BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 20
Author: Hernandez (D)
Amended: 5/8/14
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Individual health care coverage: enrollment periods
SOURCE : Author
DIGEST : This bill changes the 2015 open enrollment period for
individual market health plans and insurance policies from
October 1, 2013, through
March 31, 2014, to November 15, 2014, through February 15, 2015.
Assembly Amendments delete the Senate version of the bill
relating to workforce training and instead add the current
language.
ANALYSIS :
Existing law:
1.Establishes the Department of Managed Health Care to regulate
health plans and the California Department of Insurance to
regulate health insurers.
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2.Requires, under the federal Patient Protection and Affordable
Care Act (ACA), each state, by January 1, 2014, to establish a
health benefit exchange that makes qualified health plans
(QHPs) available to qualified individuals and qualified
employers, or, if a state chooses not to establish an
exchange, requires the federal government to establish one for
the state. Federal law establishes requirements for an
exchange, for health plans participating in an exchange, and
who is eligible to receive coverage in the exchange.
3.Requires health plans and insurers issuing health benefit
plans in the individual and small group markets to comply with
specific rules in the offering, sale, and scope of that
coverage, unless the coverage is grandfathered pursuant to the
ACA.
4.Restricts the purchase of guaranteed individual coverage to an
initial open enrollment period from October 1, 2013, through
March 31, 2014, subsequent annual enrollment periods from
October 15 through December 7, and in special enrollment
circumstances such as marriage, divorce, or loss of coverage,
as defined in state and federal law.
5.Requires, under federal regulations, annual open enrollment
for QHPs sold through Covered California to begin on November
15, 2014, and extend through February 15, 2015, for the
benefit year beginning on January 1, 2015.
6.Requires, under federal regulations, all health plans and
insurers in the individual market to allow an individual to
purchase health insurance coverage during the open enrollment
periods established for exchanges.
This bill:
1.Requires health plans and insurers in the individual market to
provide an annual enrollment period of November 15, 2014,
through February 15, 2015, for the policy year beginning on
January 1, 2015.
2.Requires health plans and insurers in the individual market to
provide the current annual enrollment period of October 15
through December 7 for policy years beginning on or after
January 1, 2016.
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3.Corrects a reference to federal law that defines the term
"individual market" and makes other minor, technical changes.
Background
Open enrollment . Under the ACA, individuals are required to
maintain health insurance or pay a penalty, with exceptions for
financial hardship, religion, incarceration, and immigration
status. The ACA also includes several insurance market reforms,
such as prohibitions against health insurers imposing
preexisting health condition exclusions and a requirement that
health plans and insurers offer essential health benefits in the
individual and small group markets. The ACA allows each state
to establish its own exchange to offer individual and small
group coverage; if a state declines, the federal government will
establish one for the state.
The ACA requires the Secretary of the U.S. Department of Health
and Human Services (HHS) to establish open enrollment periods
for health plans sold through state exchanges and requires
individual market plans sold outside an exchange to be offered
during this open enrollment period as well. Open enrollment
serves as a safeguard against people waiting to become sick to
enroll. People will generally be unable to enroll in individual
coverage outside of the open enrollment period unless they
experience a qualifying life event, which triggers a special
enrollment opportunity. Such events include loss of eligibility
for other coverage, gaining a dependent, divorce, or a large
change in income.
Federal regulations . A final HHS rule published March 11, 2014,
changed the open enrollment period for QHPs sold through
exchanges for the 2015 benefit year. According to the new rule,
the annual open enrollment period will begin on November 15,
2014, and extend through February 15, 2015. Coverage for a QHP
purchased by the 15th of December, January, or February will be
effective on the first day of the following month.
HHS, in its explanation of the rule, asserts that extending the
open enrollment period to February 15 is beneficial for
consumers because it provides additional time to select a plan.
HHS further posits that the additional time before open
enrollment will enable the collection of additional rating
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experience that could have a positive benefit on reducing 2015
rates for consumers. HHS notes that some stakeholders have
proposed alternate open enrollment period ranges for future
benefit years, and indicates that it intends to propose open
enrollment dates for the 2016 plan year at a later date,
allowing an additional year's experience to inform the
finalization of realistic enrollment dates for 2016.
HHS further notes that its change to the open enrollment period
applies to the individual health insurance market for plans
offered through and outside the exchange, since current federal
regulations require the dates of exchange open enrollment to
apply to the individual market generally.
Comments
The author's office states that this bill is intended to modify
the individual market open enrollment period for the 2015 policy
year in order to comply with the dates announced by HHS.
Prior Legislation
AB 2 X1 (Pan, Chapter 1, Statutes of 2013-14, First
Extraordinary Session) and
SB 2 X1 (Hernandez, Chapter 2, Statutes of 2013-14, First
Extraordinary Session) conform California law to the ACA as it
relates to the ability to sell and purchase individual health
insurance.
AB 1602 (John A. Pérez, Chapter 655, Statutes of 2010) and SB
900 (Alquist, Chapter 659, Statutes of 2010) establish Covered
California and its powers and duties.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee, this bill
would have negligible state fiscal effect.
SUPPORT : (Verified 5/28/14)
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Anthem Blue Cross
Association of California Life and Health Insurance Companies
California Association of Health Plans
Health Access California
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : Health Access California, in support,
states California has successfully implemented many elements of
the ACA, but there are still many things to improve before the
next open enrollment period. These include revising the single
application, improving information technology, changing rules
for enrollment assistance and many other operational,
implementation issues to make reform work for Californians.
Health Access writes private insurers have also faced very
significant operational challenges in meeting the flood of
demand for new coverage and coverage changes. One insurer
reported receiving more phone calls in two days than they
normally receive in a month. Other insurers are still
struggling to catch up with enrollment from the open enrollment
period that closed at the end of March, 2014. Medi-Cal also has
backlogs. Health Access states that, given the challenges
ahead, delaying and extending the next open enrollment period
makes sense.
JL:e 5/28/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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