BILL ANALYSIS
AB 2110
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Date of Hearing: May 19, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2110 (De La Torre) - As Amended: May 12, 2010
Policy Committee: Health Vote:13-6
Urgency: No State Mandated Local Program:
Yes Reimbursable:
SUMMARY
This bill requires individual health insurance and health plan
policies issued, amended, or renewed after January 1, 2011 to
provide a grace period of 50 days for the payment of each
premium. Under current law, the grace period is required to be
at least seven days for weekly premium policies, at least 10
days for monthly premium policies, and at least 31 days for all
other policies.
FISCAL EFFECT
No direct fiscal impact to the California Department of Managed
Health Care (DMHC) and California Department of Insurance (CDI)
to continue oversight of premium payment grace periods.
COMMENTS
Rationale . This bill extends the duration of grace periods
following non-payment of insurance premiums in the individual
health insurance market.
The author indicates this bill is in response to an issue
addressed in the Los Angeles Times in December of 2009. At that
time, Blue Shield had notified policy holders of individual
health insurance that the grace period for premium payments was
being shortened from 43 days to 28 days and that coverage could
be immediately dropped if a policyholder missed a single payment
following a grace period. Blue Shield informed policyholders
that once cancelled, they would be able to reapply for
insurance, but with potentially higher premiums and stricter
conditions. This bill clarifies related issues by extending
baseline grace periods for all insurers in the individual
AB 2110
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insurance market.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081