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  
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   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
                                                                    
    
                                                                    
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