BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 353 (Lieu) - Health care coverage: language assistance.
Amended: April 16, 2013 Policy Vote: Health 7-2
Urgency: No Mandate: Yes
Hearing Date: May 23, 2013 Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: SB 353 would require health plans and health
insurers who market in languages other than English to translate
certain documents into those languages. The bill prohibits
health insurers from distributing advertising materials unless
certain conditions are met.
Fiscal Impact:
One-time costs of about $250,000 for the adoption of
regulations by the Department of Managed Health Care
(Managed Care Fund).
One-time costs of $70,000 for review of health plan
contracts and other documents by the Department of Managed
Health Care to ensure that health plan policies comply with
the bill's requirements (Managed Care Fund).
Potential ongoing enforcement costs, likely in the tens of
thousands annually, based on complaints for violations of
the bill's requirements by health plans (Managed Care Fund).
One-time costs of $160,000 for the adoption of regulations
by the Department of Insurance (Insurance Fund).
Ongoing costs of about $580,000 per year for review of
insurance plan advertising materials and enforcement
activities by the Department of Insurance (Insurance Fund.)
Potential minor impacts on the Medi-Cal managed care
program. In the state's Medi-Cal program, private managed
care plans provide coverage for about 5.2 million
beneficiaries. It is possible that those managed care plans
would see increased costs under the bill, to the extent that
they are doing direct to consumer marketing in non-English
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languages. It is not clear how much direct to consumer
marketing these plans perform, so the amount of translation
services required under the bill is unknown. However, even
if the bill would impose some additional administrative
costs on Medi-Cal managed care plans, those plans may not be
able to recover those costs through their managed care
contracts negotiated with the state.
Background: The Department of Managed Health Care regulates
health plans in the state. Under existing law, health plans are
required to provide marketing materials to the Department of
Managed Health Care for a 30 day review period to ensure that
the materials are not misleading. Existing law prohibits health
plans or their agents from making statements relating to
coverage that are deceptive. Existing law requires health plans
to make certain documents available in a language other than
English if the number of health plan enrollees speaking such a
language meets a certain threshold.
The Department of Insurance regulates health insurers. Existing
law prohibits insurers or their agents from misrepresenting the
terms of an insurance policy. Existing law requires insurers to
make certain documents available in a language other than
English if the number of policy holders speaking such a language
meets a certain threshold.
Proposed Law: SB 353 would require health plans and health
insurers who market in languages other than English to translate
certain documents into those languages.
Specifically, the bill would require health plans and health
insurers to translate specified documents (such as notices of
coverage and information about grievance processes) into any
language in which the health plan or health insurer markets.
(These provisions would not apply to threshold languages, since
health plans and health insurers already have translation
requirements for those languages.)
The bill would require health plans and insurers to use trained
and qualified interpreters.
The bill would prohibit health insurers from distributing
advertising materials unless the health insurer has filed the
advertising materials with the Department of Insurance and the
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Department of Insurance has not found the materials misleading
or otherwise not in compliance with the law.
Notwithstanding the above, the bill would authorize a health
insurer that has been licensed for 18 months to distribute
advertising materials without prior review by the Department of
Insurance, provided that the material has not previously been
disapproved by the Department and the health insurer files the
material with the Department.
The bill would authorize the Department of Insurance to adopt
certain implementing regulations regarding the review of
advertising materials.
Related Legislation: SB 1313 (Lieu, 2012) contained provisions
similar to those in this bill, amongst others. That bill was
held on this committee's Suspense File.
Staff Comments: The only local mandates imposed by the bill
relate to crimes or infractions and are not reimbursable by the
state under the California Constitution.