BILL ANALYSIS
AB 1541
Page 1
Date of Hearing: May 12, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 1541 (Committee on Health) - As Amended: May 5, 2009
SUBJECT : Health care coverage
SUMMARY : Extends from 30 days to 60 days the time period an
individual or dependent who has lost or will lose Healthy
Families Program (HFP) coverage or no share-of-cost Medi-Cal
coverage has to request enrollment in group coverage without
being considered a late enrollee. States legislative intent to
enact legislation that would implement the federal Children's
Health
Insurance Program Reauthorization Act (CHIPRA) of 2009 (Public
Law 111-3).
EXISTING LAW :
1)Provides for the regulation of health plans by the Department
of Managed Health Care (DMHC) under the Knox-Keene Health Care
Service Plan Act of 1975 (Knox-Keene) and for the regulation
of health insurers by the California Department of Insurance
under the Insurance Code.
2)Authorizes health plans and insurers to exclude "late
enrollees," as defined, from group health care coverage for no
more than twelve months from the date of the enrollee's
application for coverage.
3)Defines a "late enrollee" as an eligible employee or dependent
who has declined health coverage under a health benefit plan
offered through employment or sponsored by an employer at the
time of the initial enrollment period provided under the terms
of the health benefit plan and who subsequently requests
enrollment in that plan.
4)Excludes from the definition of a "late enrollee" an
individual, or his or her dependent, who has lost or will lose
HFP coverage, as specified, or no share-of-cost Medi-Cal
coverage, and who requests enrollment within 30 days after
termination of coverage.
5)Requires, under federal law, a group health plan to permit an
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eligible person to enroll for coverage under the plan if the
person's coverage under Medicaid (Medi-Cal in California) or
under a state child health plan (such as California's HFP) was
terminated, as specified, and the person applies for coverage
under the group health plan not later than 60 days after that
termination.
6)Prohibits, under the California Constitution, a state
administrative agency from declaring a statute unenforceable,
or from refusing to enforce a statute on the basis that
federal law or federal regulations prohibit the enforcement of
such statute, unless an appellate court has made a
determination that the enforcement of such statute is
prohibited by federal law or federal regulations.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill
would conform provisions of California law to one change made
by the recently enacted federal CHIPRA. CHIPRA reauthorized
the federal State Children's Health Insurance Program (SCHIP,
which is known as the HFP in California), and made a number of
changes to federal SCHIP law.
One change made in Section 311 of CHPRA to the federal Internal
Revenue Code requires a group health plan to allow an employee
who is eligible for but not enrolled in coverage under the
group health plan to enroll in coverage if the employee or
dependent is covered under Medicaid (Medi-Cal in California)
or a state child health plan (HFP in California) and coverage
is terminated because of loss of eligibility for such
coverage. The federal law permits an employee or dependent to
enroll in coverage under the terms of the group health plan
not later than 60 days after the date of termination of SCHIP
or Medicaid coverage. California law contains a similar
provision, but the person must enroll within 30 days after
termination of coverage. This bill would conform the time
frame in California health insurance law to the time frame in
federal tax law.
2)BACKGROUND . On February 4, 2009, President Obama signed into
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law CHIPRA, which reauthorizes SCHIP for four and a half
years. The $32.8 billion cost ($40 billion over 5 years) of
CHIPRA is funded through an increase in federal tobacco taxes,
including a $.62 rise in the cigarette tax (increasing the
federal tax to $1.01 per pack).
CHIPRA includes a number of requirements for state SCHIP
programs to meet, including a requirement that state plans
cover health mental health and substance abuse parity
benefits, that Medicaid citizenship documentation and
verification requirements apply to SCHIP, that federally
qualified health centers and rural health clinics be paid in
SCHIP as they are in Medicaid, and applying Medicaid managed
care standards to SCHIP.
CHIPRA also has established new options for states, including
authorizing an expansion of coverage up to 300% of the federal
poverty level (FPL) (at or below $54,930 for a family of three
in 2009; current coverage generally goes to 250% FPL), to
cover children above 300% FPL with the Medicaid matching rate
(instead of the higher SCHIP matching rate), to allow states
to draw down federal matching funds for recent legal
immigrants in Medicaid and SCHIP, to allow states to offer
"dental only" coverage for children uninsured for dental
coverage, and to provide enhanced federal financial
participation for translation and interpretation services.
3)SUPPORT . United Ways of California writes in support that
this bill would align California law with federal law and
would assist California families in securing health insurance
for their children after the loss of public health insurance
by extending the time frame available to enroll in group
coverage.
4)RELATED LEGISLATION . SB 311 (Alquist), currently in the
Senate, would, contingent on the receipt and appropriation of
funds by the Legislature, require the Managed Risk Medical
Insurance Board (MRMIB) to provide dental-only coverage to
HFP-eligible children, and would authorize MRMIB to adopt
regulations to implement this requirement.
5)INTENT LANGUAGE . This bill states legislative intent to enact
legislation that would implement CHIPRA. Because this bill
only implements one provision of CHIPRA, the author may wish
to consider modifying the intent language to reflect the
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current contents of this bill.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO (prior version)
United Ways of California
Opposition
None on file.
Analysis Prepared by : Scott Bain / HEALTH / (916) 319-2097