BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 353| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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: CONTINUED SB 353 Page 2 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 CONTINUED SB 353 Page 3 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 CONTINUED SB 353 Page 4 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 CONTINUED SB 353 Page 5 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. CONTINUED SB 353 Page 6 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) CONTINUED SB 353 Page 7 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 CONTINUED SB 353 Page 8 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 **** END **** CONTINUED