BILL ANALYSIS Ó
SB 43
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Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 43
(Hernandez) - As Amended August 17, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill updates California law related to the definition of
essential health benefits (EHBs) to make it consistent with
recent federal regulations under the Patient Protection and
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Affordable Care Act (ACA). Specifically, this bill:
1)Updates existing law to reflect that the Kaiser Foundation
Health Plan Small Group HMO 30 plan as offered during the
first quarter of 2014 (rather than 2012) is California's EHB
benchmark.
2)Updates existing law to reflect that, for pediatric vision
care, the Federal Employees Dental and Vision Insurance
Program (FEDVIP) as offered during the first quarter of 2014
(rather than 2012) is California's benchmark for pediatric
vision care.
3)Prohibits, for plan years commencing on or after January 1,
2017, limits on habilitative and rehabilitative services from
being combined.
4)Replaces the existing definition of habilitative services to
be consistent with new federal regulation.
5)Extends emergency regulation authority for the Department of
Managed Health Care (DMHC) and the California Department of
Insurance (CDI), and makes this authority inoperative on July
1, 2018.
FISCAL EFFECT:
1)One-time costs of $150,000 to revise regulations and ensure
policy compliance by CDI (Insurance Fund).
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2)One-time costs of $350,000 to revise regulations and ensure
plan compliance by DMHC (Managed Care Fund).
3)No anticipated impact to state health care program such as
Medi-Cal or California Public Employees' Retirement System
(CalPERS). This bill's provisions make minor changes to
statute governing the individual and small group health care
markets, which do not include those programs.
4)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.
COMMENTS:
1)Purpose. According to the author, in 2012, the Legislature
established California's benchmark EHB plan through a process
that recognized the importance of existing state-mandated
benefits, protected California's commitment to reproductive
services, embraced the consumer-oriented regulatory framework
in place at DMHC, and maintained affordability for consumers.
Using these principles and through a process of comparison, SB
951 (Ed Hernandez), Chapter 866, Statutes of 2012, paired with
AB 1453 (Monning), Chapter 854, Statutes of 2012, designated
the Kaiser Small Group HMO to serve as the state's benchmark
plan. Earlier this year, the federal government issued new
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regulations requiring states to update their EHBs based on
2014 benchmark plans. The new regulations also create a
definition of habilitative services and devices that is more
generous than California's current definition. The author
states this bill has been introduced to make statutory changes
necessary to conform to federal requirements.
2)EHB Designation. The ACA requires health plans offered in the
individual and small group markets to offer a comprehensive
package of items and services termed EHBs. These EHBs must
include items and services with at least the following 10
categories: ambulatory patient services; emergency services;
hospitalization; maternity and newborn care; mental health and
substance use disorder services, including behavioral health
treatment; prescription drugs; rehabilitative and habilitative
services and devices; laboratory services; preventive and
wellness services and chronic disease management; and
pediatric services, including oral and vision care. States
were provided authority to designate EHBs by reference to a
benchmark plan, and California designated a Kaiser Small Group
HMO plan as the benchmark. This bill simply updates the
benchmark to a 2014 product instead of a 2012 product, which
the code currently references. This choice was based on
significant actuarial analysis and stakeholder engagement.
3)Support. This bill has fairly broad support and has no
opposition. Certain interest groups and entities, including
Insurance Commissioner Dave Jones, the Amputee Coalition,
National Health Law Program, and the California Orthotic and
Prosthetic Association, have urged consideration of the Kaiser
CalPERS HMO product as a benchmark instead of the small-group
product identified in the bill, as it includes a slightly
greater benefit package that includes coverage for hearing
aids, infertility treatment, and certain prosthetic and
orthotic devices.
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Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081