BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 509| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 509 Author: DeSaulnier (D) and Emmerson (D) Amended: 5/24/13 Vote: 27 - Urgency SENATE HEALTH COMMITTEE : 8-0, 5/8/13 AYES: Hernandez, Anderson, Beall, De León, DeSaulnier, Monning, Nielsen, Pavley NO VOTE RECORDED: Wolk SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13 AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg SUBJECT : California Health Benefit Exchange: background checks SOURCE : Author DIGEST : This bill (1) requires the California Health Benefits Exchange (known as Covered California) to submit to the Department of Justice (DOJ), fingerprint images and related information of employees, prospective employees, contractors, subcontractors, volunteers, or vendors for the purposes of obtaining criminal history information; (2) requires Covered California to require any services contract, interagency agreement, or public entity agreement to require the same background check information from their contractors and contractor's employees; (3) requires the DOJ to forward to the Federal Bureau of Investigation (FBI) requests for federal summary criminal history information, and requires the DOJ to CONTINUED SB 509 Page 2 review the information returned from the FBI and to compile and disseminate a response to the board; and requires the DOJ to charge a fee sufficient to cover the costs of processing these requests. ANALYSIS : Existing law: 1.Establishes Covered California in state government, which is governed by the California Health Benefits Exchange Board composed of five members. 2.Requires, under federal law, Covered California to make available Qualified Health Plans (QHPs) to qualified individuals and qualified employers. 3.Requires Covered California to inform individuals of eligibility requirements for the Medi-Cal program, the Healthy Families Program (HFP), or any applicable state or local public program. Requires Covered California to enroll individuals in any such program if it is determined that such an individual is eligible. 4.Permits Covered California to adopt rules and regulations, as necessary, in accordance with the Administrative Procedure Act until January 1, 2016. 5.Requires, under federal law, any person who receives information provided by an applicant or from a federal agency, to use the information only for the purposes of ensuring the efficient operation of Covered California, as specified. 6.Makes any person authorized to receive state summary criminal history information, who knowingly furnishes the information to a person who is not authorized, guilty of a misdemeanor. This bill: 1.Requires Covered California executive board (board) to require and submit to the DOJ fingerprint images and related information of all employees, prospective employees, contractors, subcontractors, volunteers, or vendors for the purposes of obtaining information as to the following CONTINUED SB 509 Page 3 information: A. The existence and content of a record of state or federal convictions; and, B. The existence and content of a record of state or federal arrests for which the DOJ establishes that the person is free on bail or released on his/her own recognizance pending trial or appeal. 2.Requires the board to require any services contract, interagency agreement, or public entity agreement to require the same previously mentioned background check information from their contractors and contractor's employees. 3.Requires the DOJ to forward to FBI requests for federal summary criminal history information received. Requires the DOJ to review the information returned from the FBI and compile and disseminate a response to Covered California. 4.Requires the DOJ to provide to Covered California, on individuals who were initially subject to a criminal history information check, subsequent conviction and arrest information for individuals awaiting trial that are incarcerated, released on bail, or released on their own recognizance pending trial. Requires Covered California to request from the DOJ this subsequent notification service. 5.Requires the DOJ to charge a fee sufficient to cover the cost of processing requests under this bill. 6.Contains an urgency clause that makes this bill effective upon enactment. Background Covered California. Covered California indicates the requirement for a fingerprint check against federal and state arrest comes from the federal Minimum Acceptable Risk Standards for Exchanges (MARS-E) Personnel Screening Requirements. MARS-E requires organizations to screen individuals prior to authorizing access to information systems, and rescreen individuals periodically, consistent with the criticality/sensitivity rating of the position. To meet these MARS-E requirements, Covered California CONTINUED SB 509 Page 4 must perform a criminal history check for all persons prior to employment and, require appropriate personnel to obtain and hold a moderate-risk security clearance as defined in the federal personnel security/suitability handbook. Differing requirements for agents, state health insurance programs, and eligibility entities . The Managed Risk Medical Insurance Board (MRMIB), which administers the HFP, the Access for Infants and Mothers Program (AIM), the Major Risk Medical Insurance Program and the federal Pre-Existing Condition Insurance Program (PCIP), does not require its employees to undergo fingerprinting or a criminal background check. However, Maximus, which performs eligibility determinations for MRMIB's HFP, AIM and PCIP, states if performs a national criminal background check on all of its employees, but does not require them to be fingerprinted. DHCS' Medi-Cal Eligibility Division indicates its state Medi-Cal employees are neither fingerprinted nor do they undergo a criminal background check. Counties must conduct a background screening of a county worker before a county worker may access personal identifying information. This screening requirement does not specifically require fingerprinting and a criminal background check, though counties have policies that include those requirements. The Insurance Commissioner is authorized to require the fingerprints on applications for any, some, or all of the licenses issued under the Insurance Code, and to require authenticated fingerprints. Equal Employment Opportunity Enforcement (EEOC) Guidance . In April 2012, the EEOC published "Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964" regarding the use of arrest or conviction records in employment decisions under Title VII of the Civil Rights Act of 1964 (Title VII). The EEOC Guidance states that an employer's use of an individual's criminal history in making employment decisions, may, in some instances, violate the prohibition against employment discrimination under Title VII. Fingerprinting process background . According to the DOJ, approximately 35,000 entities perform background checks through CONTINUED SB 509 Page 5 the DOJ's Bureau of Criminal Information and Analysis. Individuals who are required to be fingerprinted must fill out a one page form (typically provided by their employer) entitled "Request for Live Scan Service" that asks for information about the individual's name, date of birth, gender, height, weight, place of birth, address, and Social Security number. The rolling of the individual's fingerprints must be done by a certified Live Scan operator. Once submitted to the DOJ by the Live Scan operator, the fingerprints are searched against all arrest fingerprint images submitted to and maintained by the DOJ from California law enforcement agencies. The applicant's fingerprints are retained and are searched against all new arrest fingerprint images. Biometric matches result in subsequent notification to the affected response agency, generally within 48 to 72 hours. Prior Legislation SB 900 (Alquist, Chapter 659, Statutes of 2010), establishes Covered California as an independent public entity within state government, and requires Covered California to be governed by a board composed of the Secretary of California Health and Human Services Agency, or his/her designee, and four other members appointed by the Governor and the Legislature who meet specified criteria. AB 1602 (John A. Pérez, Chapter 655, Statutes of 2010), specifies the powers and duties of Covered California relative to determining eligibility for enrollment in the Covered California, and requires Covered Coverage to arrange for coverage throughQHPs. AB 2343 (Torres, Chapter 256, Statutes of 2012), requires that, when state or federal summary criminal history information is furnished, the authorized agency, organization, or individual furnish a copy of the information to the person to whom the information relates if the information is a basis for an adverse employment, licensing, or certification decision. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: CONTINUED SB 509 Page 6 One-time costs of about $60,000 and ongoing costs of about $40,000 to perform background checks on Health Benefit Exchange employees (federal funds). One-time costs of about $1.2 million to perform background checks for volunteer "assistors" (federal funds). SUPPORT : (Verified 5/23/13) Independent Insurance Agents and Brokers of California ARGUMENTS IN SUPPORT : According to the author's office: Recently-released federal privacy and security guidelines require state exchanges to perform criminal background checks on any personnel or potential personnel whose duties include, or would include, having access to personal health or financial information for exchange applicants and enrollees. The author's office states that, Covered California has determined that these requirements apply broadly to employees, prospective employees, contractors, subcontractors, volunteers and vendors who will have access to personal information for Covered California applicants and enrollees. Federal guidance requires that Covered California protect and safeguard customers from unauthorized and illegal access to or disclosure of this information. In a letter explaining the provisions of this bill, Covered California indicates it has determined the most comprehensive way to meet the federal MARS-E requirements is to conduct fingerprint-based background checks. To CONTINUED SB 509 Page 7 implement this policy, Covered California states that DOJ requires clear statutory authority to allow Covered California to request and to receive criminal history information from DOJ and the FBI. Covered California states this bill provides the statutory authority that will allow it to perform fingerprint-based background checks prior to the employment of state service center employees and community-based assisters. The California Coverage and Health Initiatives, writes in support that the January 1, 2014 date for Covered California to be open to the public is only seven months away and with open enrollment beginning in October, it is crucial that the training and hiring of employees, navigators, and assisters begin immediately in order to maximize enrollment and guarantee not only coverage but the success of Covered California. JL:ejd 5/25/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED