BILL ANALYSIS Ó
AB 784
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Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 784 (Weber) - As Amended: April 10, 2013
SUBJECT : In-Home Supportive Services: provider health care
benefits.
SUMMARY : Establishes a 13-member advisory committee to assess
the impact of the federal Patient Protection and Affordable Care
Act (ACA) on health care benefits for in-home supportive
services (IHSS) providers and provide a report to the
Legislature by March 1, 2014. Specifically, this bill :
1)Establishes a 13-member advisory committee to evaluate and
assess the impact of the ACA on health care benefits for IHSS
providers.
2)Requires the Governor, the Speaker of the Assembly, and the
Senate Committee on Rules to consult with labor organizations
that advocate for seniors and persons with disabilities (SPDs)
regarding appointing designated representatives of IHSS
providers from labor organizations.
3)Requires the Governor to appoint seven members to the
committee, the Speaker of the Assembly to appoint three
members, and the Senate Committee on Rules to appoint three
members.
4)Requires that at least seven members of the committee be
individuals who are current or past providers of personal
assistance services paid for through IHSS.
5)Requires that at least two members of the committee be current
or former providers of IHSS.
6)Allows individuals who represent an organization that
advocates for SPDs to be appointed to the committee.
7)Requires the advisory committee to provide a report to the
Assembly Committee on Human Services, the Senate Committee on
Human Services, the Assembly Committee on Health, and the
Senate Committee on Health on or before March 1, 2014, on the
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appropriate employer under the IHSS program to provide health
care benefits to IHSS provides under ACA.
EXISTING LAW
1)Establishes the IHSS program, administered by the Department
of Social Services (DSS), to help pay for services to help
qualified individuals remain safely at home.
2)Authorizes a county Board of Supervisors to, at its option,
elect to contract with a nonprofit consortium to provide for
the delivery of IHSS or establish, by ordinance, a public
authority to provide for the delivery of IHSS.
3)Provides that a public authority is deemed to be the employer
of IHSS personnel referred to recipients and requires
recipients to retain the right to hire, fire, and supervise
the work of any IHSS personnel providing services to them.
4)Requires, if the state or a county makes or provides for
direct payment to a provider chosen by a recipient or to the
recipient for the purchase of IHSS, the DSS to perform or
assure the performance of all rights, duties, and obligations
of the recipient relating to those services, as required for
purposes of unemployment compensation, disability benefits,
workers' compensation, federal and state income tax, and
federal old-age survivors and disability insurance benefits,
including but not limited to, registration and obtaining
employer account numbers, providing information, notices, and
reports, making applications and returns, and withholding in
trust from the payments made to or on behalf of a recipient
amounts to be withheld from the wages of the provider by the
recipient as an employer, including the sales tax extended to
support services and transmitting those amounts along with
amounts required for all contributions, premiums, and taxes
payable by the recipient as the employer to the appropriate
person, state, or federal agency.
5)Establishes the Medicaid program (Medi-Cal in California) as a
joint federal-state program to provide health care services to
low-income families with children and SPDs.
6)Establishes Medicare as a federal health insurance program to
provide coverage to eligible individuals who are disabled or
over age 65.
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7)Establishes, in the federal ACA, the federal Centers on
Medicare and Medicaid Services (CMS), the Federal Coordinated
Health Care Office (Medicare-Medicaid Coordinated Office), and
the Center for Medicare and Medicaid Innovation (CCI) to test
innovative payment and delivery models to lower costs and
improve quality for enrollees who are dually eligible for
Medi-Cal and Medicare (dual eligibles).
8)Establishes CCI that requires the California Department of
Health Care Services (DHCS) to seek federal approval to
establish demonstration sites in up to eight counties to
provide coordinated Medi-Cal and Medicare benefits to dual
eligibles and authorizes DHCS to require SPDs who are eligible
for Medi-Cal only (not Medicare) to mandatorily enroll in
Medi-Cal managed care plans (MCPs). Requires consultation
with stakeholders in implementing these provisions.
9)Requires county agencies to conduct IHSS assessments and
authorization processes and provides for the development and
utilizations of a universal assessment tool no sooner than
January 1, 2015, as specified.
FISCAL EFFECT : This bill has not been analyzed yet by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the ACA was
signed by President Barack Obama on March 23, 2010 and was
upheld by the United States Supreme Court on June 28, 2012.
The author states that under the ACA, employers are required
to provide their employees with health care coverage or pay a
penalty. In IHSS, there are three employers for various
purposes: the state, the Public Authority, and the recipient.
The Public Authority was created for and currently serves as
the employer of record for purposes of wages and health
benefits. The author asserts that the question of who is the
employer in IHSS for purposes of providing health care to IHSS
providers under the ACA has not been resolved. The purpose of
this bill is to have an advisory committee explore this
question and determine the appropriate employer in IHSS for
purposes of providing health care.
2)IHSS . Qualified individuals are typically over 65 years of
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age, disabled, or blind, or are disabled children. IHSS is an
alternative to out-of-home care, such as nursing homes or
board and care facilities. The types of services which can be
authorized through IHSS are housecleaning, meal preparation,
laundry, grocery shopping, personal care services (such as
bowel and bladder care, bathing, grooming, and paramedical
services), accompaniment to medical appointments, and
protective supervision for the mentally impaired. According
to the agenda of the Assembly Budget Committee hearing on the
Governor's budget on April 10, 2013, county social workers
determine IHSS eligibility and perform case management after
conducting standardized in-home assessment of an individual's
ability to perform activities of daily living. Based on
authorized hours and services, IHSS recipients are responsible
for hiring, firing, and directing their IHSS providers. In
the vast majority of cases recipients choose a relative to
provide care. In 2012 there were approximately 380,000 IHSS
providers. Recent budget reductions and litigation, including
a recent settlement agreement, may have implications on the
number of service hours for IHSS recipients.
3)ACA . On March 23, 2010, the federal ACA (Public Law
111-148), as amended by the Health Care and Education
Reconciliation Act of 2010 (Public Law 111-152) became law.
Among many other provisions, the new law includes new
responsibilities on individuals and employers as it related to
health care coverage. Beginning in 2014, individuals will be
required to maintain health insurance or pay a penalty, with
exceptions for financial hardship (if health insurance
premiums exceed 8% of household adjusted gross income),
religion, incarceration, and immigration status.
Additionally, by 2014 either a state will establish separate
exchanges to offer individual and small-group coverage or the
federal government will establish one. Exchanges will not be
insurers but will provide eligible individuals and small
businesses with access to private plans in a comparable way.
In 2014 some individuals with income below 400% of the federal
poverty level (FPL) will qualify for tax credits toward their
premium costs and subsidies toward their cost-sharing for
insurance purchased through an exchange. California has
established Covered California, as a state-based exchange that
is operating as an independent government entity with a
five-member Board of Directors.
Large businesses (those with 50 or more full-time workers) that
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do not provide adequate health insurance will be required to
pay an assessment if their employees receive premium tax
credits in the exchange to buy their own insurance. These
assessments will offset part of the cost of these tax credits.
The assessment for a large employer that does not offer
coverage will be $2,000 per full-time employee beyond the
company's first 30 workers. An employer is subject to the
assessment if the employer does not offer its full-time
employees (and their dependents) the opportunity to enroll in
minimum essential coverage under an eligible
employer-sponsored plan; or the employer offers its full-time
employees (and their dependents) the opportunity to enroll in
minimum essential coverage under an eligible
employer-sponsored plan that either is unaffordable relative
to an employee's household income or does not provide minimum
value. A full-time employee is an employee who is employed on
average at least 30 hours per week.
Small businesses with generally fewer than 100 employees can
shop in an exchange for affordable, qualified health benefit
plans. Exchanges will offer more choices of high-quality
coverage and lower prices. Exchanges will offer a choice of
plans that meet certain benefits and cost standards.
For the self-employed, the cost of the health insurance may be
deductible from federal taxes. As mentioned above, tax credits
will be available for health insurance purchased through an
exchange. These will be available to individuals with income
between 100% and 400% FPL and who are not eligible for other
affordable coverage.
Minimum essential coverage is defined as one of the following:
a) coverage under a specified government sponsored program; b)
coverage under an eligible employer-sponsored plan; c)
coverage under a health plan offered in the individual market
within a State; d) coverage under a grandfathered health plan;
and, e) other health benefits coverage, as specified.
Specified government sponsored programs include the following:
a) Medicare Part A; b) Medicaid; c) the Children's Health
Insurance Program; d) TRICARE; e) veteran's health care
programs, as determined by the Secretary of Veterans Affairs,
in coordination with the Secretary of Health and Human
Services and the Secretary of Treasury; f) a health plan
provided to Peace Corps volunteers; and, g) the
Nonappropriated Fund Health Benefits Program of the Department
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of Defense.
4)CCI . In November of 2010, California obtained federal approval
for a Section 1115(b) Medicaid Demonstration Waiver from CMS
entitled, "A Bridge to Reform Waiver." Among other
provisions, this waiver authorized mandatory enrollment into
MCPs of over 600,000 low-income SPDs who are eligible for
Medi-Cal only (not Medicare) in 16 counties. Enrollment was
phased in over a one-year period in the affected counties;
beginning on June 1, 2011. Services covered are preventative
and acute medical services including out-patient, primary
care, specialty care, care coordination, in-patient services,
durable medical equipment, drugs, and medical transportation.
Long Term Support Services (LTSS) were carved out of managed
care and are largely provided through fee-for-service. LTSSs
include IHSS, Community-Based Adult Services (CBAS),
Multipurpose Senior Services (MSSP), and skilled-nursing
facility services. The Legislature enacted a modified version
of the Governor's proposal for a statewide CCI in SB 1008
(Committee on Budget and Fiscal Review), Chapter 33, Statutes
of 2012, and SB 1036 (Committee on Budget and Fiscal Review),
Chapter 45, Statutes of 2012.
The two major parts of the CCI are the "Duals Demonstration" and
"Managed Medi-Cal LTSS." The Duals Demonstration is a
voluntary three-year demonstration for dual eligible
beneficiaries to receive coordinated medical, behavioral
health, long-term institutional, and Home and Community Based
Services (HCBS) services through a single organized delivery
system. Eight counties have been selected (Alameda, Los
Angeles, Orange, Riverside, San Bernardino, San Diego, San
Mateo, and Santa Clara). The CCI will use a capitated payment
model to provide Medicare and Medi-Cal benefits through
existing MCPs. The Managed Medi-Cal LTSS requires
Medi-Cal-only SPDs (who are currently mandated to enroll in a
MCP for health care services) and dual eligibles to receive
their Medi-Cal LTSS and behavioral and health care services
through the same plans.
SB 1008 requires the Administration to consult with stakeholders
while preparing for various aspects of CCI implementation and
oversight. SB 1036 primarily made changes to IHSS, including
changes to counties' share of cost for IHSS and a shift to
statewide collective bargaining for IHSS provider wages and
benefits-beginning with the eight demonstration counties. SB
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1036 also required a stakeholder workgroup to develop a
universal assessment tool for HCBS. DHCS has convened six
stakeholder workgroups to solicit input and develop standards
related to the duals demonstration. These include: a) LTSS
and IHSS integration; b) behavioral health integration; c)
beneficiary notices and protections; d) quality and
evaluation; e) provider outreach; and, f) fiscal and
rate-setting.
5)CCI-Related Changes to IHSS . According to the Legislative
Analyst's Office (LAO) SB 1036 makes major changes to the
administration of IHSS, including: a) the creation of a County
IHSS maintenance-of-effort (MOE) requirement for all 58
counties; b) a transition from local to statewide collective
bargaining for IHSS provider wages and benefits; and, c) the
development of a universal assessment tool for IHSS, CBAS, and
MSSP. Historically, for almost all IHSS recipients, 50% of
program costs were paid for by the federal government, with
32.5% paid for by the state and 17.5% by the counties. SB 1036
alters the historical county contribution by enacting a county
IHSS MOE, which replaces the county contribution of 17.5% with
a requirement that counties generally maintain their 2011-12
expenditure level for IHSS beginning in 2012-13, to be
adjusted annually for inflation beginning in 2014-15. All
increases in the non-federal share of IHSS costs above the
county IHSS MOE are borne by the state's General Fund. If the
duals demonstration project and the Statewide Authority
(described below) become inoperative pursuant to SB 1008 and
SB 1036, the county IHSS MOE would be discontinued on the
first day of the following fiscal year.
6)IHSS Wages and Benefits. According to one of this bill's
cosponsors, United Domestic Workers of America AFSCME Local
3930/AFL-CIO (UDW), IHSS wages and benefits are determined
through collective bargaining between the County/Public
Authority, which serves as employer and the IHSS provider
unions. IHSS provider wages and benefits vary substantially
across the state. In some counties providers are paid minimum
wage, while in a few counties they are paid substantially
higher. Hourly wages range from $8.00 to $12.20. According
to UDW, per state law, the state contribution toward IHSS
provider wages and health benefits ceases once the combined
rate reaches $12.10 per hour. Wages and benefits above this
rate are funded solely by the county and the federal
government. Eligibility for health benefits also varies by
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county along with plan benefits and out of pocket costs.
According to the LAO, collective bargaining over IHSS provider
wages and benefits will transition from the local level to an
entity known as the California IHSS Authority, or Statewide
Authority, beginning with the eight demonstration counties.
SB 1036 stipulates that this transition from local to
statewide collective bargaining will occur upon notification
by the county's director of health care services that the
enrollment of dual eligibles into managed care plans
participating in the demonstration (hereinafter referred to as
"demonstration plans") has been completed. If the duals
demonstration project becomes inoperative, then the employer
of record for the purposes of collective bargaining of IHSS
provider wages and benefits reverts back to the county. If
the Statewide Authority has entered into contracts with IHSS
providers, then the Statewide Authority would remain the
employer of record until the contract expires or is subject to
renegotiation-at which time the employer of record would
become the county.
7)Cal MediConnect . Federal approval for the dual eligible
portion of the CCI was received on March 27, 2013 in the form
of a Memorandum of Understanding (MOU), referred to as the Cal
MediConnect program. This component is the framework for the
demonstration allowing the combination of all Medicare and
Medi-Cal benefits into one plan. The MOU contains several
changes from the state's original proposal. Enrollment will
begin no earlier than October 2013. Beneficiaries would begin
receiving notices about their choices and upcoming changes no
earlier than July 2013. Beneficiaries who enroll in a Cal
MediConnect health plan can opt out at any time. California
originally proposed an initial six-month period, during which
eligible beneficiaries would have been required to remain in
the same health plan. The MOU allows for 456,000 total
beneficiaries to be eligible for enrollment into the Cal
MediConnect program. This is almost half the size called for
in the Governor's 2012-13 Budget Proposal of January 2012.
The number of enrollees in Los Angeles County will be capped
at 200,000 and enrollment will occur over a 15 month period.
There are also specified exempt populations, such as persons
with developmental disabilities receiving services through a
regional center, persons enrolled in specified waiver
programs, and except in San Mateo and Orange counties, persons
with end stage renal disease. In San Mateo enrollment will be
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completed by January 1, 2014 and in the other six counties,
enrollment will be over a 12 month period.
8)SUPPORT . UDW raises the question of who is the employer for
purposes of providing health care benefits in IHSS under the
ACA because there are different employers for different
purposes in IHSS. According to UDW, the recipient is the
employer for purposes of hiring, firing, and supervising an
IHSS provider. The County/Public Authority is the employer
for purposes of collective bargaining over wages, hours, and
other terms and conditions of employment, and the state is the
employer for purposes of performing payroll functions on
behalf of the recipient. UDW indicates there are different
implications depending on which entity is named employer.
Given the complexities around how ACA implementation will
impact the IHSS program, and specifically IHSS providers, UDW
believes it is necessary to convene an advisory committee that
will report on the appropriate employer in the IHSS program to
provide health care benefits to IHSS providers under the ACA.
9)DOUBLE REFERRAL . This bill is double referred, should it pass
out of this Committee, it will be referred to the Committee on
Human Services.
10)RELATED LEGISLATION .
a) AB 421 (Williams) Requires DSS and the Department of
Public Health, in consultation and collaboration with
others, as specified, to develop a training curriculum for
IHSS workers that addresses issues of consistency,
accountability, and increased quality of care health and
home care recipients. AB 421 is also pending in the
Assembly Committee on Human Services.
b) AB 518 (Yamada), heard in the Assembly Health Committee
for April 9, 2013, establishes CBAS as a benefit in the
Medi-Cal program. Among other things, specifies the
criteria for eligibility, requires that CBAS be provided at
licensed Adult Day Health Centers certified by DHCS as CBAS
providers, and requires CBAS providers to meet specified
standards and, beginning July 1, 2015, have non-profit
status.
c) AB 753 (Bonnie Lowenthal) requires the DHCS Director to,
among other things, maintain or enter into contracts
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directly with 11 caregiver resource centers to provide
direct services to caregivers of cognitively impaired
adults throughout the state, including: specialized
information; family consultation; respite care; short-term
counseling; and, support groups. Makes technical changes
to the medical terminology used in current diagnoses. AB
753 is currently set for hearing on April 16. 2013 is the
Assembly Committee on Health.
d) SB 172 (Beall) extends the earliest implementation date
for the sales tax on providers of IHSS, measured by gross
receipts paid to the provider and the related supplementary
payments to providers of IHSS by DSS paid out of the IHSS
Revenue Fund from January 1, 2012, to July 1, 2012. SB 172
is currently in the Senate Rules Committee pending referral
to a policy committee.
e) SB 579 (Berryhill) is a spot bill and currently makes a
technical, nonsubstantive change to current law regarding
the negotiation of wages and benefits for IHSS providers.
SB 579 is currently in the Senate Rules Committee.
11)PREVIOUS LEGISLATION .
a) SB 1008 and SB 1036 authorize the CCI as an eight-county
pilot project to: i) integrate Medi-Cal and Medicare
benefits under managed care for dual eligibles; and, ii)
integrate LTSS under managed care for dual eligibles and
Medi-Cal-only SPDs.
b) SB 208 (Steinberg), Chapter 714, Statutes of 2010,
contained the provisions implementing Section 1115(b)
Medicaid Demonstration Waiver from CMS entitled "A Bridge
to Reform Waiver." Among the provisions, this waiver
authorized mandatory enrollment into MCPs of over 600,000
low-income SPDs who are eligible for Medi-Cal only (not
Medicare) in 16 counties.
c) AB 1602 (John A. Pérez), Chapter 655, Statutes of 2010,
establishes the Exchange as an independent public entity to
purchase health insurance on behalf of Californians,
including those with incomes of between 100% and 400% of
the FPL and small businesses. Clarifies the powers and
duties of the board governing the Exchange relative to the
administration of the Exchange, determining eligibility and
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enrollment in the Exchange, and arranging for coverage
under qualified insurers.
d) SB 900 (Alquist), Chapter 659, Statues of 2010,
establishes the Exchange and requires the Exchange to be
governed by a five-member board, as specified.
e) SB 791 (Yee) of 2009 would have required, for purposes
of IHSS providers, the entity that administers health
benefits under the federal Consolidated Omnibus Budget
Reconciliation Act (COBRA) to be the same entity that
implements a federal COBRA subsidy under the American
Recovery and Reinvestment Act of 2009. SB 791 was vetoed
by Governor Schwarzenegger, in his veto message, he wrote:
"This bill is unnecessary. The Department of Social
Services has already provided guidance to counties on the
federal American Recovery and Reinvestment Act of 2009 and
the extended COBRA subsidy provisions through its existing
administrative authority."
f) AB 1682 (Human Services Committee), Chapter 90, Statutes
of 1999, makes changes to the IHSS program administered by
DSS for the purposes of implementing the Budget Act of
1999-2000. Among other things, requires each county to act
as, or establish, an employer for IHSS personnel for
purposes of collective bargaining and requires DSS to
establish a timetable for implementation of this
requirement.
12)POLICY COMMENT . Since the purpose of this advisory committee
is to develop recommendations on employer of record for
purposes of health coverage, it may be helpful to have an
expert on health benefits and the ACA included on the advisory
committee. In addition, the author may wish to clarify two
provisions: one requires a majority of the advisory committee
to be made up of current or past providers and the other
requires at least two members of the advisory committee to be
current or past providers.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO (co-sponsor)
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United Domestic Workers of America AFSCME Local 3930/AFL-CIO
(co-sponsor)
Opposition
None on file.
Analysis Prepared by : Hammad Khan / HEALTH / (916) 319-2097