BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 710
                                                                  Page  1

          Date of Hearing:   May 15, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     AB 710 (Pan) - As Amended:  March 11, 2013 

          Policy Committee:                              HealthVote:14-3

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill adds multiemployer plans to the entities permitted to  
          facilitate purchase of qualified health plans (QHPs) in the  
          California Health Benefit Exchange (Exchange), now called  
          Covered California, no later than July 1, 2014, to the extent  
          permitted by federal law.
           
           FISCAL EFFECT  

          Unknown costs but likely to exceed $150,000 because of numerous  
          uncertainties, including changes needed by the Exchange to  
          accommodate the different structure of a multiemployer plan and  
          potential impacts on the risk mix in the Exchange.

           COMMENTS  

           1)Rationale  .  This bill is sponsored by the California State  
            Association of Electrical Workers and the California State  
            Pipe Trades Council, to allow multiemployer plans to purchase  
            policies from Covered California as would qualifying  
            businesses (generally those under 50 employees), and allow  
            multiemployer plans to facilitate purchases by individual plan  
            participants, using plan assets (acting as both a "navigator"  
            and "payor").  Current law does not specifically authorize  
            multiemployer plans to participate in the California Exchange,  
            resulting in the plan participants being denied access to  
            Covered California through their current health plans.  

           2)Background  . The multiemployer plans intended to be covered by  
            this bill are considered group plans, but they are not  
            operated by or paid for solely by an employer.  Known as  
            Taft-Harley plans, based on the federal law under which they  








                                                                  AB 710
                                                                  Page  2

            are regulated, these plans are typically operated by a board  
            of trustees made up of both employer and labor  
            representatives.  At least one union is involved, although  
            there are likely to be multiple employers.  Some of the  
            individual employers may be very small.  

           3)Concerns  .  Individually and as small groups (those with fewer  
            than 50 employees), the members of a Taft-Hartley plan could  
            access Covered California. This may raise questions about the  
            impact on Taft-Hartley plans and their members if some of  
            their groups withdraw to purchase other coverage, and the  
            impact of this bill on Covered California because this bill  
            applies only to coverage in the Exchange as opposed to  
            coverage in the outside market.

           Analysis Prepared by  :    Debra Roth / APPR. / (916) 319-2081