BILL ANALYSIS Ó
SB 353
Page 1
Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 353 (Lieu) - As Amended: August 5, 2013
SENATE VOTE : 26-11
SUBJECT : Health care coverage: language assistance.
SUMMARY : Requires the translation of specified documents by
trained and qualified translators when a health care service
plan, regulated by the Department of Managed Health Care (DMHC),
insurer, regulated by the California Department of Insurance
(CDI), or any other person or business markets or advertises
health insurance products in the individual or small group
markets in a non-English language that is not a threshold
language under existing law. Establishes requirements for
health insurance advertisements to be filed at the CDI that are
the same as existing requirements that apply to DMHC regulated
entities. Specifically, this bill :
1)Requires a health care service plan or insurer that advertises
or markets products in the individual or small group health
insurance markets, or allows any other person or business to
market or advertise on its behalf, in a non-English language
that does not meet the minimum enrollee thresholds established
under existing law or regulations to provide the following
documents in the same non-English language:
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
an enrollee may file a grievance; and,
e) Uniform summaries of benefits of coverage required by
the Patient Protection and Affordable Care Act (ACA) and
any rules or regulations promulgated thereunder.
2)Requires a health care service plan or insurer to use a
trained and qualified translator for all written translations
of marketing and advertising materials relating to health care
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service plan or health insurance products and for all the
documents specified in 1) above.
3)Applies 1) and 2) above to any specialized plan or insurer
that offers an essential health benefit (EHB), as defined, but
not to any specialized plan or insurer that does not offer an
EHB.
4)Prohibits a health insurer offering policies of health
insurance from publishing or distributing, or allowing to be
published or distributed on its behalf, any advertisement
unless both the following conditions are met at least 30 days
prior to the publishing or distribution, or any shorter period
as CDI may allow by regulation:
a) A true copy of the advertisement has first been filed
with CDI; and,
b) The CDI, by notice, has not found the advertisement,
wholly or in part, to be untrue, misleading, deceptive, or
otherwise not in compliance with this bill or the rules
thereunder, and has specified any deficiencies within the
30 days or any shorter time as the Insurance Commissioner
by rule or order may allow.
5)Exempts from 4) above, a health insurer that has been admitted
to transact health insurance continuously licensed for the
preceding 18 months if the insurer and material comply with
the following:
a) The advertisement or a material provision thereof has
not been previously disapproved by CDI by written notice to
the insurer and the insurer reasonably believes that the
advertisement does not violate this bill; and,
b) The insurer files a true copy of each new or materially
revised advertisement, used by it or by any person acting
on behalf of the insurer, with the CDI not later than 10
business days after publication or distribution of the
advertisement or within such additional period as the CDI
may allow by regulation.
6)Authorizes the CDI, if CDI finds that any advertisement of a
health insurer has materially failed to comply with this bill
or the rules thereunder, to by order, require the insurer to
publish, in the same medium, an approved correction or
retraction of any untrue, misleading, or deceptive statement
contained in the advertisement or any new materially revised
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advertisement without first having filed a copy thereof with
the CDI, 30 days prior to the publication or distribution
thereof, or any shorter period specified in the order.
7)Makes an order issued under 6) effective for 12 months from
its issuance and renewed if the advertisements indicate
difficulties of voluntary compliance.
8)Authorizes a health insurer, insurance agent, or other
regulated person, as specified, to within 30 days after
receipt of any notice or order under 6) file a written request
for a hearing with CDI.
9)Authorizes CDI, by regulation, to classify plans and
advertisements and exempt certain classes, from 4) and 5).
EXISTING LAW :
1)Establishes the DMHC which regulates health care service plans
under the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene), and the CDI which regulates insurers under the
Insurance Code.
2)Requires DMHC and CDI to develop and adopt regulations
establishing appropriate access to language assistance for
health care service plans. Requires every health care service
plan and specialized plan to assess the linguistic needs of
the enrollee population, as specified.
3)Requires the translation of vital documents as follows:
a) Requires a health care service plan or insurer with an
enrollment of 1 million or more to translate vital
documents into the top two languages other than English as
determined by the needs assessment as required by existing
law and any additional languages when 0.75% or 15,000 of
the enrollee population, whichever number is less,
excluding Medi-Cal enrollment and treating Healthy Families
program (HFP) enrollment separately indicates a preference
for written materials in that language;
b) Requires a health care service plan or insurer with an
enrollment of 300,000 or more but less than 1 million to
translate vital documents into the top one language other
than English as determined by the needs assessment and any
additional languages when 1% or 6,000 of the enrollee
population, whichever number is less, excluding Medi-Cal
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enrollment and treating HFP enrollment separately indicates
a preference for written materials in that language; and,
c) Requires a health care service plan or insurer with an
enrollment of less than 300,000 to translate vital
documents into a language other than English when 3,000 or
more or 5% of the enrollee population, whichever number is
less, excluding Medi-Cal enrollment and treating HFP
enrollment separately indicates a preference for written
materials in that language.
4)Specifies as vital documents that are required to be
translated all of the following:
a) Applications;
b) Consent forms;
c) Letters containing important information regarding
eligibility and participation criteria;
d) Notices pertaining to the denial, reduction,
modification, or termination of services and benefits, and
the right to file a grievance or appeal; and,
e) Notices advising LEP persons of the availability of free
language assistance and other outreach materials that are
provided to enrollees.
5)Provides that translated documents are not to include a health
care service plan's or insurer's explanation of benefits or
similar claim processing information that is sent to
enrollees, unless the document requires a response by the
enrollee or insured.
6)Provides that for those documents described in 4) above that
are not standardized but contain enrollee specific
information, the health care service plan or insurer is not
required to translate the documents into the threshold
languages identified by the needs assessment as required by 2)
above, but rather must include with the documents a written
notice of the availability of interpretation services in the
threshold languages identified by the needs assessment, as
required by 2) above. Requires the health care service plan
or insurer to have up to, but not to exceed, 21 days to comply
with the enrollee's or insured's request for a written
translation.
7)For grievances that require expedited plan review and
response, allows the health care service plan or insurer to
provide notice of the availability and access to oral
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interpretation services.
8)Requires health care service plans or insurers to advise LEP
enrollees of the availability of interpreter services.
9)Establishes standards to ensure the quality and accuracy of
the written translations and that a translated document meet
the same standards required for the English language version
of the document.
10)Requires within one year after a health care service plan's
or insurer's assessment pursuant to 2) above, the health care
service plan to report to DMHC in a format specified by DMHC,
or insurer to report to CDI in a format specified by CDI,
regarding internal policies and procedures related to cultural
appropriateness in each of the following contexts:
a) Collection of data regarding the enrollee population
pursuant to the health care service plan's or insurer's
assessment conducted in accordance with 2) above;
b) Education of health care service plan or insurer staff
who have routine contact with enrollees regarding the
diverse needs of the enrollee population;
c) Recruitment and retention efforts that encourage
workforce diversity;
d) Evaluation of the health care service plan's or
insurer's programs and services with respect to the plan's
enrollee population, using processes such as an analysis of
complaints and satisfaction survey results;
e) The periodic provision of information regarding the
ethnic diversity of the plan's or insurer's enrollee
population and any related strategies to plan providers.
Plans may use existing means of communication; and,
f) The periodic provision of educational information to
plan enrollees or insureds on the plan's or insurer's
services and programs. Plans or insurers may use existing
means of communication.
11)Prohibits a health care service plan from publishing or
distributing, or allowing to be published or distributed on
its behalf, any advertisement not subject to existing law
unless:
a) A true copy thereof has first been filed with the
director of DMHC, at least 30 days prior to any such use,
or any shorter period as the director by rule or order may
allow, and
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b) The director of DMHC by notice has not found the
advertisement, wholly or in part, to be untrue, misleading,
deceptive, or otherwise not in compliance with existing law
or the rules thereunder, and specified any deficiencies,
within the 30 days or any shorter time as the director of
DMHC by rule or order may allow.
FISCAL EFFECT : According to the Senate Appropriations
Committee, one-time costs of about $250,000 for the adoption of
regulations by DMHC (Managed Care Fund). One-time costs of
$70,000 for review of health plan contracts and other documents
by DMHC 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 this bill's requirements
by health plans (Managed Care Fund). One-time costs of $160,000
for the adoption of regulations by CDI (Insurance Fund).
Ongoing costs of about $580,000 per year for review of insurance
plan advertising materials and enforcement activities by 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 the 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.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the federal
ACA has the potential to cover 4-5 million individuals who
currently lack access to health care coverage. In the
California Health Benefit Exchange (Exchange), over 2 million
people will be eligible for subsidies to help them purchase
health insurance. The author states that consumer trust in
the establishment and operation of the Exchange is critical to
its success. The opportunities for confusion, misinformation,
and outright deception about the individual mandate, employer
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requirements, who is eligible for what type of coverage, and
other provisions of federal health reform 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 Knox-Keene 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)BACKGROUND . On March 23, 2010, the federal government enacted
the ACA. Beginning in 2014, the ACA gives states the option
to expand Medicaid eligibility and restructures the individual
and small group health insurance markets, setting minimum
standards for health coverage, requiring that individuals have
health insurance, with exceptions including financial
hardship, providing financial assistance to individuals with
income below 400% of the federal poverty level through
advanceable premium tax credits, tax credits for small
employers, the establishment of Health Benefit Exchanges and
an EHBs package required to be offered by Qualified Health
Plans (QHPs) participating in Exchanges. Beginning in 2014,
QHPs will be required to offer coverage at one of four levels:
bronze, silver, gold, or platinum. Levels will be based on a
specified share of full actuarial value of the EHBs.
California's state based Health Benefit Exchange is Covered
California, established as an independent entity in state
government, governed by a five member board of directors,
which includes California's Secretary of Health and Human
Services. An estimated 5.3 million uninsured California
residents will be eligible to purchase standardized benefit
coverage through Covered California. Of those 5.3 million,
approximately 2.6 million will be eligible for subsidized
coverage through Covered California. Another 2.7 million will
benefit from guaranteed coverage and be able to purchase
coverage through Covered California. Outreach efforts of
Covered California are geared toward educating diverse,
underserved communities about the Covered California health
insurance plans available online, over the phone, or via
in-person enrollment under the new health care reform law.
Outreach organizations will reach consumers in the following
13 languages: Arabic, Armenian, Chinese, English, Farsi,
Hmong, Khmer, Korean, Laotian, Russian, Spanish, Tagalog, and
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Vietnamese. Because of ACA requirements on health insurers to
issue policies to any willing purchasers, millions of people
of diverse backgrounds will also be able to purchase insurance
in the commercial health insurance market outside of the
Exchange.
Current law requires translation of vital documents if
enrollment of non-English speakers reaches certain threshold
amounts and requires notice of access to translation services
in certain circumstances. This bill is intended to supplement
these requirements by including marketing and advertising
materials in languages that don't meet these thresholds and is
primarily intended to ensure that LEP individuals receive
accurate information about the requirements of the ACA and the
availability of additional translation and interpretation
services.
3)SUPPORT . Health Access California (HAC) writes in support
that this bill extends the prior approval of marketing
materials for health insurers using the same statutory
language that has been in place since 1975 for health plans.
Supporters, including ACT for Women and Girls, American
Federation of State, County and Municipal Employees,
California Black Health Network, and Children's Partnership
all write that as implementation of the ACA gains momentum, it
is vital that our health care system meets the needs of
California's diverse communities; communities of color will
comprise 66% of Californians eligible for subsidies and 40%
will speak English less than well. Of major concern to
sponsors of this bill, the California Immigrant Policy Center,
HAC, and California Pan-Ethnic Health Network is the
vulnerability of immigrants and LEP individuals to deceptive
marketing practices, their unfamiliarity with the health
insurance system, and likely confusion about the individual
mandate and eligibility rules. The sponsors add that this
bill requires a health plan or insurer that markets in a
language other than English to provide a list of materials in
that language so that the consumer choosing coverage knows
what he or she is buying, even if he or she speaks a language
other than English.
4)OPPOSITION . The California Chamber of Commerce writes in
opposition that this bill would require plans to translate
letters, notices, enrollment applications, grievance
information, and summaries of benefits into languages that are
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spoken only by a minority of a plan's membership simply
because the plan attempted to reach these new communities in
their own language. The Association of California Life and
Health Insurance Companies (ACLHIC), also in opposition,
states that this bill would establish a completely new
prior-approval regulatory scheme for marketing materials and
would prohibit an insurer from utilizing any advertisement or
solicitation unless it is filed with, and ultimately approved,
by CDI. The California Association of Health Plans (CAHP) and
ACLHIC, in their opposition, argue that this bill could have
the unintended consequence of lessening outreach to
underserved communities because these requirements would not
only drastically increase marketing and advertising costs to
underserved communities, but would create delays in getting
these materials approved and add significant workload to CDI.
ACLHIC and CAHP explain that their members already routinely
provide interpreter services upon request, either by phone or
in writing, for individuals who speak languages beyond
threshold languages. The California Association of Dental
Plans (CADP) is opposed to the inclusion of specialized plans
offering EHBs. CADP believes this would have a chilling
effect on outreach efforts to underserved communities.
5)RELATED LEGISLATION .
a) AB 505 (Nazarian) requires DHCS to require all Medi-Cal
managed care plans to provide language assistance services
to LEP Medi-Cal beneficiaries who are mandatorily enrolled
in managed care by requiring interpretation services to be
provided in any language on a 24-hour basis at key points
of contact, and requiring oral translation services to be
provided to the language groups identified by DHCS meeting
specified numeric thresholds. AB 505 is pending in the
Senate.
b) AB 1263 (John A. Pérez) establishes the Medi-Cal Patient
Centered Communication (CommuniCal) program at DHCS to
provide and reimburse for certified medical interpretation
services to LEP Medi-Cal enrollees. Establishes a
certification process and registry of CommuniCal certified
medical interpreters at the California Department of Human
Resources and grants CommuniCal certified medical
interpreters' collective bargaining rights with the state.
AB 1263 is pending in the Senate Appropriations Committee.
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6)PREVIOUS LEGISLATION .
a) SB 1313 (Lieu) would have made several changes to
existing marketing and advertising rules for health plans,
insurers, solicitors, brokers, and agents. SB 1313 was
held under submission in the Senate Appropriations
Committee.
b) SB 853 (Escutia), Chapter 713, Statutes of 2003,
required DMHC and CDI to adopt, not later than January 1,
2006, regulations establishing standards and requirements
to provide health care service plan enrollees and insureds
with access to language assistance in obtaining health care
services.
c) SB 900 (Alquist), Chapter 659, and AB 1602 (John A.
Pérez), Chapter 655, Statutes of 2010, established the
Exchange.
d) SB 1273 (Scott), Chapter 730, Statutes 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
increased 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.
REGISTERED SUPPORT / OPPOSITION :
Support
California Immigrant Policy Center (cosponsor)
California Pan-Ethnic Health Network (cosponsor)
Health Access California (cosponsor)
AARP California
ACT for Women and Girls
American Association of University Women-Chula Vista
American Cancer Society Cancer Action Network
American Diabetes Association
American Federation of State, County and Municipal Employees,
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AFL-CIO
APAIT Health Center
Asian Americans for Civil Rights & Equality
Asian Pacific American Legal Center
California Black Health Network
California Communities United Institute
California Coverage and Health Initiatives
California Health Advocates
California Rural Legal Assistance Foundation
California School Employees Association
Cal-Islanders Humanitarian Association
Children's Partnership
Coalition for Humane Immigrant Rights of Los Angeles
Consumers Union
Earth Mama Healing, Inc.
Families in Good Health, St. Mary Medical Center
Greenling Institute
Guam Communication Network
Having Our Say!
Latino Coalition for a Healthy California
National Association of Social Workers
Street Level Health Project
Union of Pan Asian Communities
United Nurses Association of California/Union of Health Care
Professionals
Vision y Compromiso
Numerous individuals
Opposition
Association of California Life & Health Insurance Companies
California Association of Dental Plans
California Association of Health Plans
California Chamber of Commerce
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097