BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1428
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          Date of Hearing:  June 4, 2013

                            ASSEMBLY COMMITTEE ON HEALTH
                                 Richard Pan, Chair
                  AB 1428 (Conway) - As Introduced:  April 30, 2013
           
          SUBJECT  :  California Health Benefit Exchange: employees and  
          contractors.

           SUMMARY  :  Requires the California Health Benefit Exchange  
          (Exchange), known as Covered California, Board (Board) to  
          require all employees, prospective employees, contractors,  
          subcontractors, and vendors who facilitate enrollment in the  
          Exchange and have access to the financial or medical information  
          of enrollees or potential enrollees of the Exchange to be  
          fingerprinted for the purpose of obtaining criminal history  
          information.  Provides that a person convicted of crimes, as  
          specified, cannot be hired by or contracted with the Exchange  
          for the purpose of facilitating enrollment.  Contains an urgency  
          clause in order to become effective immediately upon enactment.   
          Specifically,  this bill  :  

          1)Requires the Board to require all employees, prospective  
            employees, contractors, subcontractors, and vendors who  
            facilitate enrollment of persons in a qualified health plan  
            (QHP) in the Exchange and who, in the course of their  
            employment, have access to the financial or medical  
            information of enrollees or potential enrollees of the  
            Exchange, to be fingerprinted for the purpose of obtaining  
            criminal history information.

          2)Prohibits the Exchange from the hiring of, or contracting  
            with, any person who has been convicted of:

             a)   Any felony crimes of dishonesty or breach of trust in a  
               state or federal jurisdiction;

             b)   Any violation of the federal crime prohibiting conduct  
               involving dishonesty, fraud, embezzlement, breach of trust,  
               corruptly influencing insurance activity, or false and  
               deceptive practices regarding the value of property, land,  
               or the financial condition of insurance businesses; 

             c)   Any felony;









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             d)   A misdemeanor which evidences present or potential  
               unfitness to perform the functions authorized by the  
               license in the manner consistent with the public health,  
               safety, and welfare, including but not limited to,  
               soliciting, attempting, or committing crimes involving the  
               following:

                i)      Dishonesty or fraud; 
                ii)     Any conviction arising out of acts performed in  
                  the business of insurance or any other licensed business  
                  or profession; 
                iii)    Theft; 
                iv)     Sexually related conduct affecting a person who is  
                  an observer or non-consenting participant in the conduct  
                  or convictions, or which requires registration under the  
                  Penal Code;
                v)      Resisting, delaying, or obstructing a public  
                  officer; 
                vi)     Any act or offense wherein the person willfully  
                  causes injury to the person or property of another; 
                vii)    Violation of a relation of trust or confidence, or  
                  a breach of fiduciary duty; or, 
                viii)   Multiple convictions which demonstrate a pattern  
                  of repeated and willful disregard for the law.

          3)Requires any person who has applied for employment in a  
            position in which he or she will have access to the financial  
            or medical information of enrollees of the Exchange to notify  
            the Exchange of any misdemeanor or felony conviction, any  
            filing of felony charges, any administrative actions regarding  
            professional or occupational license, or any convictions  
            listed in 2) above. 

          4)States legislative findings and declarations relating to the  
            target populations of the Assister's Program, outreach,  
            education, and marketing of the Exchange, that the Assister's  
            Program is expected to promote maximum enrollment and that  
            assisters will have access to Personal Identifying Information  
            (PII), Social Security Numbers (SSN), and other personal  
            information, that agents and brokers, health insurers, and  
            other entities who currently handle an applicant's sensitive  
            information are required to be licensed by the California  
            Department of Insurance (CDI), which is authorized to require  
            applicants for licensure to pass background checks, and that  
            it is in the public's interest that individuals purchasing  








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            insurance through the services of assisters have the same  
            reasonable expectations of privacy. 

           EXISTING LAW  :  

          1)Requires, effective January 1, 2014, under federal law, an  
            individual to have the option to apply for state subsidy  
            programs, which includes the state Medicaid program (Medi-Cal  
            in California), the state Children's Health Insurance Program  
            (CHIP), enrollment in a QHP and a Basic Health Plan, if there  
            is one, through a state exchange either in person, by mail,  
            online, by telephone, or other commonly available electronic  
            means.

          2)Permits Covered California to adopt rules and regulations, as  
            necessary, and permits Covered California to adopt any  
            necessary rules and regulations as emergency regulations in  
            accordance with the Administrative Procedure Act until January  
            1, 2016.

          3)Requires, under federal law, any person who receives  
            information provided by an applicant for coverage or receives  
            information from a federal agency, to use the information only  
            for the purposes of ensuring the efficient operation of the  
            Exchange, including verifying the eligibility of an individual  
            to enroll in the Exchange or to claim a premium tax credit or  
            cost-sharing reduction, and to not disclose the information to  
            any other person except as provided.

          4)Makes any person authorized by law to receive state summary  
            criminal history information records or information obtained  
            from a record who knowingly furnishes the record or  
            information to a person who is not authorized by law to  
            receive the record or information guilty of a misdemeanor.

          5)Requires the Department of Justice (DOJ) to furnish summary  
            criminal history information to specified agencies or  
            employers to be used for the purpose of employment, licensing,  
            or certification purposes.

           FISCAL EFFECT  :  This bill has not been analyzed by a fiscal  
          committee. 

           COMMENTS  :









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           1)PURPOSE OF THIS BILL  .  According to the author, starting with  
            an open enrollment period in October 2013, people who do not  
            have access to affordable insurance through an employer and  
            who do not qualify for Medicaid or CHIP will be able to  
            purchase QHPs through the Exchange.  The author states that  
            the Exchange will hire over 20,000 individuals to promote the  
            Exchange and enroll the public, known as Individual Assisters,  
            In-Person Assisters, or Navigators.  The author also states  
            that it is estimated that the Assisters and Navigators will  
            guide over four million Californians to enroll in the new  
            state Exchange.  According to the author, the target  
            populations in California's vast, geographically diverse mix  
            of rural and urban communities estimated at four million  
            eligible individuals include: 100,000 in Northern California  
            and Sierra Counties; 130,000 in the Sacramento Area; 390,000  
            in the Greater Bay Area; 250,000 in the San Joaquin Valley;  
            140,000 in the Central Coast; 780,000 in Los Angeles; and,  
            another 750,000 in Southern California.  Citing Covered  
            California, the author points out that the Assisters Program  
            is designed to target populations within the estimated four  
            million eligible individuals that are ethnically diverse:  
            1,880,000 estimated to be Hispanic; 1,340,000 White; 470,000  
            Asian; and, 210,000 African-American.  The author further  
            states that these Assisters and Navigators will have access to  
            millions of enrollees' most sensitive personal information  
            including: home addresses; SSNs; state and federal tax  
            information; and, personal health information (PHI).  

          According to the author, federal privacy and security guidelines  
            require state Exchanges to perform fingerprint-based criminal  
            background checks (background checks) prior to hiring any  
            person whose position will have access to personal information  
            for applicants and enrollees.  The author points out that the  
            guidance also requires periodic rescreening of employees with  
            access to this information.  Background checks and security  
            screening are required by the Centers for Medicare and  
            Medicaid Services (CMS) and the Internal Revenue Service (IRS)  
            for any employee who is authorized to have access to PII or  
            Federal Tax Information (FTI), respectively.  According to the  
            author, many state agencies in health, education, and  
            financial areas also require background checks.  For example,  
            the departments that conduct background checks on some or all  
            of their employees: Franchise Tax Board, Department of Motor  
            Vehicles, California State Teachers' Retirement System,  
            California State Lottery, and the Department of Managed Health  








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            Care.

          The author argues that in order to protect enrollees' personal  
            and financial information and prevent identify theft, it is  
            crucial to put into state law the list of crimes that would  
            automatically disqualify a person who works at Covered  
            California or who is an Assister from handling the enrollee's  
            personal and financial information.  According to the author,  
            this bill simply requires Covered California to obtain and  
            submit to DOJ fingerprint images and related information of  
            employees, prospective employees, contractors, subcontractors,  
            volunteers, or vendors for the purpose of obtaining criminal  
            offender record information and would prohibit a person who  
            has been convicted of felony crimes of dishonesty or breach of  
            trust in a state or federal jurisdiction or other specified  
            crimes from being hired by or contracting with Covered  
            California.

           2)BACKGROUND  .  On March 23, 2010, the Patient Protection and  
            Affordable Care Act (ACA) was passed and signed into law.  A  
            key component is the establishment of exchanges to serve as a  
            marketplace that allows consumer to apply for Medicaid  
            (Medi-Cal in California), CHIP, or advanced premium tax  
            credits (APTC), and cost sharing reductions to be used to  
            purchase QHP coverage for persons in a household with income  
            up to 400% of the federal poverty level (FPL).  Beginning in  
            2014, the ACA expands Medicaid eligibility to a new "adult  
            group" and collapses most existing eligibility categories into  
            three broad groups: parents; pregnant women; and, children  
            under age 19.  The "adult group" includes all non-pregnant  
            individuals ages 19 to 65 with household incomes at or below  
            133% FPL.  

          The ACA provides for a coordinated, streamlined enrollment  
            process for these programs to promote maximum enrollment and  
            facilitate a smooth process beginning with the use of a  
            single, streamlined application and seamless renewal.  As  
            required by the ACA, financial eligibility for most groups  
            will be based on modified adjusted gross income (MAGI), as  
            defined in the Internal Revenue Code.  The rule generally  
            adopts MAGI household income counting methods, eliminating  
            various income disregards currently used by states to  
            determine Medicaid eligibility.  The Medicaid eligibility  
            determination process will begin with a MAGI screen.  If an  
            individual is not found eligible for a MAGI group, the state  








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            must collect necessary information and determine eligibility  
            under all other Medicaid eligibility categories (i.e.,  
            MAGI-exempt groups, such as disability) and potential  
            eligibility for APTC in the Exchange.  States are required, to  
            the maximum extent possible, to rely on electronic data  
            matches with trusted third party sources to verify information  
            provided by applicants. 

          In order to verify eligibility, applicants will be providing  
            personal identifying and personal financial information such  
            as SSNs, state and FTI, date of birth, wage and income  
            information, residency, and citizenship information.   
            Verification will require that many Covered California  
            employees, prospective employees, contractors, subcontractors,  
            volunteers, and vendors will have access to applicant or  
            enrollee PII, PHI, and/or FTI as defined in the Health  
            Insurance Portability and Accountability Act, the California  
            Information Practices Act, and IRS regulations.  For example,  
            Covered California will request tax return data regarding MAGI  
            and family size from the federal Department of Health and  
            Human Services (DHHS) through a data hub if they have a SSN or  
            Taxpayer Identification Number and will use it to verify  
            information provided by the applicant.  Federal guidance  
            requires that Covered California protect and safeguard  
            customers from unauthorized and illegal access to or  
            disclosure of this information.  To comply with federal  
            guidance, Covered California has determined that it must  
            implement criminal records background checks to identify, and  
            exclude from accessing personal information, applicants with a  
            demonstrated history of abuse of personal information or other  
            offenses that may indicate potential propensity to abuse such  
            information.  According to Covered California, background  
            checks and security screening are required by CMS and the IRS  
            for any employee who is authorized to have access to PII or  
            FTI, respectively.  Many state agencies in health, education  
            and financial areas, including the Department of Managed  
            Health Care and the California Department of Insurance, also  
            require background checks.

          Based on federal guidance, Covered California has determined the  
            Exchange must meet Minimum Acceptable Risk Standards for  
            Exchanges (MARS-E), one of three on Exchange privacy and  
            security standards.  According to documents provided by  
            Covered California, the MARS-E requires all individuals  
            associated with the Exchange who would have access to  








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            sensitive information such as PII, PHI, and FTI to be screened  
            before they may be authorized to obtain access to the  
            information system and devices containing such information.   
            To meet these requirements, Covered California must perform a  
            background check for all persons prior to authorizing access  
            and require appropriate personnel to obtain and hold a  
            moderate-risk security clearance as defined in the federal  
            DHHS Personnel Security/Suitability Handbook.

          The MARS-E also requires periodic rescreening of individuals,  
            consistent with the criticality or sensitivity rating of the  
            position.  Furthermore, according to Covered California, the  
            IRS Publication 1075, Tax Information Security Guidelines  
            requires screening and consideration of an individual's  
            background and security clearance when designating personnel  
            who are authorized to access FTI.  

           3)ASSISTERS PROGRAM  .  Covered California is in the process of  
            establishing an Assisters Program that will include assister  
            enrollment entities (AEE) and individual entities.  AEEs are  
            entities and organizations eligible to be trained and  
            registered to provide in-person assistance to consumers and  
            help them apply for Covered California programs, particularly  
            entities that have access to Covered California's targeted  
            population.  Individual AEEs are individuals who are employed,  
            trained, certified, and linked to AEEs to provide in-person  
            assistance to consumers and help them apply for Covered  
            California programs and are individuals who can provide  
            assistance in a culturally and linguistically appropriate  
            manner to consumers.  The proposed compensation for AEEs is  
            $58.00 per new enrollment into Covered California, including a  
            person who was a MAGI-eligible Medi-Cal enrollee but upon  
            redetermination qualifies for Covered California and when a  
            currently enrolled person adds a new dependent.  Compensation  
            for annual renewal is $25.00.  There is no compensation for an  
            enrollment into Medi-Cal.

          The Board is expected to address regulations regarding AEE  
            fingerprinting and records checks at the June 20, 2013  
            meeting.  The proposed regulations applying to AEEs will  
            provide for notification to the applicant of disqualifying  
            information and allow for an appeal.  These regulations will  
            also provide for an opportunity to correct inaccurate or  
            incomplete information and request a new determination of  
            fitness for employment.








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           4)IMPLEMENTATION .  According to a Board Recommendation Brief  
            presented to the Exchange Board at the March 21, 2013 Board  
            meeting, in analyzing options for conducting background  
            checks, Covered California staff considered two standard types  
            of clearances: a) non-fingerprint-based background check; and,  
            b) fingerprint-based background check.  A  
            non-fingerprint-based background check is conducted using the  
            applicant's identifying information, such as SSN, to check  
            county data sources.  The fingerprinting-based background  
            check allows for a broader search including state and federal  
            crime databases maintained by DOJ and the Federal Bureau of  
            Investigation (FBI), respectively, and allows for subsequent  
            arrest notifications.  The staff determined that  
            fingerprint-based background checks are necessary to comply  
            with federal requirements for initial security clearance and  
            ongoing monitoring.  They noted that fingerprint-based  
            background checks will identify convictions and any arrests  
            for which charges are still pending and will not identify any  
            arrests that did not result in conviction.  Covered California  
            explored the possibility of using existing fingerprint checks  
            previously undergone by prospective Covered California  
            personnel to satisfy Covered California's background check  
            requirement.  This approach was determined not to meet federal  
            requirements because it will not provide a positive  
            identification of the individual being screened and will not  
            allow Covered California to receive required subsequent arrest  
            notifications.  

          On March 19, 2013, Insurance Commissioner (IC) Dave Jones sent a  
            letter to Covered California regarding this issue.  He stated  
            that he supported the staff proposal on fingerprinting and  
            background checks, but that in his opinion, it fell short with  
            regard to Assisters.  He further recommended a process and  
            standards to certify that persons seeking to become assisters  
            meet some minimum qualifications including that they not be  
            known as criminals with a history of felony or misdemeanor  
            convictions that indicate a history or dishonesty or breach of  
            trust.  The IC further recommended that applicants be excluded  
            if convicted of a felony or certain types of crimes of  
            dishonesty or moral turpitude and that applicants be required  
            to disclose all criminal convictions and administrative  
            actions.  The IC also recommended that the list of  
            disqualifying crimes be the same as those that apply to those  
            seeking an insurance agent license and suggested guidelines on  








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            how these crimes and acts are to be weighed when decisions are  
            made to issue or revoke a license and recommended that Covered  
            California use the CDI list of crime and other administrative  
            standards.  

          Covered California will use the judicially created standard of  
            crimes of moral turpitude to guide potentially disqualifying  
            offenses which could include theft, dishonesty, or fraud, as  
            well as, the manufacture or distribution of drugs and certain  
            violent or property offenses, such as assault with a deadly  
            weapon, murder, and arson, which are performed with an evil  
            intent. According to the Board Brief, this standard is used by  
            many other state departments and is simple shorthand as  
            compared to enumerating each disqualifying crime.  Other  
            crimes not likely to impact an individual's fitness for  
            employment, such as driving under the influence, drug  
            possession, and petty vandalism, will not be considered  
            disqualifying.  
            Background Checks are proposed to be performed as follows: 

              a)   Prospective Covered California employees  : As a condition  
               of employment, Covered California will require background  
               checks of all prospective employees whose duties include  
               access to PII, PHI, or FTI.  Hiring offers will be made  
               contingent on an acceptable background criminal record  
               check, and prospective employees will not begin employment  
               until the criminal record check is completed and approved.

              b)   Prospective Covered California contractors,  
               subcontractors, volunteers, and vendors  : Covered California  
               will require background checks of all prospective  
               contractors, subcontractors, volunteers and vendors whose  
               duties include access to PII, PHI, or FTI.  AEEs would be  
               considered volunteers or vendors depending on their  
               compensation terms.  For AEEs, acceptance to training will  
               be contingent on an acceptable background criminal record  
               check, and prospective AEEs will not begin training until  
               the criminal record check is completed and approved.

              c)   Current Covered California employees and contractors,  
               subcontractors, volunteers and vendors  :  CMS requires all  
               Covered California employees, contractors, subcontractors,  
                                                                 volunteers, and vendors to have a criminal record check  
               before hire.  Because some individuals in these positions  
               have already been hired and more will be hired before  








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               legislation can be obtained to authorize access to criminal  
               records, the treatment of existing personnel will need to  
               be discussed with federal oversight agencies.

              d)   Periodic rescreening of employees, contractors,  
               subcontractors, volunteers, and vendors  :  Once an employee,  
               contractor, subcontractor, volunteer, or vendor has been  
               fingerprinted and approved for access to personal  
               information, Covered California will receive any subsequent  
               arrest and conviction information from DOJ for California  
               offenses.  There is no additional charge for this  
               information, and no further action will be required of the  
               employee, contractor, subcontractor, volunteer, or vendor.

           5)UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION (EEOC)  
            GUIDANCE  .  The EEOC enforces Title VII of the Civil Rights Act  
            of 1964 (Title VII) which prohibits employment discrimination  
            based on race, color, religion, sex, or national origin.  In  
            April of 2012, the EEOC issued an Enforcement Guidance on the  
            consideration of arrest and conviction records in employment  
            decisions as part of the EEOC's efforts to eliminate unlawful  
            discrimination in employment screening, for hiring or  
            retention, by entities covered by Title VII, including private  
            employers as well as federal, state, and local governments.   
            According to the Guidance, in the last twenty years, there has  
            been a significant increase in the number of Americans who  
            have had contact with the criminal justice system and,  
            concomitantly, a major increase in the number of people with  
            criminal records in the working-age population.  In 1991, only  
            1.8% of the adult population had served time in prison.  After  
            10 years, in 2001, the percentage rose to 2.7% (one in 37  
            adults).  By the end of 2007, 3.2% of all adults in the United  
            States (one in every 31) were under some form of correctional  
            control involving probation, parole, prison, or jail.  The  
            DOJ's Bureau of Justice Statistics has concluded that, if  
            incarceration rates do not decrease, approximately 6.6% of all  
            persons born in the United States in 2001 will serve time in  
            state or federal prison during their lifetimes.  The Guidance  
            goes on to point out that arrest and incarceration rates are  
            particularly high for African American and Hispanic men.   
            African Americans and Hispanics are arrested at a rate that is  
            two to three times their proportion of the general population.  
             Assuming that current incarceration rates remain unchanged,  
            about one in 17 White men are expected to serve time in prison  
            during their lifetime; by contrast, this rate climbs to one in  








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            6 for Hispanic men; and, to one in three for African American  
            men.  

          In updating, consolidating, and incorporating longstanding court  
            decisions and policy documents, the EEOC issued revised  
            directions.  Of relevance to this bill is the specific  
            guidance on the disparate impact of a policy that may seem  
            neutral on its face.  The guidance states that a covered  
            employer is liable for violating Title VII when the plaintiff  
            demonstrates that the employer's neutral policy or practice  
            has the effect of disproportionately screening out a Title  
            VII-protected group and the employer fails to demonstrate that  
            the policy or practice is job related for the position in  
            question and consistent with business necessity.  The first  
            step is to look at which offenses or classes of offenses are  
            reported to the employer (e.g., all felonies, all drug  
            offenses); whether convictions (including sealed and/or  
            expunged convictions), arrests, charges, or other criminal  
            incidents were reported; how far back in time the reports  
            reached (e.g., the last five, 10, or 20 years); and, the jobs  
            for which the criminal background screening was conducted.  In  
            determining the impact, the Guidance points out that  
            nationally, African Americans and Hispanics are arrested in  
            numbers disproportionate to their representation in the  
            general population.  In 2010, 28% of all arrests were of  
            African Americans, even though African Americans only  
            comprised approximately 14% of the general population.  In  
            2008, Hispanics were arrested for federal drug charges at a  
            rate of approximately three times their proportion of the  
            general population.  Moreover, African Americans and Hispanics  
            were more likely than Whites to be arrested, convicted, or  
            sentenced for drug offenses even though their rate of drug use  
            is similar to the rate of drug use for Whites.  African  
            Americans and Hispanics also are incarcerated at rates  
            disproportionate to their numbers in the general population.   
            Based on a state-by-state examination of incarceration rates  
            in 2005, African Americans were incarcerated at a rate 5.6  
            times higher than Whites, and seven states had a  
            Black-to-White ratio of incarceration that was 10 to one.  In  
            2010, Black men had an imprisonment rate that was nearly seven  
            times higher than White men and almost three times higher than  
            Hispanic men.  The Guidance concludes that this data supports  
            a finding that criminal record exclusions have a disparate  
            impact based on race and national origin.  The Guidance  
            further cites case law that suggests that exclusions, in order  








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            to not be discriminatory, must consider the nature and gravity  
            of the offense, the time that has passed since the offense and  
            the nature of the job sought. 

          Even the federal government, imposes criminal record  
            restrictions on its workforce through "suitability"  
            requirements for certain positions.  The federal government's  
            Office of Personnel Management (OPM) defines suitability as  
            "determinations based on a person's character or conduct that  
            may have an impact on the integrity or efficiency of the  
            service."  Under OPM's rules, agencies may bar individuals  
            from federal employment for up to three years if they are  
            found unsuitable based on criminal or dishonest conduct, among  
            other factors.  OPM gives federal agencies the discretion to  
            consider relevant mitigating criteria when deciding whether an  
            individual is suitable for a federal position.  These  
            mitigating criteria provide an individualized assessment of  
            the applicant's background, and allow consideration of: a) the  
            nature of the position for which the person is applying or in  
            which the person is employed; b) the nature and seriousness of  
            the conduct; c) the circumstances surrounding the conduct; d)  
            how recent is the conduct; e) the age of the person involved  
            at the time of the conduct; f) contributing societal  
            conditions; and, g) the absence or presence of rehabilitation  
            or efforts toward rehabilitation.  

           6)COST  .  The estimated cost for an individual criminal  
            background check is approximately $65 which includes the cost  
            of fingerprinting and fees charged by DOJ and the FBI.  For  
            employees or prospective employees and individuals who have  
            successfully completed the training and certification process  
            to be an AEE, the Exchange staff recommend that Covered  
            California pay the cost for the background checks for year  
            one.  The policy to pay for background checks for certified  
            Assisters will be specified in forthcoming Assister program  
            recommendations.  Covered California's other contactors,  
            subcontractors, volunteers, and vendors that are not AEEs  
            would pay for the cost of background checks for employees and  
            prospective employees who would be required to undergo a  
            background check.  Covered California is planning to engage in  
            negotiations to receive a state-wide discount rate through a  
            company such as LiveScan and offer the services to  
            contractors, subcontractors, volunteers, and vendors to reduce  
            costs.









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           7)RELATED LEGISLATION  .  

             a)   SB 509 (DeSaulnier), requires the Board of the Exchange  
               to require fingerprint images and related information of  
               all employees, prospective employees, contractors,  
               subcontractors, volunteers, or vendors whose duties include  
               or would include access to confidential information, PII,  
               PHI, FTI, financial information, or any information as  
               required by federal law or guidance, as applicable for the  
               purposes of obtaining information as to the existence and  
               content of a record of state or federal criminal history  
               and information as to the existence and content of pending  
               state or federal arrests, as specified.

             b)   SB 4 X1 (Emmerson) and AB 3 X1 (Conway) would require  
               all employees and vendors who would have access to  
               financial or medical information to be subject to  
               background checks and prohibit any person convicted of  
               specified crimes from being employed by or to enter into a  
               contract with the Exchange.

           8)PREVIOUS LEGISLATION  .  AB 1602 (Pérez), Chapter 655, Statutes  
            of 2010, and SB 900 (Alquist), Chapter 659, Statutes of 2010,  
            establish the Exchange, now called Covered California, to  
            screen low-income persons for Medi-Cal eligibility and as a  
            market place for people with family incomes up to 400% FPL to  
            purchase QHPs and to obtain APTCs and other cost sharing  
            reductions. 

           9)POLICY COMMENTS  .  

              a)   Inconsistent with the Exchange Proposed Policy.   The  
               language in this bill is both over inclusive and under  
               inclusive with regard to the policy the Exchange Board is  
               proposing to adopt and potentially with regard to  
               compliance with federal law.  For instance, SB 509 and the  
               Draft Regulations proposed for adoption by the Exchange  
               include volunteers in order to ensure that Assisters who  
               work with Community-Based Organizations and will not  
               necessarily be under contract with the Exchange, but  
               nonetheless will have access to PII, PHI, and tax  
               information are required to undergo a background check.   
               This bill does not.  In addition, SB 509 and the Draft  
               Regulations cover employees and contractors who have access  
               to this type of information in the course of working on the  








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               California Healthcare Eligibility, Enrollment, and  
               Retention System as technical experts maintaining the  
               information technology system.  This bill is limited to  
               those who facilitate enrollment.  

             On the other hand, this bill enacts an absolute bar for  
               anyone who has been convicted of any of a list of offenses  
               that include any felony conviction and misdemeanors such as  
               resisting arrest.  This would exclude someone who was  
               convicted of resisting arrest as a result of a political  
               demonstration at any time in the past.  It would also  
               exclude persons convicted of felonies that are unrelated to  
               their current capacity to be trusted with financial or  
               medical information, such drug-related offenses that  
               occurred many years prior and for which the person has long  
               since atoned, paid their debt to society and has been  
               rehabilitated, regardless of the person's demonstrated  
               current ability to be trusted with the information.  This  
               policy is inconsistent with the EEOC Guidance cited above  
               and most likely would be found to violate Title VII of the  
               Civil Rights Act of 1996.  

              b)   Vague and Overly Broad.   This bill also has an overly  
               broad provision that requires a person to notify the  
               Exchange of actions taken against a professional license,  
               which is not required under the federal guidance.  It  
               appears to be taken from a suggestion by the IC that a  
               process be adopted similar to that used for licensed  
               agents.  However, this does not seem relevant to assisters  
               or even Exchange employees.  This bill also uses a list of  
               crimes that are from federal law that are referenced in the  
               IC's March 2013 letter.  However, this bill does not  
               include the additional provisions, as suggested in the IC's  
               letter and that are in state law and regulation that allow  
               discretion.  Existing state law and regulation provide for  
               a case by case analysis based on a variety of factors and  
               not an absolute bar. 

              c)   Inconsistent with MARS-E.   The bill does not provide for  
               the use of the usual mechanism of conducting a criminal  
               background check which is to require fingerprints and  
               personal identifying information and to require the DOJ to  
               use the criminal records data base to identify a person's  
               criminal history.  This mechanism would also allow for  
               periodic screening to identify new arrests or convictions  








                                                                  AB 1428
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               as required by the MARS-E.  

              d)   Technical Issues.   This bill has many technical issues  
               that need to be addressed.  For instance, it does not  
               specify how the Exchange is to determine the existence of a  
               criminal record other than asking an applicant.  It  
               requires fingerprints but does provide the necessary  
               authorization to obtain the information from DOJ.  This  
               bill also does not provide for how the costs will be  
               covered, does not allow for a person to contest the  
               determination of a disqualifying conviction, and does not  
               authorize the Exchange to take other actions necessary to  
               implement its provisions. 

           REGISTERED SUPPORT / OPPOSITION  :  

           Support 
           
          None on file.

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    Marjorie Swartz / HEALTH / (916)  
          319-2097