BILL ANALYSIS Ó AB 1180 Page 1 Date of Hearing: May 15, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 1180 (Pan) - As Amended: May 2, 2013 Policy Committee: HealthVote:18-0 Urgency: Yes State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill makes inoperative, and if specified federal law changes occur, restores, various provisions of California law related to the purchase of health insurance by people who lose access to group coverage. Specifically, this bill: 1)Makes inoperative state law enacted to implement the federal Health Insurance Portability and Accountability Act (HIPAA) and to provide a conversion option for individuals losing group coverage to buy individual coverage. 2)Restores these same laws if federal health reform, the Patient Protection and Affordable Care Act (ACA), is repealed or amended to no longer apply to the individual market. 3)Requires health insurers and plans, as specified, to issue a notice at least 60 days prior to coverage renewal, based on a uniform model developed by the Department of Insurance (CDI) in the case of insurers, and the Department of Managed Health Care (DMHC) in the case of health care service plans, informing insureds and enrollees about coverage changes and options related to the ACA. FISCAL EFFECT 1)Minor costs, less than $100,000, to CDI and DMHC to develop the notice model. 2)Negligible costs for the provisions to make HIPAA and conversion laws inoperative and subsequently operative if specified ACA changes occur. If those ACA changes occur, this bill's provisions along with many other new state laws will AB 1180 Page 2 need to be reevaluated for potential cost issues. COMMENTS 1)Rationale . Health plans and health insurance companies believe that in a post-ACA world, where there is guaranteed issue, renewability, community rating, prohibitions on preexisting condition exclusions, and many other protections made available through the ACA, HIPAA and conversion requirements on carriers will no longer be necessary. If the ACA changes, the major provisions of California's implementing legislation would become inoperative and the prior laws (such as for HIPAA coverage) would be restored. This bill is supported by the California Association of Health Plans. 2)Related legislation . AB 2 1X (Pan), Chapter 1, Statutes of 2013, and SB 2 1X (Hernández), Chapter 2, Statutes of 2013, conform California law to the ACA as it relates to the ability to sell and purchase individual health insurance by prohibiting preexisting condition exclusions, establishing modified community rating, requiring the guaranteed issue and renewal of health insurance, and ending the practice of carriers conditioning health insurance on health status, medical condition, claims experience, genetic information or other factors. AB 2 1X and SB 2 1X, which address most individual market products except for the HIPAA and conversion coverage at issue in this bill, will take effect 90 days after the special session is adjourned. Analysis Prepared by : Debra Roth / APPR. / (916) 319-2081