BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 353
AUTHOR: Lieu
INTRODUCED: February 20, 2013
HEARING DATE: April 10, 2013
CONSULTANT: Trueworthy
SUBJECT : Health care coverage: language assistance.
SUMMARY : Requires health plans and health insurers
(collectively referred to as carriers) that advertise or market
in a language other than English, and that language does not
meet the minimum thresholds established in current law, to
translate specified documents into that language. Prohibits an
insurer from publishing or distributing, or allowing to be
published or distributed on its behalf, any advertisement unless
specified conditions are met.
Existing law:
1.Provides for the regulation of health insurers by the
California Department of Insurance (CDI) under the Insurance
Code and provides for the regulation of health plans by the
Department of Managed Health Care (DMHC) pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene
Act).
2.Establishes the federal Patient Protection Affordability Care
Act (ACA), which imposes various requirements, some of which
take effect on January 1, 2014, on states, carriers,
employers, and individuals regarding health care coverage.
Requires every individual to be covered under minimum
essential coverage, as specified, and requires every health
insurance issuer offering coverage in the individual or small
group markets to ensure coverage includes specified essential
health benefits.
3.Establishes the California Health Benefits Exchange (Covered
California) to facilitate the purchase of qualified health
plans through Covered California by qualified individuals and
qualified small employers by January 1, 2014.
4.Prohibits a health plan from publishing or distributing an
advertisement unless a copy thereof has first been filed with
the Director of the DMHC at least 30 days prior to that use
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and the Director has not found the advertisement to be untrue,
misleading, deceptive, or in violation of the Knox-Keene Act
within those 30 days.
5.Authorizes the Director of DMHC to require a plan to publish a
correction or retraction of an untrue, misleading, or
deceptive statement contained in the advertisement and to
prohibit the health plan from publishing the advertisement or
a material revision without filing a copy with the Director if
an advertisement fails to comply with the Knox-Keene Act.
6.Authorizes the Director of DMHC to exempt a health plan or an
advertisement from the requirements described above.
7.Prohibits a health plan, solicitor, solicitor firm, or
representative from using any advertising or solicitation, or
making or permitting the use of any verbal statement, that is
untrue or misleading or any form of evidence of coverage that
is deceptive.
8.Permits, under the Knox-Keene Act, the Director of DMHC to
require that solicitors, solicitor firms and principal persons
engaged in the supervision of solicitation for plans of
solicitor firms to meet such reasonable and appropriate
standards with respect to training, experience, and other
qualifications as the Director finds necessary and
appropriate.
9.Defines, under the Insurance Code, unfair methods of
competition and unfair and deceptive acts or practices in the
business of insurance. Makes any person who engages in any
unfair method of competition or any unfair or deceptive act or
practice liable to the state for a civil penalty to be fixed
by the Insurance Commissioner, not to exceed $5,000 for each
act or, if the act or practice was willful, a civil penalty
not to exceed $10,000 for each act.
10.Defines unfair methods of competition and unfair and
deceptive acts in in the business of insurance as making or
disseminating, or causing to be made or disseminated before
the publication any statement containing any assertion,
representation, or statement which is untrue, deceptive, or
misleading, and which is known, or should be known, to be
untrue, deceptive, or misleading.
11.Requires each insurer to the extent required by the
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commissioner of CDI, to file with copies of all printed
advertising the insurer proposes to disseminate in the state.
12.Requires DMHC and CDI to adopt regulations establishing
standards and requirements to provide enrollees and insureds
with appropriate access to language assistance in obtaining
health care services.
13.Requires carriers to translate specified vital documents into
a language when a certain proportion of its enrollees or
insureds indicate a preference for written materials in that
language. Requires carriers to complete an assessment of the
linguistic needs of its enrollee population and based on the
size and language needs assessment, determines its "threshold"
languages.
14.Requires carriers to report to the respective departments
their internal policies and procedures related to cultural
appropriateness.
This bill:
1.Requires a carrier that advertises or markets in a language
other than English, and which do not meet the minimum
threshold languages, to translate into that language all of
the following documents:
a) Welcome letters or notices of initial coverage, if
provided;
b) Applications to participate in a program or activity or
to receive a benefit or service;
c) Letters containing important information regarding
eligibility or participation criteria;
d) Notices advising limited-English-proficient (LEP)
persons of the availability of no-cost translation and
interpretation services;
e) Notices pertaining to the right and instructions on how
to file a grievance; and
f) Uniform summaries of benefits of coverage.
1. Requires a carrier to use a trained and qualified translator
for all written translations of marketing and advertising
materials relating to health care service plan products, and
for all the documents listed in 1) above.
2.Prohibits an insurer from publishing or distributing, or
allowing to be published or distributed on its behalf, any
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advertisement unless both of the following conditions are met
at least 30 days prior or any shorter period as CDI allows by
regulation:
a) A true copy of the advertisement has first been filed
with CDI; and
b) CDI has not found the advertisement, wholly or in part,
to be untrue, misleading, deceptive, or otherwise not in
compliance.
1.Allows an insurer that has been continuously licensed for the
preceding 18 months to publish or distribute, or allow to be
published or distributed on its behalf, an advertisement
without having filed it with CDI for prior approval, if the
insurer and the material comply with each of the following
conditions:
a) The advertisement or a material has not been previously
disapproved by CDI and the insurer reasonably believes that
the advertisement does not violate any rules; and
b) The insurer files a true copy of each new or materially
revised advertisement with CDI no later than 10 business
days after publication or distribution of the
advertisement.
1.Authorizes CDI to require the insurer to publish an approved
correction or retraction of any untrue, misleading, or
deceptive statement contained in the advertising.
2.Authorizes a health insurer, insurance agent, or other person
to file a written request for a hearing with CDI within 30
days after receipt of any notice or order.
3.Authorizes CDI to develop regulations to classify plans and
advertisements as exempt from 3) and 4) described above.
Prohibits CDI from exempting new products or products offered
by insurers with a record within the past five years of
violations of these requirements.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee
COMMENTS :
1.Author's statement. The ACA has the potential to cover four to
five million individuals who currently lack access to health care
coverage. In Covered California, over two million people will be
eligible for subsidies to help them purchase health insurance.
Consumer trust in the establishment and operation of Covered
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California is critical to its success. The opportunities for
confusion, misinformation and outright deception about the
individual mandate, employer requirements, who is eligible for
what type of coverage, and other provisions of the ACA will be
considerable. In particular, low-income consumers, communities of
color and LEP individuals as well as the small business owners in
those communities are often the most preyed upon. There are some
existing protections in the Knox-Keene Act and some in the
Insurance Code. This legislation builds on those protections to
ensure consumers trust in the expansion of this program and are
protected against bad actors or unscrupulous individuals.
2.Federal health care reform. On March 23, 2010, President
Obama signed the ACA
(Public Law 111-148), as amended by the Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152).
Among other provisions, the new law makes statutory changes
affecting the regulation of and payment for certain types of
private health insurance. Beginning in 2014, individuals will
be required to maintain health insurance or pay a penalty,
with exceptions for financial hardship (if health insurance
premiums exceed eight percent of household adjusted gross
income), religion, incarceration, and immigration status.
Several insurance market reforms are required, such as
prohibitions against carriers imposing lifetime benefit limits
and pre-existing health condition exclusions. These reforms
impose new requirements on states related to the allocation of
insurance risk, prohibit insurers from basing eligibility for
coverage on health status-related factors, allow the offering
of premium discounts or rewards based on enrollee
participation in wellness programs, impose nondiscrimination
requirements, require insurers to offer coverage on a
guaranteed issue and renewal basis, and determine premiums
based on adjusted community rating (age, family, geography and
tobacco use).
Additionally, by 2014, either a state will establish separate
exchanges to offer individual and small group coverage, or the
federal government will establish one. Exchanges will not be
insurers but will provide eligible individuals and small
businesses with access to private plans in a comparable way.
In 2014, some individuals with income below 400 percent of the
federal poverty level (FPL) will qualify for credits toward
their premium costs and for subsidies toward their
cost-sharing. California's exchange, Covered California
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operates as an independent government entity with a
five-member Board of Directors. The ACA also expands the
Medicaid program to cover adults without children and expands
the income requirements to 138 percent of FPL based on
modified adjusted gross income rules.
3.Language Assistance. SB 853 (Escutia), Chapter 713, Statutes
of 2003, required DMHC to develop regulations that require
health plans to provide language assistance services,
including certain translation and interpretation services, to
LEP enrollees. The language assistance regulations require
health plans to conduct periodic enrollee assessments to
evaluate the linguistic needs of the enrollee population,
maintain policies and procedures to ensure that LEP enrollees
are able to access language assistance services, instruct
staff on the use of the language assistance services, and
monitor the plan's operations and services to ensure
compliance with the language assistance regulations.
Plans must provide translation services for their identified
threshold languages as determined by the periodic enrollee
assessment and translate specified documents including:
applications; consent forms; letters containing important
information regarding eligibility and participation criteria;
notices pertaining to the denial, reduction, modification, or
termination of services and benefits, the right to file a
grievance or appeal; notices advising LEP enrollees of the
availability of free language assistance and other outreach
materials that are provided to enrollees; explanation of
benefits or similar claim processing information that is sent
to an enrollee if the document requires a response from the
enrollee; and portions of plan disclosure forms containing
information regarding the benefits, services, and terms of the
plan contract.
Health plans are required to place a notice of the
availability of language assistance services on all English
versions of vital documents, all enrollment materials, all
correspondence from the plan confirming a new or renewed
enrollment, brochures, newsletters, outreach and marketing
materials, and other materials routinely disseminated to
enrollees. Interpretation services are also required to be
provided to enrollees at all plan points of contact where the
enrollee might have need for such services. Health plans are
required to provide interpretation services for any language
requested by an enrollee, irrespective of whether the language
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is identified as one of the plan's threshold languages.
4.Prior legislation. SB 1313 (Lieu) would have made several
changes to existing marketing
and advertising rules for health plans, insurers, solicitors,
brokers, and agents. SB 1313 failed passage in the Senate
Appropriations Committee.
AB 1761 (John A. Pérez), Chapter 876, Statutes of 2012, gave
DMHC and CDI enforcement authority over licensees who hold
themselves out as representing or providing services on behalf
of Covered California without a valid agreement. Makes holding
oneself out as representing, constituting, or otherwise
providing services on behalf of Covered California without a
valid agreement unfair competition.
SB 900 (Alquist), Chapter 659, and AB 1602 (John A. Pérez),
Chapter 655, Statutes of 2010, established Covered California.
SB 1273 (Scott), Chapter 730, Statutes of 2004, prohibits an
insurer, agent or broker from making or using a statement
that is known, or should have been known, to be a
misrepresentation of the terms, benefits, or dividends of an
insurance policy, and prohibits a person from making a
statement that is known, or should have been known, to be a
misrepresentation for the purpose of inducing another person
or policyholder to take certain actions, and increases the
maximum penalty for such misrepresentations to up to one year
and/or a fine of up to $25,000, and provides that when the
loss to the victim exceeds $10,000, the maximum fine is three
times the amount of that loss.
SB 853 (Escutia), Chapter 713, Statutes of 2003, required DMHC
to adopt, not later than January 1, 2006, regulations
establishing standards and requirements to provide health care
service plan enrollees with access to language assistance in
obtaining health care services.
5.Support. Health Access writes that the Knox-Keene Act
provides numerous protections for consumers enrolled in
managed care plans regulated by DMHC. Health Access argues SB
353 extends prior approval of marketing materials for health
coverage to the Insurance Code. SB 353 is needed to counter
the flood of misinformation about federal health reform, its
benefits and requirements. The California Immigrant Policy
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Center writes in support that SB 353 would strengthen consumer
protections for new health care enrollees and protect them
against potential fraudulent or deceptive marketing practices.
The California Pan-Ethnic Health Network (CPEHN) writes that
SB 353 seeks to build consumers' trust in the system by
strengthening consumer protections and closing gaps in the
current law. CPEHN writes that SB 353 protects LEP enrollees
by requiring critical enrollment information be translated
when carriers market in non-English languages and it aligns
the responsibilities of CDI with DMHC to review and approve
marketing materials.
6.Opposition. The California Association of Health Plans (CAHP)
writes in opposition to SB 353 that the bill will increase
costs and administrative burdens on health plans trying to
reach new communities and inform them about coverage options
available through the ACA. CAHP writes that health plans
already routinely provide telephonic interpreter services and
will translate documents either verbally or in writing upon
request for those speaking a diverse range of languages. CAHP
argues that requiring health plans to translate many documents
into "nonthreshold languages even if it publishes just one
advertisement or notice will be costly and could have the
unintended consequence of lessening plan outreach.
7.Authors Amendments.
a) Translation requirements. SB 353 only requires a health
plan or insurer that markets a product in a language other
than English or a threshold language to comply with the
requirements of this bill. Agents, brokers, or solicitors,
who often market on behalf of a carrier, would not need to
comply with these provisions. The author is proposing the
following amendment: Page 3, Line 4 after "markets" insert:
,or allows any other person or business to market or
advertise on its behalf,
b) Marketing approval requirements. Current law prohibits
any statement containing any assertion, representation, or
statement with respect to the business of insurance or with
respect to any person in the conduct of his or her
insurance business, which is untrue, deceptive, or
misleading, and which is known, or which by the exercise of
reasonable care should be known, to be untrue, deceptive,
or misleading. SB 353 would require marketing materials to
be filed with CDI at least 30 days prior to publishing and
the director has not found the advertisement to be untrue,
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misleading or deceptive. Concern has been raised that this
could require prior approval. The author is proposing an
amendment to clarify and conform to existing law in
Knox-Keene. On Page 4, Line 8 after "deficiencies" insert
the following: "within the 30 days or any shorter time as
the director by rule or order may allow."
c) Documents. SB 353 requires specified documents to be
translated into a language a carrier advertises or markets
in, if that language does not meet the minimum threshold
languages established in current law. The list of documents
appears to be duplicative and adds language related to
threshold languages already required in existing law. The
author is proposing the following amendments:
I. Page 3, Lines 9-10: (2) Applications for
enrollment and any information pertinent to
eligibility or participation . to participate in a
program or activity or to receive a benefit or
service.
II. Page3, Strike Lines 11 and 12.
III. Page 3, Strike Lines 21 -26.
SUPPORT AND OPPOSITION :
Support: California Pan-Ethnic Health Network (sponsor)
California Immigrant Policy Center (sponsor)
Health Access California (co-sponsor)
American Cancer Society Cancer Action Network
American Federation of State, County and Municipal
Employees, AFL-CIO
Asian Americans for Civil Rights and Equality
Asian Pacific American Legal Center
Black Women for Wellness
California Black Health Network
` California Rural Legal Assistance Foundation
Centro Binacional para el Desarrollo Indigena
Oaxaqueno
Consumers Union
Earth Mama Healing, Inc.
Greenlining Institute
Guam Communications Network
Korean Community Center of the East Bay
Pacific Islander Cancer Survivors Network
Street Level Health Project
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Oppose: Association of California Life and Health Insurance
Companies
California Association of Health Plans
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