BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K Alquist, Chair
BILL NO: AB 1541
A
AUTHOR: Committee on Health
B
AMENDED: June 16, 2009
HEARING DATE: June 25, 2009
1
CONSULTANT:
5
Park/
4
1
SUBJECT
Health care coverage
SUMMARY
Extend from 30 days to 60 days the time period an
individual or dependent, who has lost or will lose Healthy
Families Program (HFP) coverage, as specified, AIM, or
Medi-Cal coverage, has to request enrollment in group
coverage without being considered a late enrollee.
CHANGES TO EXISTING LAW
Existing federal law:
Existing federal law establishes the Medicaid program which
provides comprehensive health coverage to low-income
eligible individuals and families, including children; the
aged, blind, and disabled; and pregnant women, through a
program that reimburses states for the Medicaid programs in
the individual states. Existing federal law establishes
the Children's Health Insurance Program (CHIP) which
provides matching funds for state children's health
insurance programs. Existing federal law provides specific
guidance for determining eligibility for Medicaid and CHIP
while preserving flexibility for states to administer these
programs according to the needs of the state.
Continued---
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 2
Existing federal law, under the Children's Health Insurance
Program Reauthorization Act (CHIPRA) of 2009 (Public Law
111-3), requires a group health plan to permit an 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
Healthy Families program) was terminated as a result of
loss of eligibility, and the person applies for coverage
under the group health plan not later than 60 days after
that termination.
Existing state law:
Existing state law establishes the state's Medicaid program
known as Medi-Cal, administered by the Department of Health
Care Services (DHCS), which provides comprehensive health
benefits to low-income children; their parents or caretaker
relatives; pregnant women; elderly, blind or disabled
persons; nursing home residents; and refugees who meet
specified eligibility criteria. Existing law establishes
the Access for Infants and Mothers (AIM) Program,
administered by the Managed Risk Medical Insurance Board
(MRMIB), to provide low-cost health care coverage for
pregnant women and their newborns. Existing state law
establishes the Healthy Families Program (HFP),
administered by MRMIB, to provide low-cost insurance,
including health, dental and vision coverage to children
who do not have health insurance, do not qualify for free
Medi-Cal and are in families at or below 250 percent of the
federal poverty level.
Existing law 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.
Existing law authorizes health plans and insurers to
exclude "late enrollees," as defined, from group health
care coverage for no more than 12 months from the date of
the enrollee's application for coverage. Existing law
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
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 3
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. Existing
law excludes from the definition of a "late enrollee"
individuals in specified circumstances, including 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 requests enrollment within 30 days
after termination of coverage.
Existing law 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.
This bill:
This bill would extend from 30 days to 60 days the time
period an individual or dependent, who has lost or will
lose Healthy Families Program (HFP) coverage, as specified,
AIM, or Medi-Cal coverage, has to request enrollment in
group coverage without being considered a late enrollee.
The bill would also state legislative intent to enact
legislation that would implement a provision of CHIPRA.
FISCAL IMPACT
According to the Assembly Appropriations committee, the
bill would have no direct fiscal impact for the California
Department of Managed Health Care (DMHC), the California
Department of Insurance (CDI), the Managed Risk Medical
Insurance Board (MRMIB), or the Department of Health Care
Services (DHCS) to continue oversight of health coverage
enrollment and termination.
BACKGROUND AND DISCUSSION
Author's statement
According to the Assembly Committee on Health, this bill
would conform provisions of California law to one change
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 4
made by the recently enacted federal CHIPRA, which
reauthorized the State Children's Health Insurance Program
(now referred to as the Children's Health Insurance
Program, or CHIP), and made a number of changes to the law.
The committee notes that Section 311 of CHIPRA, which
amended the Internal Revenue Code and the Employee
Requirement Income Security Act, requires a group health
plan to allow an employee or dependent, 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 or AIM in California), and coverage
is terminated because of loss of eligibility for such
coverage.
The Assembly Committee on Health points out that 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 CHIP or Medicaid
coverage, while under California law, a person must enroll
within 30 days after termination of coverage. The
committee states that this bill would conform the time
frame in California health insurance law to the time frame
in federal tax law.
Children's Health Insurance Program Reauthorization Act of
2009
On February 4, 2009, President Obama signed into law
CHIPRA, which reauthorizes CHIP 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 CHIP
programs to meet, including a requirement that state plans
cover mental health and substance abuse parity benefits,
that Medicaid citizenship documentation and verification
requirements apply to CHIP, that federally qualified health
centers and rural health clinics be paid in CHIP as they
are in Medicaid, and that Medicaid managed care standards
be applied to CHIP.
CHIPRA also establishes new options for states, including
authorizing an expansion of coverage up to 300 percent of
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 5
the federal poverty level (FPL) (at or below $54,930 for a
family of three in 2009; current coverage generally goes to
250 percent FPL), and authorization to cover children above
300 percent FPL with the Medicaid matching rate (instead of
the higher CHIP matching rate). CHIPRA also allows states
to draw down federal matching funds for recent legal
immigrants in Medicaid and CHIP, offer "dental only"
coverage for children uninsured for dental coverage, and
receive enhanced federal financial participation for
translation and interpretation services.
According to a "Statement Related to Premium Assistance
Provision in CHIPRA," pertaining to Section 311, published
by the Centers for Medicare and Medicaid Services, prior to
the enactment of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), employees and their
dependents who became eligible for employment-based group
health plan coverage, but did not enroll when first given
the opportunity, had no guaranteed right under federal law
to join the group health plan if their circumstances
changed at a later time. The statement highlighted that,
even if the plan offered an annual open enrollment period,
the individual would not only have to wait until that open
enrollment period began, but enrollment during that period
could be considered a "late enrollment" subject to a higher
premium or restricted benefits.
According to the statement, while HIPAA added a "special
enrollment" right for individuals and families who meet
certain requirements (specifically, individuals who
otherwise meet eligibility criteria, and (1) lose
eligibility for other group health plan or health insurance
coverage, or (2) acquired a spouse or child through
marriage, birth, adoption, or placement for adoption, can
have a right to prompt enrollment if the request is made
within 30 days of the change, without any late enrollment
penalty), changes in Medicaid or CHIP eligibility generally
did not fall under either category.
Effective April 1, 2009, CHIPRA provides employees and
their dependents with a special enrollment right in group
health plan coverage without having to wait for an open
enrollment period if either of the following conditions is
met: 1) the employee or dependent loses eligibility under
CHIP or Medicaid for individuals who otherwise meet the
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 6
eligibility requirements of a group health plan; or 2) the
employee or dependent becomes eligible for premium
assistance from the State under its CHIP or Medicaid
program, if otherwise eligible for a group health plan.
Enrollment must be requested within 60 days after the loss
of eligibility under Medicaid or CHIP or after the date the
employee or dependent is determined to be eligible for
premium assistance.
Related legislation
SB 311 (Alquist) 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. Held under submission in the Senate
Appropriations Committee as a two-year bill.
SB X3 26 (Alquist) contains identical provisions as SB 311.
This bill is in the Senate Rules Committee.
AB X3 24 (Jones) would state legislative intent to enact
changes resulting from federal economic stimulus
legislation and the reauthorization of CHIP. The bill is
in the Assembly Rules Committee.
Arguments in support
100 Percent Campaign and United Ways of California write 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.
PRIOR ACTIONS
Assembly Floor: 79-0
Assembly Appropriations:15-0
Assembly Health: 19-0
COMMENTS
1.Recommended amendment.
With regard to the requirement to allow an employee or
dependent to enroll into group coverage within 60 days of
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 7
being terminated from Medicaid or a state child health
plan, without being considered a late enrollee, federal
CHIPRA uses the phrase "as a result of loss of
eligibility for such coverage," whereas state law uses
the phrase "as a result of exceeding the program's income
or age limits," with respect to the Healthy Families
Program. No similar language qualifies the loss of
coverage under Medi-Cal. In light of the Governor's
proposal to eliminate the Healthy Families Program, and
the recent work of the legislative conference committee
to reduce the General Fund appropriation to HFP by a
substantial amount, loss of coverage in HFP may result
for reasons other than income or age limitations. Staff
recommends eliminating the phrase "as a result of
exceeding the program's income or age limits," to make
the construction similar to what is provided for under
Medi-Cal loss of coverage. This would also ensure that
those who may lose Healthy Families Program coverage as a
result of budget cuts to have the same 60-day window
under which to apply for group coverage without being
considered a late enrollee.
Page 4, lines 29-39, and page 5, lines 1-2:
29 (C) He or she has lost or will lose
coverage under another
30 employer health benefit plan as a result of
termination of
31 employment of the individual or of a person
through whom the
32 individual was covered as a dependent,
change in employment
33 status of the individual or of a person
through whom the individual
34 was covered as a dependent, termination of
the other plan's
35 coverage, cessation of an employer's
contribution toward an
36 employee or dependent's coverage, death of
the person through
37 whom the individual was covered as a
dependent, legal separation,
38 divorce, loss of coverage under the Healthy
Families Program, as
39 a result of exceeding the program's income
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 8
or age limits, loss of
1 coverage under the AIM Program, or loss of
no share-of-cost
2 Medi-Cal coverage .
Page 6, lines 14-19:
14 (6) The individual is a dependent of an
enrolled eligible
15 employee who has lost or will lose his or
her coverage under the
16 Healthy Families Program, as a result of
exceeding the program's
17 income or age limits, coverage under the
AIM Program, or no
18 share-of-cost Medi-Cal coverage and
requests enrollment within
19 60 days after termination of that coverage.
Page 13, lines 17-29:
17 (C) The individual has lost or will
lose coverage under another
18 employer health benefit plan as a result of
termination of
19 employment of the individual or of a person
through whom the
20 individual was covered as a dependent,
change in employment
21 status of the individual or of a person
through whom the individual
22 was covered as a dependent, termination of
the other plan's
23 coverage, cessation of an employer's
contribution toward an
24 employee or dependent's coverage, death of
a person through
25 whom the individual was covered as a
dependent, legal separation,
26 divorce, loss of coverage under the Healthy
Families Program, as
27 a result of exceeding the program's income
or age limits, loss of
28 coverage under the AIM Program, or loss of
no share-of-cost
29 Medi-Cal coverage .
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 9
Page 14, lines 25-30:
25 (6) The individual is a dependent of an
enrolled eligible
26 employee who has lost or will lose his or
her coverage under the
27 Healthy Families Program, as a result of
exceeding the program's
28 income or age limits, coverage under the
AIM Program, or no
29 share-of-cost Medi-Cal coverage and
requests enrollment within
30 60 days of termination of that coverage.
Page 17, lines 34-40, and page 18, lines 1-6:
34 (C) The individual has lost or will
lose coverage under another
35 employer health benefit plan as a result of
termination of
36 employment of the individual or of a person
through whom the
37 individual was covered as a dependent,
change in employment
38 status of the individual or of a person
through whom the individual
39 was covered as a dependent, termination of
the other plan's
40 coverage, cessation of an employer's
contribution toward an
1 employee or dependent's coverage, death of
a person through
2 whom the individual was covered as a
dependent, legal separation,
3 divorce, loss of coverage under the Healthy
Families Program, as
4 a result of exceeding the program's income
or age limits, loss of
5 coverage under the AIM Program, or loss of
no share-of-cost
6 Medi-Cal coverage .
Page 18, lines 35-40:
35 (6) The individual is a dependent of an
enrolled eligible
36 employee who has lost or will lose his or
her coverage under the
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 10
37 Healthy Families Program, as a result of
exceeding the program's
38 income or age limits, coverage under the
AIM Program, or no
39 share-of-cost Medi-Cal coverage and
requests enrollment within
40 60 days of termination of that coverage.
Page 23, lines 17-29:
17 (C) He or she has lost or will lose
coverage under another
18 employer health benefit plan as a result of
termination of
19 employment of the individual or of a person
through whom the
20 individual was covered as a dependent,
change in employment
21 status of the individual, or of a person
through whom the individual
22 was covered as a dependent, the termination
of the other plan's
23 coverage, cessation of an employer's
contribution toward an
24 employee or dependent's coverage, death of
the person through
25 whom the individual was covered as a
dependent, legal separation,
26 divorce, loss of coverage under the Healthy
Families Program, as
27 a result of exceeding the program's income
or age limits, loss of
28 coverage under the AIM Program, or loss of
no share-of-cost
29 Medi-Cal coverage .
Page 25, lines 3-8:
3 (6) The individual is a dependent of an
enrolled eligible
4 employee who has lost or will lose his or
her coverage under the
5 Healthy Families Program, as a result of
exceeding the program's
6 income or age limits, coverage under the
AIM Program, or no
7 share-of-cost Medi-Cal coverage and
STAFF ANALYSIS OF ASSEMBLY BILL 1541 (Committee on Health)
Page 11
requests enrollment within
8 60 days after termination of that coverage.
2.Clarify intent. Staff recommends clarifying the intent of
the bill with the following amendment:
Page 2, lines 1-4:
1 SECTION 1. It is the intent of the
Legislature to enact
2 legislation that would implement align
state law with the a provision of Section 311 of
the federal
3 Children's Health Insurance Program
Reauthorization Act of 2009
4 (Public Law 111-3) that extends the period
of time that employees and dependents who lose
coverage under Medicaid (Medi-Cal in California)
or a state child health plan (Healthy Families
Program in California) have to enroll in group
coverage, if they are otherwise eligible, after
the date of termination of Medicaid or state
child health plan coverage.
POSITIONS
Support: 100 Percent Campaign
American Federation of State, County and Municipal
Employees, AFL-
CIO
United Ways of California
Oppose: None received
-- END --