BILL ANALYSIS AB 39 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 39 (Hertzberg) As Amended September 2, 1999 Majority vote ASSEMBLY: 52-26 (April 19, 1999) SENATE: 23-12 (September 7, 1999) Original Committee Reference: HEALTH SUMMARY : Establishes the Women's Contraception Equity Act, which requires health care service plan contracts to cover prescription contraceptive methods. Specifically, this bill : 1)Requires specified group and individual health plan contracts issued, amended, renewed, or delivered on or after January 1, 2000, that provide coverage for outpatient prescription drug benefits to include coverage for a variety of federal Food and Drug Administration (FDA) approved prescription contraceptive methods. 2)Requires contraceptive benefits provided under the provisions of this bill to be the same for an enrollee's covered spouse and covered nonspouse dependents. 3)Exempts specialized health plan contracts from the requirements of this bill. 4)Provides that a religious employer may request a health plan contract without coverage for FDA-approved contraceptive methods that are contrary to the religious employer's religious tenets. Provides that this provision shall not be construed to deny an enrollee coverage of, and timely access to, contraceptive methods. 5)Defines "religious employer" as an entity for which: a) The inculcation of religious values is the purpose of the entity; b) The entity primarily employs persons who share the religious tenets of the entity; c) The entity serves primarily persons who share the religious tenets of the entity; and, AB 39 Page 2 d) The entity is a nonprofit organization pursuant to Section 6022(a)(2)(A)I or iii, of the Internal Revenue Code. 6)Requires any organization that invokes the religious exemption in this bill to provide written notice to prospective enrollees, listing the contraceptive services the employer refuses to cover. 7)Provides that nothing in this bill is to be construed to exclude coverage for prescription contraceptive supplies ordered by a health care provider for reasons other than contraceptive purposes, such as decreasing the risk of ovarian cancer or eliminating symptoms of menopause, or for prescription contraception that is necessary to preserve the life or health of an enrollee. The Senate amendments insert the religious exemption and written notice provisions of this bill. EXISTING LAW : 1)Requires health plan contracts to cover a core package of benefits plus certain other mandated benefits. 2)Permits health facilities and health professionals to refuse to participate in certain clinical procedures on moral grounds. AS PASSED BY THE ASSEMBLY , this bill established the Women's Contraception Equity Act, which requires health care service plan contracts to cover prescription contraceptive methods. FISCAL EFFECT : Negligible, according to the Assembly Appropriations Committee analysis. COMMENTS : This bill is intended to require health plans to cover FDA-approved contraceptive methods. The author argues that this bill addresses the inequity in prescription benefits for women, since many plans do not provide routine coverage for birth control. As a result, the author notes that women pay 63% more in out-of-pocket costs (i.e., mostly attributed to reproductive health expenses) than men. The author argues that contraception should not be a luxury for women, that AB 39 Page 3 contraceptives have been shown to lower the risk of ovarian cancer, and that reducing unintended pregnancies may lower employer costs. This bill is substantially similar to AB 160 and AB 1112, both authored by Assemblymember Hertzberg and vetoed last session. In his veto message for AB 160, Governor Wilson indicated a willingness to ". . . sign legislation if it exempts religious employers and organizations based on their religious beliefs . . ." and highlighted his leadership in implementing the Family Planning Access, Care and Treatment program (Family PACT). Following this veto, Assemblymember Hertzberg introduced AB 1112, a substantially similar measure that exempted religious organizations and permitted employees of such organizations who earn up to 400% of the federal poverty level to secure contraceptive coverage through the Family PACT program. The AB 1112 veto message stated that it is inappropriate for taxpayers to pay for contraceptives for certain employees that earn up to 400% of the federal poverty level. This bill requires health plans to provide contraceptive coverage, and SB 41 (Speier) contains a companion requirement for disability insurers. This bill exempts churches, synagogues, mosques, temples, missions parochial schools, seminaries and convents from providing contraceptive coverage. The Catholic Conference and the California Association of Catholic Hospitals (CACH) argue that this exemption does not go far enough, and desire to include organizations such as hospitals, universities, private, non-parochial schools, and social services agencies. The sponsors, American College of Obstetricians and Gynecologists, District IX, and Planned Parenthood Affiliates of California, argue that an exemption for employers other than religious organizations would allow an employer to make family planning decisions for its employees. As employers and health care providers, Catholic-affiliated hospitals provide health care services, and they employ thousands of employees in managerial and clinical positions that require no religious training, experience or belief. Analysis Prepared by : Ann Blackwood / HEALTH / (916) 319-2097 FN: 0003389