BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 509
                                                                  Page  1

          Date of Hearing:   June 10, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   SB 509 (DeSaulnier) - As Amended:  May 24, 2013 

          Policy Committee:                             HealthVote:18-0

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill requires the California Health Benefit Exchange (known  
          as Covered California) to submit fingerprint images and related  
          information regarding all employees, contractors,  
          subcontractors, volunteers, or vendors whose duties include  
          access to confidential information, as specified, for the  
          purposes of obtaining information about state or federal  
          criminal history and information about state or federal arrests  
          for which the person is free pending trial or appeal.   
           
          FISCAL EFFECT  

          1)About $60,000 costs for 2013, which includes background checks  
            of approximately 900 Covered California employees, and ongoing  
            annual costs of approximately $38,000.

          2)About $1.2 million for assister background checks during the  
            first year of operation, and unknown but significantly  
            decreasing ongoing costs.

          3)Federal grant money received by Covered California is expected  
            to cover these costs for employees and assisters through  
            December 2014.

           COMMENTS  

           1)Rationale  .  Ongoing efforts to prepare for full implementation  
            of the federal Affordable Care Act (ACA) on January 1, 2014  
            include opening Covered California on October 1 of this year  
            to begin marketing health coverage.  Covered California has  
            selected call center sites in Fresno and Rancho Cordova, and  
            wants to begin hiring employees but cannot do so until it is  








                                                                  SB 509
                                                                  Page  2

            able to comply with recent federal privacy and security  
            guidelines.  These guidelines require state health exchanges  
            to perform background checks on personnel whose duties include  
            access to personal health or financial information for  
            Exchange applicants and enrollees.  This bill establishes the  
            background check process.  

           2)Who pays  ?  An individual background check costs approximately  
            $65.  This breaks down to fixed processing fees of $32  
            (Department of Justice) and $17 (Federal Bureau of  
            Investigation) plus a fingerprint rolling fee, which varies by  
            vendor and is the actual Live Scan digital imaging of a  
            person's fingerprint.  Covered California intends to pay for  
            background checks of employees and prospective employees, as  
            well as those of almost 17,800 assisters who are selected and  
            trained according to a specific program that will provide  
            in-person assistance to consumers and help them apply for  
            Covered California programs.  Federal funding from grant money  
            already received by Covered California is expected to be used  
            for this purpose.

            With respect to contractors, this bill requires agreements to  
            include a provision requiring a contractor to agree to  
            background checks on all of its employees, contractors and  
            agents with access to the type of sensitive information  
            covered by the federal privacy and security guidelines.

           3)Related legislation  .  AB 1428 (Conway) is intended as a  
            companion measure to this bill.  As amended and passed by the  
            Assembly Health Committee on June 4, 2013, AB 1428 makes  
            clarifying changes to this bill's provisions, including the  
            addition of a federal citation for the background check  
            requirements.  

           Analysis Prepared by  :    Debra Roth / APPR. / (916) 319-2081