BILL ANALYSIS Ó
AB 1180
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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Protection and Affordable Care Act (ACA), is repealed or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
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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