BILL ANALYSIS �
SB 509
Page 1
SENATE THIRD READING
SB 509 (DeSaulnier and Emmerson)
As Amended May 24, 2013
2/3 vote. Urgency
SENATE VOTE :39-0
HEALTH 18-0 APPROPRIATIONS 14-0
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|Ayes:|Pan, Logue, Ammiano, |Ayes:|Gatto, Harkey, Bigelow, |
| |Atkins, Bonilla, Bonta, | |Bocanegra, Ian Calderon, |
| |Chesbro, Gomez, Roger | |Campos, Eggman, Gomez, |
| |Hern�ndez, Lowenthal, | |Hall, Linder, Pan, Quirk, |
| |Maienschein, Mansoor, | |Wagner, Weber |
| |Nazarian, Nestande, V. | | |
| |Manuel P�rez, Wagner, | | |
| |Wieckowski, Wilk | | |
| | | | |
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SUMMARY : Requires the Executive Board (Board) of the California
Health Benefit Exchange (Exchange), known as Covered California,
to require fingerprint images and related information of all
employees, prospective employees, contractors, subcontractors,
volunteers, or vendors whose duties include or would include
access to confidential information, personal identifying
information (PII), personal health information (PHI), federal
tax information (FTI), financial information, as required by
federal law or guidance, for the purposes of obtaining
information of the existence and content of a record of state or
federal criminal history and information as to the existence and
content of pending state or federal arrests, as specified.
Contains an urgency clause in order to become effective
immediately upon enactment.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
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
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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 : According to the author, in order to provide
eligibility and enrollment assistance, the Exchange service
center employees, as well as assisters who provide in-person
assistance will need to ask consumers for a variety of highly
sensitive and confidential personal information. This includes
an enrollees' name, address, contact information, Social
Security Number (SSN), employer, annual income, number of
dependents, and more. To receive the authorization from the
federal government to operate a state-based exchange, federal
guidelines require state exchanges to perform criminal history
checks prior to hiring any person whose position will have
access to the PII and FTI of Exchange applicants and enrollees.
Based on federal guidance, Covered California has determined the
Exchange must meet Minimum Acceptable Risk Standards for
Exchanges (MARS-E), one of three on Exchange privacy and
security standards. According to documents provided by Covered
California, the MARS-E requires all individuals associated with
the Exchange who would have access to sensitive information such
as PII, PHI, and FTI to be screened before they may be
authorized to obtain access to the information system and
devices containing such information. To meet these
requirements, Covered California must perform a background check
for all persons prior to authorizing access and require
appropriate personnel to obtain and hold a moderate-risk
security clearance as defined in the federal Department of
Health and Human Services Personnel Security/Suitability
Handbook. The MARS-E also requires periodic rescreening of
individuals, consistent with the criticality or sensitivity
rating of the position. Furthermore, according to Covered
California, the Internal Revenue Service Publication 1075, Tax
Information Security Guidelines requires screening and
consideration of an individual's background and security
clearance when designating personnel who are authorized to
access FTI.
The Board and staff have determined that Covered California must
have explicit statutory authority in order to receive criminal
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record information from the Department of Justice (DOJ) and the
Federal Bureau of Investigation, and subsequent criminal arrest
and conviction information from DOJ. Covered California will
then promulgate emergency regulations to further specify
background check requirements including disqualifying crimes and
affected positions. At the May 23, 2013, Board meeting, the
Board approved for submission to the Office of Administrative
Law, Draft Covered California Fingerprinting Implementation
Regulations (Draft Regulations), to require fingerprint images
and associated criminal history information from individuals
whose duties include or would include any of the following: 1)
access to FTI; 2) access to PII; 3) access to PHI; 4) access to
confidential or sensitive information provided by a member of
the public including, but not limited to, a credit card account
number or SSN; 5) access to cash, checks, or other forms of
payment and accountable items; 6) responsibility for the
development or maintenance of the California Healthcare
Eligibility, Enrollment, and Retention System and other critical
automated systems of the Exchange; or 7) access to information
technology systems of the Exchange. The Draft Regulations
further provide that if the state or federal level criminal
records contain a conviction of a felony, misdemeanor, or
pending criminal charge related to a crime of moral turpitude
that is substantially related to the qualifications, functions,
or duties of the specific employment sought by the applicant or
employee, it shall be justification for denial to an individual
to serve in an Exchange role that requires fingerprinting.
Covered California is also in the process of establishing an
Assisters Program that will include assister enrollment entities
(AEE) and individual entities. AEEs are entities and
organizations eligible to be trained and registered to provide
in-person assistance to consumers and help them apply for
Covered California programs, particularly entities that have
access to Covered California's targeted population. Individual
AEEs are employed, trained, certified, and linked to AEEs to
provide in-person assistance to consumers and help them apply
for Covered California programs and are individuals who can
provide assistance in a culturally and linguistically
appropriate manner to consumers. The proposed compensation for
AEEs is $58.00 per new enrollment into Covered California,
including a person who was a modified adjusted gross
income-eligible Medi-Cal enrollee but upon redetermination
qualifies for Covered California and when a currently enrolled
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person adds a new dependent. Compensation for annual renewal is
$25.00. The funding source for the initial application is the
federal funding from the Level II Establishment Federal Grant
and renewals will be funded as operating costs from
self-sustainability funds. There is no compensation for an
enrollment into Medi-Cal. The Board is expected to address
Draft Regulations regarding AEE fingerprinting and records
checks at the June 20, 2013, meeting. The Draft Regulations
applying to AEEs will provide for notification to the applicant
of disqualifying information and allow for an appeal. These
Draft Regulations will also provide for an opportunity to
correct inaccurate or incomplete information and request a new
determination of fitness for employment.
The California Association of Health Plans has raised some
concerns regarding the breadth of the requirement that applies
to contractors and have asked for clarifying amendments to
ensure that it is not interpreted to apply to their contracting
providers or employees that process claims. AB 1428 (Conway) of
this legislative year, is an urgency bill that enacts this
clarification, as there was a concern that amending this bill
would delay the Exchange's ability to start hiring call center
staff.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
FN: 0001111