BILL ANALYSIS Ó
AB 1180
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CONCURRENCE IN SENATE AMENDMENTS
AB 1180 (Pan)
As Amended September 3, 2013
2/3 vote. Urgency
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|ASSEMBLY: |69-1 |(May 24, 2013) |SENATE: |39-0 |(September 9, |
| | | | | |2013) |
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Original Committee Reference: HEALTH
SUMMARY : Makes inoperative because of the federal Patient
Protection and Affordable Care Act (ACA) several provisions in
existing law that implement the health insurance laws of the
federal Health Insurance Portability and Accountability Act of
1996 (HIPAA) and additional provisions that provide former
employees rights to convert their group health insurance
coverage to individual market coverage without medical
underwriting. Establishes notification requirements informing
individuals affected by this bill of health insurance available
in 2014.
The Senate amendments :
1)Give the California Department of Insurance (CDI) and the
Department of Managed Health Care (DMHC) the authority to
adopt additional model notices not subject to the
Administrative Procedures Act (APA) related to health
insurance carrier notifications to consumers. Permit CDI and
DMHC to modify the wording of model notices specifically for
the purposes of clarity, readability, and accuracy, and make
these vital documents, subject to the applicable requirements
of existing law.
2)Establish that the Managed Risk Medical Insurance Board
(MRMIB) is not obligated to provide any payment to any health
care service plan under an existing pilot project for health
care expenses incurred on or after January 1, 2014, or the
standard monthly administrative fee, as defined as it existed
on January 1, 2007, for any month after December 2013.
Requires notifications to be sent out to enrolled individuals
if a health care service plan terminates coverage.
3)Establish new premium caps for individuals in grandfathered
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HIPAA and conversion coverage as follows:
a) For coverage provided in 2014, the rate charged in 2013
for that coverage multiplied by 1.09.
b) For coverage provided in 2015 and each subsequent year,
the rate charged in the prior year multiplied by a factor
of one plus the percentage change in the statewide average
premium for the second lowest cost silver plan offered on
the Exchange. Requires the Exchange to determine the
percentage change in the statewide average premium for the
second lowest cost silver plan, as specified.
4)Include Insurance Code provisions to avoid conflicts between
this bill and AB 1391 (Insurance Committee) of the current
legislative session.
5)Make other technical corrections to this bill.
EXISTING LAW :
1)Establishes DMHC to regulate health plans under the Knox-Keene
Health Care Services Plan Act of 1975 in the Health and Safety
Code; CDI to regulate health insurers under the Insurance
Code; and, the Exchange to compare and make available through
selective contracting with health plans and health insurance
for individual and small business purchasers as authorized
under the ACA.
2)Defines a grandfathered health plan as having the same meaning
as that term is defined in the ACA. Federal law defines a
grandfathered health plan as any group health plan or health
insurance coverage to which Section 1251 of the ACA applies
(in general, coverage that existed as of March 23, 2010, which
permits new enrollment only for new employees or dependents).
AS PASSED BY THE ASSEMBLY , this bill required carriers to issue
notices to individuals affected by this bill, informing them of
changes in insurance laws beginning January 1, 2014, required
uniform model notices to be adopted by CDI and DMHC no later
than September 1, 2013, and exempted both CDI and DMHC from the
APA for purposes of adopting the model notices.
FISCAL EFFECT : According to the Senate Appropriations
Committee, one-time costs of about $240,000 for the DMHC to
review health plan filings, develop model notices for health
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plans, and develop regulations (Managed Care Fund). One-time
costs of $22,000 to develop the required notice to consumers and
ongoing costs of about $10,000 per year for enforcement by the
Department of Insurance (Insurance Fund).
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0002320