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  








                                                                  AB 1180
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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  
                                                       


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