BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1088 (Price)
Hearing Date: 5/27/2010 Amended: 4/13/2010
Consultant: Katie Johnson Policy Vote: Health 5-0
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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.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Premium increases approximately $85 millionGeneral/*
annually in the future if Special/
federal law were repealed
Other
CalPERS IT system updates potentially over $50 General/*
Special/
Other
*55 percent General Fund, 45 percent Special Funds and Other
Funds
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
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.
Since this is a federally imposed law, associated costs would be
due to federal law and not to this bill. However, if federal law
were to be repealed and these provisions were to remain in state
law, there would be state costs as described below.
This bill would require health care service plans and health
insurers 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. However, interim
federal rules provide that an employer may not treat these
dependents differently than those currently covered.
If the State of California, as an employer, were to pay the
employer's share of premiums for about 40,000 23 - 26 year olds,
it could cost the state up to approximately $85 million in total
funds that would be shared 55 percent General Fund, 45 percent
special funds and other funds to pay 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
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SB 1088 (Price)
comply with this bill and federal law. These costs would be
factored into CalPERS' proposed 2011 rate in the annual Budget
Act.
The proposed amendments would delete intent language related to
requiring all health plans and insurers to cover health, dental,
and vision benefits for dependents up to 26 years of age and
other language inconsistent with federal guidance.