BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1088 (Price)
          
          Hearing Date:  5/17/2010        Amended: 4/13/2010
          Consultant: Katie Johnson       Policy Vote: Health 5-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  SB 1088 would require health care service plans  
          and health insurers that currently offer coverage to dependents  
          to offer that coverage to dependents who are less than 26 years  
          of age, pursuant to federal health care reform.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)
           Major Provisions         2010-11      2011-12       2012-13     Fund
                                                                  
          Premium increases        unknown, likely in the millions  
          General/*
                                   of dollars; depends on employer  
          Special/
                                   premium payment decision s          
          Other         

          CalPERS IT system updates       unknown, potentially over  
          $50General/*
                                                                 Special/
                                                                 Other
          *55 percent General Fund, 45 percent Special Funds and Other  
          Funds
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          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.
          This bill would implement a portion of the Patient Protection  
          and Affordable Care Act (PPACA), also know as federal health  
          care reform. PPACA requires health plans and insurance issuers  
          that offer dependent coverage to make that coverage available  
          until the adult child reaches the age of 26 beginning in the  
          policy or plan year after September 23, 2010.

          This bill would require health care service plans and health  
          insurers, collectively carriers, to offer dependent coverage  
          until a dependent's 26th birthday. Employers that provide group  










          health care coverage for employees, including the State of  
          California, would not be required to pay the dependent's  
          premium, but could choose to pay it.

          If the State of California, as an employer, were to choose to  
          pay the employer's share of premiums for the 23 - 26 year old  
          dependent population, it could cost the state up to  
          approximately $110 million in total funds that would be shared  
          55 percent General Fund, 45 percent special funds and other  
          funds to pay premiums for about 40,000 child dependents. As  
          employers, it is unclear whether or not the Senate, Assembly,  
          and the individual departments and agencies would decide  
          independently or collectively as legislative and executive  
          branches whether or not to pay the employer share of newly  
          eligible dependent premiums. The cost could be substantially  
          lower if most of the employers listed above chose not to pay the  
          premiums for this group and instead the dependents and their  
          families paid the full premiums. The California Public Employees  
          Retirement System (CalPERS), the entity that purchases health  
          care coverage on behalf of the state employees, could also see  
          unknown costs to update its computer systems to comply with this  
          bill and federal law.