BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1034 (Monning) - Health care coverage: waiting periods.
Amended: April 21, 2014 Policy Vote: Health 8-0
Urgency: No Mandate: Yes
Hearing Date: April 28, 2014
Consultant: Brendan McCarthy
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: SB 1034 would prohibit health plans and health
insurers from imposing waiting periods in the group health
market.
Fiscal Impact:
Costs of about $120,000 in 2014-15, $70,000 in 2015-16, and
about $30,000 per year thereafter by the Department of
Managed Health Care to review compliance by health plans and
take enforcement actions (Managed Care Fund).
Minor costs to review health insurer filings to ensure
compliance by the Department of Insurance (Insurance Fund).
Background: Under current law, health insurers are regulated by
the Department of Insurance and health plans are regulated by
the Department of Managed Health Care (collectively referred to
as "carriers).
The federal Affordable Care Act, and implementing legislation
enacted in California, makes a variety of changes to the
individual and group health insurance market. Changes to the
market include a requirement for "guaranteed issue" of coverage
if premiums are paid, a prohibition on denials of coverage for
preexisting conditions, and many other regulatory requirements.
The Affordable Care Act authorizes employers or carriers to
impose a waiting period up to 90 days before coverage goes into
effect (during this time, an employee would be enrolled in a
plan, but would not pay premiums and would not be eligible for
services). Current state law authorizes carriers in the group
market to impose waiting periods of up to 60 days. Carriers in
SB 1034 (Monning)
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the individual market are prohibited from imposing waiting
periods.
Proposed Law: SB 1034 would prohibit carriers from imposing
waiting periods in the group health market.
Related Legislation: SB 959 (Hernandez) contains numerous
clarifying and technical corrections to the Affordable Care Act
implementing legislation. That bill will be heard in this
committee.
Staff Comments: Federal law continues to allow employers as well
as carriers from imposing waiting periods before health coverage
becomes effective. This bill would prohibit carriers from
imposing waiting periods. However, the bill does not prohibit an
employer from imposing a waiting period, which could then
implemented by the contracting carrier.
The only costs that may be incurred by a local agency under the
bill relate to crimes and infractions. Under the California
Constitution, such costs are not reimbursable by the state.