BILL ANALYSIS
AB 1521
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Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1521 (Jones) - As Amended: April 29, 2009
Policy Committee: Health Vote:10-6
Insurance 7-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill prohibits health plans and insurers from entering into
compensation agreements with agents and brokers that vary due to
beneficiary health status, claims experience, industry,
occupation, or geographic location. In addition, this bill
prohibits health plans and insurers from entering into
compensation agreements with agents or brokers that provide
increased payment for enrolling a beneficiary in a new plan
rather than renewing an existing policy. This bill makes several
other changes to increase disclosures and consumer protections
in the purchase of health coverage.
FISCAL EFFECT
No direct fiscal impact to the California Department of Managed
Health Care (DMHC) and the California Department of Insurance
(CDI) to continue regulation of health plans and health
insurers.
COMMENTS
Rationale . This bill is sponsored by Health Access California to
increase consumer protections with regard to the purchase and
renewal of health insurance. According to the author and
sponsor, continually rising health care costs have driven
consumers to shop for new coverage with lower premiums. Many
consumers are not aware of underwriting and sales strategies
that may result in a beneficiary being deemed uninsurable,
facing even higher costs, acquiring less robust coverage, or
being changed between products for the benefit of an agent or
broker. This bill establishes related prohibitions to increase
AB 1521
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disclosures and increase continuity of coverage for
beneficiaries who may otherwise change health coverage without
fully understanding coverage implications.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081