BILL ANALYSIS AB 1059 Page 1 GOVERNOR'S VETO AB 1059 (Migden) As Amended September 4, 1997 2/3 vote ASSEMBLY: 42-35 (June 2, 1997) SENATE: 21-17 (September 8, 1997) ASSEMBLY:41-36 (August 28, 1998) Original Committee Reference: INS. SUMMARY : Requires health plans that offer benefits to the dependents of an employee or subscriber to offer those benefits on the same terms to a domestic partner. Specifically, this bill requires group health care service contracts to provide the same benefits to the domestic partner of a subscriber or employee as they provide to dependents. The Senate amendments specify that nothing in the bill is intended to expand the requirements of the federal Consolidated Omnibus Budget Reform Act of 1985 (COBRA). AS PASSED BY THE ASSEMBLY , this bill required health insurers to offer (but did not require employers to purchase) benefits to domestic partners. FISCAL EFFECT : Unknown. The bill does not require any employer to provide domestic partner benefits. COMMENTS : The author introduced this bill to address the paradox current law poses for unmarried couples. The Unruh Civil Rights Act, as well as an explicit regulation applicable to the business of insurance, provide that no Californians will be discriminated against based on their marital status or sexual orientation. Yet health plans currently offer benefits to spouses that are not available to a person's unmarried partner. This paradox is particularly acute for same-sex couples, who are prohibited from having their committed and exclusive relationships recognized as marriages. A court case ( Beaty v. Truck Ins. Exchange (1992) 6 Cal.App.4th 1455) appears to permit this under the Unruh Act. Elderly couples who form committed and caring relationships share a similar problem. This bill helps resolve the current conflict in law with respect to health benefits. Unmarried couples who meet specific legal requirements will not be denied access to health benefits for their partner solely because of their sexual orientation or marital status. GOVERNOR'S VETO MESSAGE This bill would require health care service plans and disability insurers that provide health insurance benefits to employers to offer coverage for domestic partners of employees. Domestic partner health benefit coverage is an issue that is AB 1059 Page 2 more appropriately left to negotiations between employers and employees. This coverage is available for both large and small employers who wish to provide the benefit, as evidenced by the many employers who choose to do so. This bill would also increase the cost of health insurance. No definition for "domestic partner" is provided. Accordingly, almost any person living with a covered employee would be eligible for benefits. Coverage would not only be extended to the relationships contemplated by the author, but also to roommates and heterosexual couples who live together but do not marry. This will increase the cost of insurance because premium rates for dependent coverage are based on stable family relationships. The lack of a definition for "domestic partner" lends itself to instability, fraud and adverse selection. Most importantly, this bill is clearly only the beginning of the domestic partnership debate. Enactment of this would likely result in more extravagant domestic partner legislation that uses these insurance coverage provisions as a precedent for "domestic partner" rights which are currently allowed for only traditional family members. Analysis prepared by : David Link / ains / (916) 319-2086 FN 044117