BILL ANALYSIS Ó
AB 845
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Date of Hearing: April 14, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
AB 845
(Cooley) - As Introduced February 26, 2015
SUBJECT: Health care coverage: vision care.
SUMMARY: Authorizes the executive board (board) of the
California Health Benefit Exchange (Exchange) to establish a
Website to inform consumers about participating individual and
employer-based vision plans that are available to qualified
individuals and employers. Specifically, this bill:
1)Authorizes the board of the Exchange, referred to as Covered
California, to construct, manage, and maintain a Website that
is separate and clearly distinct from the Exchange Website, to
inform consumers about participating individual and
employer-based vision plans that are available to qualified
individuals and employers.
2)Authorizes the board to receive funds from providers of
ancillary vision care products and any other nongovernmental
source for the purpose of the Website.
3)Prohibits federal funds, user fees, and other assessments
imposed for the purposes of the Exchange from being used for
the purpose of the Website, and other federal and state funds
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are not to be comingled with funds made available for the
Website.
4)Requires the Website to offer full and complete carrier
information to consumers and allow enrollees and prospective
enrollees to obtain standardized comparative information on
the participating vision plans. Specifies that if the Website
contains a telephone number, that the number be different from
number used to receive information regarding products offered
through the Exchange.
5)Requires the Website to provide:
a) An explanation of the types of coverage offered;
b) A statement that the vision plan is a separate legally
distinct entity from the Exchange;
c) A statement that enrollment in a vision plan does not
constitute enrollment in a qualified health plan (QHP) or
enrollment through the Exchange; and,
d) A statement that advance payment of premium tax credit
and cost-sharing reductions are not available for a vision
plan.
EXISTING LAW:
1)Requires, under the Patient Protection and Affordable Care Act
(ACA), each state, by January 1, 2014, to establish a health
benefit exchange that makes QHPs available to qualified
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individuals and qualified employers, or, if a state chooses
not to establish an exchange, requires the federal government
to establish one for the state. Federal law establishes
requirements for an exchange, for health plans participating
in an exchange, and who is eligible to receive coverage in the
exchange.
2)Establishes in state government the Exchange as an independent
public entity not affiliated with an agency or department.
Requires the Exchange to compare and make available through
selective contracting health insurance for individual and
small business purchasers as authorized under the ACA.
3)Under federal law, establishes requirements for health plans
offered through state exchanges, including that the plan
provides essential health benefits (EHBs) and follows
established limits on cost-sharing (deductibles, copayments,
and out-of-pocket maximum amounts).
4)Establishes as California's EHBs the Kaiser Small Group Health
Maintenance Organization plan along with the following 10 ACA
mandated benefits: a) ambulatory patient services; b)
emergency services; c) hospitalization; d) maternity and
newborn care; e) mental health and substance use disorder
services, including behavioral health treatment; f)
prescription drugs; g) rehabilitative and habilitative
services and devices; h) laboratory services; i) preventive
and wellness services and chronic disease management; and, j)
pediatric services, including oral and vision care.
5)Establishes the Exchange SHOP (the Small Business Health
Options Program), separate from activities of the Exchange
board related to the individual market, to assist qualified
small employers in facilitating the enrollment of their
employees in QHPs offered through the Exchange in the small
employer market in a manner consistent with the ACA.
6)Exempts specialized health plans, which include vision plans,
from a number of requirements that apply more broadly to
health plans.
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FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, this bill will
provide California consumers the opportunity to shop for
adult, individual vision care. The author states that Covered
California currently offers pediatric-only vision benefits,
and adult consumers do not have access to affordable vision
coverage when purchasing a health plan through Covered
California. The author states that vision is a critical part
of everyday life, with the added preventative benefit that
routine eye exams can disclose many serious underlying health
conditions. The author concludes that this bill is about
access, and without it, Covered California consumers will not
have access to a single competitive platform to purchase
affordable, stand-alone, adult vision coverage.
2)BACKGROUND. Under the ACA, individuals are required to
maintain health insurance or pay a penalty, with exceptions
for financial hardship, religion, incarceration, and
immigration status. The ACA also includes several insurance
market reforms, such as prohibitions against health insurers
imposing preexisting health condition exclusions and a
requirement that health plans and insurers offer EHBs in the
individual and small group markets.
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The ACA allows each state to establish its own exchange to offer
individual and small group coverage. California's state
exchange is Covered California, which is an independent
government entity with a five-member board of directors.
Individuals with income under 400% of the federal poverty
level, provided certain conditions are met, can receive a
subsidy in the form of a refundable tax credit toward the
purchase of an Exchange plan. The payment goes directly to
the insurer and reduces the premium liability for that
individual. For some products in the Exchange, individuals
who are eligible for a tax subsidy are also be eligible for
assistance in paying cost-sharing for their health services.
Federal subsidies are only available for Exchange plans.
All Exchange plans must cover the EHBs. Under the ACA,
pediatric vision care is included in the EHBs, while adult
vision care is considered a supplemental benefit.
3)VISION PLANS AND THE EXCHANGE. On October 25, 2012, the
Exchange Board adopted a policy to offer supplemental dental
and vision benefits in the individual and SHOP exchanges. The
Exchange, in a letter to the Centers for Medicaid and Medicare
Services, Center for Consumer Information and Insurance
Oversight (CCIIO), advised CCIIO of its intention offer
stand-alone vision and requested federal guidance about
offering these benefits. The letter noted that stand-alone
vision plans may increase the likelihood of utilization and
provide greater emphasis on preventive care, and stated that
offering stand-alone vision plans would bolster the consumer
friendliness of the Exchange.
On April 5, 2013, CCIIO published a list of "Frequently Asked
Questions (FAQ) on Reuse of Exchange for Ancillary Products."
The FAQ indicates that stand-alone vision plans and other
ancillary insurance products such as disability or life
insurance products cannot be offered in or through an
Exchange: "An Exchange only may offer QHPs, including
stand-alone dental plans, to qualified individuals and
qualified employers... However, ancillary insurance products,
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which are not QHPs, may be offered by separate state programs
that share resources and infrastructure with a State-based
Exchange."
The FAQ also indicates that Exchange Websites may provide basic
information on vision and ancillary insurance products, and
that, if this information is provided, it must indicate that
the vision and ancillary insurance products are not QHPs and
advance payment of premium tax credits and cost-sharing
reductions are not available for these products. The FAQ
advises that it would be acceptable, for example, for vision
and ancillary products to be listed on an Exchange Website,
along with the disclaimer about non-QHP status and
unavailability of subsidies, with consumers having the ability
to add the product to a shopping basket along with QHPs.
The FAQ provides conditions that must be met if Exchange
resources are used to offer non-QHP ancillary plans: the
agency or program facilitating the coverage must be legally
and publicly distinct from the Exchange, and no federal funds
or Exchange user fees or assessments may be used to support
non-Exchange activities. To the extent that an Exchange
resource is used to offer non-Exchange products, the FAQ
indicates that the cost of using the resource must be paid by
the other, non-Exchange state program.
In response to the Federal guidance, the Exchange was compelled
to revise its adopted policy on vision benefits, determining
that stand-alone vision plans and/or supplemental adult vision
benefits could not be offered through Covered California, and
that, for the 2014 plan year, pediatric EHB vision benefits be
offered only through QHPs.
In a letter dated February 2, 2015 from the federal Department
of Health and Human Services to Congresswoman Doris Matsui,
Centers for Medicare and Medicaid Services Administrator
Marilyn Tavenner clarified that a separate state entity does
not need to be created in order for the Exchange to provide a
Website link to a marketplace for adult vision care. There
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must only be the requisite disclaimers made in conjunction
with the link that the plans are not QHPs and do not qualify
for tax credits and subsidies. As such, VSP Global, the
bill's sponsor, indicates that it is working with the Exchange
with the goal of addressing this issue at the administrative
level, and that this bill may provide a vehicle for any
legislative changes that may be necessary for implementation.
4)SUPPORT. Vision Service Plan Global (VSP), this bill's
sponsor, states that this measure will help make adult vision
care available through Covered California. VSP states that
for the past three years, the Exchange has worked to identify
an appropriate pathway to provide access to adult vision
coverage, and this bill will help deliver on the promise of
achieving that goal.
5)OPPOSITION. The California Association of Health Underwriters
(CAHU) opposes this bill unless amended to address specified
concerns. CAHU states that there are still many computer
system challenges and pending projects before the Exchange,
particularly regarding the SHOP program, which should be
completed before any further expansions. Additionally, CAHU
states the bill should include language ensuring that
certified agents would be the enrollment avenue available to
consumers and employers if a decision to add stand-alone
vision plans to Covered California as an optional benefit is
made.
6)RELATED LEGISLATION.
a) AB 1109 (Wilk) provides that the only health benefit
plans available to a member of the Legislature are health
benefit plans offered through the Exchange. AB 1109 is
currently in the Rules Committee.
b) SB 4 (Lara) requires the California Health and Human
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Service Secretary to apply to the federal government for a
waiver of federal law to allow individuals not eligible to
obtain health coverage due to their immigration status to
obtain coverage from the Exchange; requires the Exchange to
offer QHPs, as specified, to these individuals; and
establishes the California Health Exchange Program for All
Californians to be governed by the Exchange executive
board. This bill is set for hearing in the Senate Health
Committee on April 15, 2015.
c) SB 43 (Ed Hernandez) will be amended to update
California's EHB statute to incorporate federal regulations
changes. SB 43 is pending in the Senate Health Committee.
7)PREVIOUS LEGISLATION.
a) AB 1877 (Cooley) would have created in state government
the California Vision Care Access Council, modeled after
the Exchange, to create a marketplace for the purchase of
vision plans by individuals and employers. This bill was
vetoed. In his veto message, the Governor stated that,
"Creating a new state bureaucracy to inform consumers about
vision plans isn't necessary, nor is it advisable to divert
Covered California's focus with a new scheme, the
governance of which may be impermissible under federal
rules."
b) AB 1453 (Ed Hernandez), Chapter 866, Statutes of 2012,
and SB 951 (Monning), Chapter 854, Statutes of 2012,
establish California's EHBs.
c) AB 1602 (John A. Pérez), Chapter 655, Statutes of 2010,
and SB 900 (Alquist), Chapter 659, Statutes of 2010,
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establish the Exchange and its powers and duties.
8)POLICY COMMENT. Pediatric vision care is currently an EHB,
and is required to be included in all individual and small
group health plans in the state. Consumers who are directed
to the Website proposed under this bill may not be aware that
pediatric vision care is covered under their health plan. To
help consumers, and attempt to avoid the potential of
consumers using the proposed Website to purchase a separate
vision plan for pediatric vision benefits, the committee may
wish to amend this bill to require the Website for vision
plans to include a statement that pediatric vision care is an
EHB covered under their health plan.
REGISTERED SUPPORT / OPPOSITION:
Support
Vision Service Plan Global (sponsor)
Opposition
California Association of Health Underwriters
Analysis Prepared by:Kelly Green / HEALTH / (916) 319-2097
AB 845
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