BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 353
          Author:   Lieu (D)
          Amended:  4/16/13
          Vote:     21

           
           SENATE HEALTH COMMITTEE  :  7-2, 4/10/13
          AYES:  Hernandez, Beall, De León, DeSaulnier, Monning, Pavley,  
            Wolk
          NOES:  Anderson, Nielsen

           SENATE APPROPRIATIONS COMMITTEE  :  5 -2, 5/23/13
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NOES:  Walters, Gaines


           SUBJECT  :    Health care coverage:  language assistance

           SOURCE :     California Immigrant Policy Center 
                      California Pan-Ethnic Health Network 
                      Health Access California 


           DIGEST  :    This bill requires health plans and health insurers  
          (collectively referred to as carriers) that advertise, market,  
          or allow others to market or advertise on their behalf, in a  
          language other than English, 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.

           ANALYSIS  :    Existing law:

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          1. Prohibits a health plan from publishing or distributing an  
             advertisement unless a copy thereof has first been filed with  
             the Director of the Department of Managed Health Care (DMHC)  
             at least 30 days prior to that use and the Director has not  
             found the advertisement to be untrue, misleading, deceptive,  
             or in violation of the Knox-Keene Act (Act) within those 30  
             days.

          2. Authorizes the Director 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 Act.

          3. Authorizes the Director to exempt a health plan or an  
             advertisement from the requirements described above.

          4. 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. 

          5. Permits, under the Act, the Director 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.

          6. 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 Commissioner of the Department of Insurance  
             (CDI), as defined. 

          7. 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  

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             misleading, and which is known, or should be known, to be  
             untrue, deceptive, or misleading.

          8. Requires each insurer to the extent required by the  
             Commissioner of the CDI, to file with copies of all printed  
             advertising the insurer proposes to disseminate in the state.

          9. 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. 
           
          10.Requires carriers to translate specified 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.  

          11.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, markets, or allows others  
             to market or advertise on its behalf, 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 for enrollment and any information  
                pertinent to eligibility or participation;

             C.    Notices advising limited-English-proficient (LEP)  
                persons of the availability of no-cost translation and  
                interpretation services;

             D.    Notices pertaining to the right and instructions on how  
                to file a grievance; and

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             E.    Uniform summaries of benefits of coverage.

          2. 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.

          3. Prohibits an insurer from publishing or distributing, or  
             allowing to be published or distributed on its behalf, any  
             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, and has specified any deficiencies within 30  
                days.

          4. Allows an insurer that has been continuously licensed for the  
             preceding 18 months to publish or distribute, or allows 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. 

          5. Authorizes CDI to require the insurer to publish an approved  
             correction or retraction of any untrue, misleading, or  
             deceptive statement contained in the advertising.  

          6. Authorizes a health insurer, insurance agent, or other person  
             to file a written request for a hearing with CDI within 30  

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             days after receipt of any notice or order.

          7. 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.

           Background
           
          On March 23, 2010, President Obama signed the Patient Protection  
          Affordability Act (ACA).  Among other provisions, the 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.  As a result of implementation of  
          the ACA, it is estimated that three to seven million  
          Californians will be newly eligible for health insurance  
          starting in 2014.

           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. 

          Health plans are required to place a notice of the availability  
          of language assistance services on all English versions of 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.   

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          Health plans are required to provide interpretation services for  
          any language requested by an enrollee, irrespective of whether  
          the language is identified as one of the plan's threshold  
          languages.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee:

             One-time costs of about $250,000 for the adoption of  
             regulations by the DMHC (Managed Care Fund).

             One-time costs of $70,000 for review of health plan  
             contracts and other documents by the DMHC to ensure that  
             health plan policies comply with this bill's requirements  
             (Managed Care Fund).

             Potential ongoing enforcement costs, likely in the tens of  
             thousands annually, based on complaints for violations of  
             this bill's requirements by health plans (Managed Care Fund).

             One-time costs of $160,000 for the adoption of regulations  
             by the CDI (Insurance Fund). 

             Ongoing costs of about $580,000 per year for review of  
             insurance plan advertising materials and enforcement  
             activities by the CDI (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 this bill, to the extent that  
             they are doing direct to consumer marketing in non-English  
             languages.  It is not clear how much direct to consumer  
             marketing these plans perform, so the amount of translation  
             services required under this bill is unknown.  However, even  
             if this 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.

           SUPPORT  :   (Verified  5/23/13)

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          California Immigrant Policy Center (co-source)
          California Pan-Ethnic Health Network (co-source)
          Health Access California (co-source)
          ACT for Women and Girls 
          AFSCME 
          American Cancer Society Cancer Action Network 
          Asian Americans for Civil Rights and Equality 
          Asian Pacific American Legal Center 
          California Black Health Network 
          California Communities United Institute 
          California Coverage and Health Initiatives 
          California Rural Legal Assistance Foundation
          California School Employees Association 
          Cal-Islanders Humanitarian Association 
          Children's Partnership
          Consumers Union 
          Earth Mama Healing, Inc. 
          Greenling Institute 
          Guam Communication Network 
          Street Level Health Project 
          United Nurses Association of California/Union of Health Care  
          Professionals 

           OPPOSITION  :    (Verified  5/23/13)

          Association of California Life and Health Insurance Companies 
          California Association of Health Plans 
          California Chamber of Commerce

           ARGUMENTS IN SUPPORT  :    This bill's sponsor, Health Access  
          California (HAC), writes that the Act provides numerous  
          protections for consumers enrolled in managed care plans  
          regulated by DMHC.  HAC argues this bill extends prior approval  
          of marketing materials for health coverage to the Insurance  
          Code, and that this bill is needed to counter the flood of  
          misinformation about the ACA, its benefits and requirements.   
          The California Immigrant Policy Center writes that this bill  
          strengthens consumer protections for new health care enrollees  
          and protects them against potential fraudulent or deceptive  
          marketing practices.  The California Pan-Ethnic Health Network  
          (CPEHN) writes that this bill seeks to build consumers' trust in  
          the system by strengthening consumer protections and closing  
          gaps in the current law.  CPEHN states that this bill protects  

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          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.

           ARGUMENTS IN OPPOSITION  :    The California Association of Health  
          Plans (CAHP) writes that this 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.  
           

          JL:k  5/25/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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