BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 514
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|AUTHOR: |Anderson |
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|VERSION: |April 20, 2015 |
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|HEARING DATE: |April 29, 2015 | | |
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|CONSULTANT: |Teri Boughton |
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SUBJECT : California Health Benefit Exchange
SUMMARY :1. Requires Covered California to allow an applicant to
indicate in an application for health care coverage whether or
not the applicant would like assistance with completing the
application from a Covered California certified insurance
agent or certified enrollment counselor and prohibits the
release of personally identifiable information without
permission.
Existing law:
1.Establishes the Health Benefit Exchange (Covered California)
in state government as a state-based marketplace where
individuals and small businesses can purchase qualified health
plans.
2.Establishes the Information Practices Act of 1977 (IPA), which
prohibits every state office, officer, department, division,
bureau, board, commission or other state agency from
disclosing personal information unless the information is
disclosed according to one of a specified list of provisions,
such as:
a. With prior voluntary written consent, not
more than 30 days in advance of the disclosure, or in
the time limit agreed to by the individual; or,
b. To those officers, employees, attorneys,
agents, or volunteers of the agency that has custody
of the information if the disclosure is relevant and
necessary in the ordinary course of the performance
of their official duties and is related to the
purpose for which the information was acquired.
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3.Defines, under the IPA, "personal information" as any
information that is maintained by an agency that identifies or
describes an individual, including, but not limited to, his or
her name, social security number, physical description, home
address, home telephone number, education, financial matters,
and medical or employment history.
4.Makes, under the IPA, any person who willfully requests or
obtains any record containing personal information from an
agency under false pretenses guilty of a misdemeanor and fined
not more than $5,000, or imprisoned not more than one year, or
both, and also under the IPA subject to civil action for
invasion of privacy, in addition to any special or general
damages awarded, awarded a minimum of $2,500 in exemplary
damages as well as attorney's fees and other litigation costs
reasonably incurred in the suit.
5.Establishes, under federal law, the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), which
among various provisions, mandates industry-wide standards for
health care information on electronic billing and other
processes; and, requires the protection and confidential
handling of protected health information.
6.Establishes, under the federal Affordable Care Act, (ACA), the
procedures for determining eligibility for Exchange
participation, premium tax credits and reduced cost sharing,
and individual responsibility exemption. Requires an
applicant for coverage or for a premium tax credit or cost
sharing reduction to be required to provide only the
information strictly necessary to authenticate identity,
determine eligibility, and determine the amount of the credit
or reduction.
7.Requires under the ACA any person who receives information
provided by an applicant for insurance coverage to use the
information only for the purposes of, and to the extent
necessary in, ensuring the efficient operation of the
Exchange, including verifying eligibility of an individual to
enroll through an Exchange or to claim a premium tax credit or
cost sharing reduction or the amount of the credit or
reduction, and not disclose the information to any other
person except as provided.
8.Authorizes under federal regulations an Exchange to only use
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or disclose such personally identifiable information for the
purposes of determining eligibility in a qualified health
plan, for other insurance affordability programs, or for
exemptions from the individual responsibility provisions, as
specified, to the extent such information is necessary to
carry out the functions of the Exchange, as specified. For
other uses which the Secretary of Health and Human Services
(HHS) determines are in compliance with the ACA but are not to
carry out the Exchange functions, requires individual consent.
To carry out other functions, requires consent and
substantive and procedural requirements, as specified.
This bill:
1.Requires Covered California to allow an applicant to indicate
in an application for health care coverage whether or not the
applicant would like assistance with completing the
application from a Covered California certified insurance
agent or certified enrollment counselor.
2.Prohibits Covered California from disclosing any personal
information, as defined in existing law that was obtained from
the application for health care coverage to a certified
insurance agent or certified enrollment counselor until
Covered California has complied with 1) above.
3.Prohibits Covered California from disclosing any personal
information, as defined in existing law that was obtained from
the application for health care coverage to a certified
insurance agent or certified enrollment counselor if the
applicant indicates that the applicant does not want
assistance from a Covered California certified insurance agent
or certified enrollment counselor.
4.Permits Covered California to share the information of current
enrollees or applicants with the same certified enrollment
counselor or certified insurance agent of record that provided
the applicant assistance with an existing application, or
their successor or authorized staff, as otherwise permitted by
federal and state laws and regulations.
FISCAL
EFFECT : This bill has not been analyzed by a fiscal committee.
COMMENTS :
1.Author's statement. According to the author, the ACA has directed
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states to provide marketplaces, or exchanges, for consumers
seeking health insurance. Covered California, the health benefit
exchange in our state, has provided this platform for individuals
shopping for a plan. Unfortunately, due to a security loophole in
the law, shoppers on the website have suffered a disclosure of
their data to outside companies without having given their
permission. This bill is an effort to close that loophole, so that
consumers may shop free from fear of losing their privacy to
unknown, outside entities.
2.Covered California Launch. Covered California opened for
enrollment October 1, 2013. While the California launch was a
success it was not without issues. Many found the overall
enrollment process difficult to complete. Covered California
identified challenges and opportunities for improvement. Because
of technical system issues, Covered California allowed people who
started applications to complete those applications until April
15th. According to Covered California, to follow-up on
applications started to ensure coverage effective January 1, 2014,
Covered California enlisted the help of roughly 2,100 of its
Certified Insurance Agent subcontractors to offer additional
assistance to roughly 41,000 households. The basic contact
information (name, telephone number, etc.) was securely
transmitted to Certified Insurance Agents by General Agent
partners, with instructions to quickly touch as many of these
consumers as possible to ensure that they were offered additional
assistance to complete their enrollments. Consumer information was
carefully protected: each Certified Insurance Agent who
participated in the program was given only a small batch of
"leads" at a time, according to their capacity to reach consumers,
and results were reported back to the General Agents. The program
was put on hold when some consumers were surprised to be contacted
by someone they did not realize was calling on behalf of Covered
California.
3.Covered California Privacy Practices. Covered California
Notice of Privacy Practices, Use and Disclosure explain that
Covered California may use and disclose a consumer's personal
information with contractors to help with enrollment and
contact the consumer when necessary. Additionally, all
contractors who Covered California shares information with for
these purposes undergo a fingerprint and background check,
receive specialized training on keeping information
confidential, and require signed confidentiality agreements
that requires contractors to follow the safeguards applicable
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to Covered California, and prohibit the use for any purposes
outside the scope of the contract.
According to Covered California, both the paper and online
application include disclosures about Covered California's
privacy policy, and require the consumer to agree that they
are aware of those privacy policies and practices. This is
required under the IPA and the ACA. On the paper
application, the privacy policy is described immediately above
the "rights and responsibilities" section of the application,
and is referenced in the declaration and signature which are
submitted under penalty of perjury. Specifically, the paper
application states, "We will share your information with other
state, federal and local agencies, contractors, health plans,
and programs only to enroll you in a plan or program or to
administer programs, and with other state and federal agencies
as required by law." For the web-based application, in
order to initially set up an online application a user must
actively consent by clicking a box to agree to the Terms of
Conditions. The Terms and Conditions direct users to
information on the privacy policy that applies to personal
information collected on the site. It discloses that Covered
California maintains administrative, physical, technical,
electronic and procedural safeguards to protect the
confidentiality and security of the personal information. It
allows links to additional information about how data is
collected online and used, and how to request restrictions on
the use and disclosure of information, among other
information.
4.California Healthcare Eligibility, Enrollment and Retention
System (CalHEERS). CalHEERS is a web-based system that
streamlines the eligibility and enrollment process for all
products and programs available through Covered California.
Covered California has included on the CalHEERS 24 Month Road
Map a change request with the title, "Consumer Consent to
Share Personally Identifiable Information with Covered
California Certified Representative." According to the
document, Covered California needs to obtain more explicit
consumer consent before it shares any personally identifiable
information (namely, contact information) to any of its
certified representatives. The goal of this change request is
to implement a business policy that allows consumers the
opportunity to opt in or out of having their information
shared for program purposes. The change is scheduled for April
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2016. The background associated with this change request
indicates that most consumers appreciated the help from
certified representatives but a few consumers were surprised
that they were being contacted by an agent since they had not
delegated their application. According to the document, while
this use of consumer information was legally authorized,
Covered California wants to make sure consumers always have a
clear expectation about how their information may be shared.
There will be two boxes for consumers to consent to Covered
California's privacy policies and information sharing
practices. The first for the consumer to agree to the privacy
policy and the second to agree to have information shared with
the certified representative for follow-up assistance.
Consumer advocates have requested that this change allow for
an opt-in not an opt-out of having their information shared.
5.Prior legislation. SB 974 (Anderson), of 2014, would have
required Covered California to allow consumers to indicate
whether they would like assistance from an agent or enrollment
counselor, and prohibit Covered California from disclosing
personal information if applicants indicate they do not want
assistance. SB 974 was held in the Assembly Appropriations
Committee.
AB 1560 (Gorell), of 2014, would have prohibited Covered
California from disclosing an individual's personal
information, as defined, to third parties for the purpose of
determining eligibility for, or enrolling the individual in,
health care coverage unless, prior to the disclosure, and
would have required Covered California to immediately notify
the public of any breach of the security of personal
information created, collected, or maintained by Covered
California, regardless of the severity of the breach and
regardless of whether personal information was acquired by an
unauthorized person during the breach. AB 1560 failed passage
in the Assembly Health Committee.
SB 900 (Alquist), Chapter 659, Statutes of 2010, and AB 1602
(Perez), Chapter 655, Statutes of 2010, established the
California Health Benefit Exchange.
SUPPORT AND OPPOSITION :
Support: None received
Oppose: None received
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