BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular
SB 125 (Hernandez) - Health care coverage
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|Version: April 6, 2015 |Policy Vote: HEALTH 8 - 0 |
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|Urgency: Yes |Mandate: Yes |
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|Hearing Date: April 13, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 125 would extend the sunset of the California
Health Benefits Review Program for two years and would extend
the existing assessment on health plans and health insurers to
support the program.
SB 125 would also change the open enrollment period for purchase
of individual health care coverage for the 2016 calendar year
and subsequent years to November 1 through January 31, to comply
with recent federal guidelines.
Fiscal
Impact:
Annual costs of $2 million to support the California Health
Benefits Review Program (within the University of California),
supported by an assessment on health plans and health insurers
SB 125 (Hernandez) Page 1 of
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(Health Care Benefits Fund).
Minor administrative costs for the California Health Benefits
Exchange to revise existing regulations to conform to the
updated open enrollment period. According to the Exchange, the
required changes to existing regulations can be included
within an existing package of regulations and therefore there
is no additional cost anticipated. Similarly, the Exchange has
already planned to update information technology systems to
accommodate this change, so no new costs are anticipated.
No significant costs are anticipated for the Department of
Insurance or the Department of Managed Health Care.
Background: Under current law, the Legislature requests the University of
California to establish the California Health Benefits Review
Program. The Program is established to provide assistance to the
Legislature in its review of proposed laws that would mandate
benefits or services to be covered by health plans and health
insurers. The Program provides information on the medical
effectiveness and projected costs of proposed new benefit
mandates. Current law requests the Program to provide a
requested analysis within 60 days of receiving a request from
the Legislature.
Under current law, health plans and health insurers pay an
annual assessment, not to exceed $2 million, to support the
operations of the Program.
These provisions of law become inoperative on June 30, 2015 and
sunset on December 31, 2015. In addition, the statutory
authority to collect the assessment from health plans and health
insurers ends at the end of the 2014-15 fiscal year. (The
Governor's January budget proposal for 2015-16 includes $2
million in proposed funding for the Program.)
Also under current law, health plans and health insurers selling
products in the individual market are required to provide an
open enrollment period from November 15, 2014 to February 15,
2015 for the 2015 calendar year and an open enrollment period
from October 15, 2015 to December 7, 2015 for the 2016 calendar
year and subsequent years.
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On February 20, 2015 the federal government released final
guidance requiring an open enrollment period from November 1,
2015 to January 31, 2016 for the 2016 calendar year.
Proposed Law:
SB 125 would extend the sunset on the California Health
Benefits Review Program for two years June 30, 2017. The bill
would expand the requested activities of the Program to include
analyses of the impact of proposed benefit mandates on the
California Health Benefit Exchange and analyses of proposed laws
that impact health care coverage benefit design, cost sharing,
and other topics. The bill would also specify that the Program
shall complete its analyses within 60 days or in a manner and
timeline agreed to with the Legislature.
The bill would extend the assessment on health plans and health
insurers to support the program until June 30, 2017.
SB 125 would also change the open enrollment period for purchase
of individual health care coverage for the 2016 calendar year
and subsequent years to November 1 through January 31.
This bill is an urgency measure.
Related
Legislation: AB 1578 (Pan) would have extended the sunset of
the California Health Benefits Review Program until June 30,
2016. That bill died in the Assembly on concurrence.
Staff
Comments: The statutory authority for the California Health Benefits
Review Program does not end until the end of 2016. However, the
authority to collect the assessment that supports the program
ends on June 30, 2015. In order to continue the operation of the
California Health Benefits Review Program, this bill is
necessary to extend the source of funding.
Under the California Constitution, the Legislature has limited
authority over the University of California. The Legislature
generally cannot mandate the University to conduct specific
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program activities. Therefore, current law and this bill request
the University to operate the California Health Benefits Review
Program.
The only costs that may be incurred by a local agency relate to
crimes or infractions. Under the California Constitution, such
costs are not reimbursable by the state.
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