to conceive, attempt to access their infertility coverage, and are denied, based on not having an opposite sex married partner with whom to have one year of regular sexual relations without conception. The author states many insurers currently cover all their insureds with infertility coverage in their plan, and notes this bill does not affect insurers who are in compliance with existing nondiscrimination laws. 3)DMHC and CDI letters . On April 9, 2013, the Department of Managed Healthcare (DMHC) wrote health plans to remind them of their obligations under the Insurance Gender Nondiscrimination Act (IGNA), which prohibits health plans from discriminating against an individual's gender, including gender identity or gender expression. This prohibition extends to the availability of health coverage and the provision of benefits. IGNA prohibits health plans from denying coverage or limiting benefits on the basis of sex, which is defined to include gender, gender identity, and gender expression. IGNA requires AB 460 Page 3 health plans to provide transgender individuals with the same coverage benefits available to non-transgender individuals. IGNA does not prohibit health plans from applying nondiscrimination exclusions or limitations, conducting medical necessity determinations, or applying appropriate utilization management criteria on a case-by-case basis with respect to specific requests for transgender services. If a plan denies services on the basis of medical necessity or utilization management criteria, the decision is subject to review through the Independent Medical Review (IMR) process. In 2007, the Department of Insurance (CDI) issued a letter regarding the state law prohibition against insurer discrimination on the basis of sex in creation or maintenance of service contracts or the provision of benefits or coverage. Gender means sex, and includes a person's gender identity and gender related appearance and behavior whether or not stereotypically associated with the person's assigned sex at birth. State law includes a legal obligation for insurance companies and health plans to refrain from discriminating against women, men, and transgender individuals in the creation and maintenance of contracts and the provision of services and benefits. 4)IMR . The current California IMR process requires an enrollee or insured to attempt to resolve the dispute through an internal process before seeking the external IMR. A California HealthCare Foundation report on IMR noted more than half of all case involve orthopedics, neurology, mental health, or cancer. According to CHBRP, both DMHC-regulated plans and CDI-regulated policies are subject to the IMR process for covered benefits. CHBRP examined IMR complaints from 2011 through March 2013 and found that there were only three complaints, all at DMHC, related to infertility. Of these three complaints, none involved a complaint related to discrimination. 5)Clarification on discrimination is needed . Equality California (EQCA) and the National Center for Lesbian Rights (NCLR) support the clarifications in this bill. NCLR operates a helpline that provides resources and legal information and has received a significant number of calls from people unable to obtain coverage for needed fertility treatment because of their plan's overly restrictive definition of infertility, even in situations where there is independent proof of an AB 460 Page 4 infertility condition. 6)Drafting concerns . The California Association of Health Plans (CAHP) raises concerns over whether the language in this bill would result in unintended consequences. CAHP is concerned that by placing very standard anti-discrimination language into statute for a particular treatment, with no other clarifying parameters this bill would suggest plans must pay for services that may not be safe or advisable from a clinical perspective. As an example, the inclusion of "age" in the language might suggest a plan would be obligated to pay for infertility services for an individual that is not age appropriate for the treatment. Such misinterpretations of the law could invite litigation or unneeded regulatory proceedings to clarify the intent of the statute. 7)Religious freedom . The Capitol Resource Institute writes in opposition that this bill would violate the right to freedom of religion, conscience, and thought of many medical professionals and employers. 8)Previous legislation . SB 757 (Lieu), Chapter 722, Statutes of 2011, requires group health coverage to comply with existing law providing for equal coverage of registered domestic partners. AB 1586 (Koretz), Chapter 421, Statutes of 2005, defines the term "sex" to include, but not be limited to, a person's gender, as specified, under existing law that prohibits health plans and insurers from specified discriminatory acts. Analysis Prepared by : Debra Roth / APPR. / (916) 319-2081