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            Protection and Affordable Care Act (ACA), is repealed or  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