BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 43 (Hernandez) - Health care coverage: essential health
benefits.
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|Version: April 20, 2015 |Policy Vote: HEALTH 9 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 11, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 43 would update state law regulating individual and
small group health care coverage to make it consistent with
recent federal guidance relating to the state's essential health
benefit benchmark plan and the definition of habilitative
services.
Fiscal
Impact:
One-time costs over $150,000 to revise regulations by the
Department of Insurance (Insurance Fund).
One-time costs over $150,000 to revise regulations by the
Department of Managed Health Care (Managed Care Fund).
SB 43 (Hernandez) Page 1 of
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No anticipated impact to state health care program such as
Medi-Cal or CalPERS. The bill's provisions make minor changes
to statute governing the individual and small group health
care markets, which do not include those programs.
No cost to the state to provide subsidies for additional costs
to Covered California plans, due to the change to the
definition of habilitative services. Recent federal guidance
indicates that states are not obligated to defray any
additional subsidy costs in health benefit exchanges due to a
change to the definition of habilitative services.
Background: Under the federal Affordable Care Act and implementing state
law, health care coverage sold in the individual and small group
markets are required to provide coverage for ten specified
essential health benefits and must offer benefit coverage at
least equal to the benefits provided in the state's essential
health benefit benchmark plan. Following federal guidance, in
2012 the state selected the Kaiser Small Group HMO as the
benchmark plan.
Federal law includes habilitative services as one of the ten
mandated essential health benefits. Previously, federal law and
guidance had not defined habilitative services, so the state
adopted a definition in state law.
Once a benchmark plan has been adopted by a state, federal law
and regulation requires a state to pay for the proportionate
share of providing subsidies through a state health care
exchange, for any additional benefit mandates that exceed the
benefits in the benchmark plan.
Recently, federal guidance was released indicating that the
states should update their benchmark plans to the 2014 plan
year. The federal guidance also included a definition of
habilitative services that is somewhat broader than the existing
state definition. The federal guidance indicates that the states
are not obligated to defray any additional costs for coverage
through an exchange if a state adopts the new federal
definition.
SB 43 (Hernandez) Page 2 of
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Proposed Law:
SB 43 would update state law regulating individual and small
group health care coverage to make it consistent with recent
federal guidance relating to the state's essential health
benefit benchmark plan and the definition of habilitative
services.
The bill would update the state's essential health benefit
benchmark plan to the Kaiser Small Group HMO for the 2014 plan
year. The bill would conform the definition of habilitative
services to the federal definition and prohibit limits on
habilitative and rehabilitative services from being combined.
The bill would extend existing authority to adopt emergency
regulations by the Department of Insurance and the Department of
Managed Health care to July 1, 2018.
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