BILL ANALYSIS
SB 1088
Page 1
SENATE THIRD READING
SB 1088 (Price)
As Amended August 20, 2010
Majority vote
SENATE VOTE :21-13
HEALTH 13-6 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Bradford, |
| |De La Torre, De Leon, | |Huffman, Coto, Davis, De |
| |Eng, Hayashi, Hernandez, | |Leon, Gatto, Hall, |
| |Jones, Bonnie Lowenthal, | |Skinner, Solorio, |
| |Nava, V. Manuel Perez, | |Torlakson, Torrico |
| |Salas | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Fletcher, Conway, Gaines, |Nays:|Conway, Harkey, Miller, |
| |Smyth, Audra Strickland, | |Nielsen, Norby |
| |Silva | | |
| | | | |
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SUMMARY : Prohibits, with specified exceptions, the limiting age
for dependents covered by health plan contracts and health
insurance policies from being less than 26 years of age
beginning on or after September 23, 2010, and prohibits health
plan contracts and health insurance policies from being required
to cover a child of a child receiving dependent coverage.
Specifically, this bill :
1)Prohibits the limiting age for dependents covered by health
plan contracts and health insurance policies from being less
than 26 years of age with respect to plan and policy years
beginning on or after September 23, 2010, except under
specified circumstances.
2)Permits, for plan and policy years beginning before January 1,
2014, group health plan contracts and group health insurance
policies that qualify as grandfathered health plans under
federal law, and that make available dependent coverage of
children, to exclude from coverage an adult child who has not
attained the age of 26 years only if the adult child is
eligible to enroll in an employer-sponsored health plan other
than a group health plan of a parent.
SB 1088
Page 2
3)Clarifies circumstances of coverage for young adults who
previously lost or were denied dependent health coverage,
consistent with the recently enacted federal Patient
Protection and Affordable Care Act (PPACA), and any additional
federal guidance or regulations issued by the U.S. Secretary
of Health and Human Services.
4)Requires health plans and health insurers to provide written
notice in accordance with 3) above and allows the notice to be
provided to the dependent's parent on behalf of the dependent.
Requires the notice to be prominent if it is included with
enrollment materials for a group plan or policy.
5)Provides that a dependent enrolling in a group plan or policy
for coverage pursuant to this bill must be treated as a
special enrollee, as specified.
6)Requires health plans and health insurers to offer the
recipient of the notice all of the benefit packages available
to similarly situated individuals who did not lose coverage by
reason of cessation of dependent status. Specifies that any
difference in benefits or cost-sharing requirements
constitutes a different benefit package.
7)Prohibits dependents enrolling in coverage provided by group
plan and policies pursuant to 6) above from being required to
pay more for coverage than similarly situated individuals who
did not lose coverage by reason of cessation of dependent
status.
8)Clarifies that nothing in this bill requires a plan contract
or insurance policy to cover a child of a covered dependent.
9)Prohibits this bill from being construed to modify the
definition of "dependent" for tax treatment purposes, as
specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, annual increased costs of $85 million General Fund to
the California Public Employees' Retirement System to provide
the employer share of health premium costs to 29,000 young
adults gaining access to health coverage through the increase in
the limiting age established by this bill.
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COMMENTS : According to the author, the recently enacted federal
PPACA, known as federal health reform, requires, among other
things, health plans and health insurers to expand coverage to
dependents up to age 26, beginning in September 2010. The
author states that this bill seeks to provide statutory
implementation guidelines to enable the state to comply with
federal law. The author maintains that young adults comprise
one of the largest and fastest-growing segments of the uninsured
population and often lose health coverage at ages 19-21 as a
result of being dropped from their parents' policies or losing
eligibility for public programs like Medi-Cal or Healthy
Families that become inaccessible to young, healthy, childless
adults. The author notes that one-third of college graduates
will spend some time uninsured in the year after graduation and
only about half of 19 to 29 year olds are eligible for coverage
offered by their employers. This bill conforms state statute to
federal law by preventing young adults who are enrolled on their
parents' insurance from being terminated prior to their 26th
birthday.
Among the broad and sweeping changes of the PPACA is a provision
to keep young adults covered. Starting September 2010, children
under 26 years of age will be allowed to stay on their parent's
family policy, or be added to it. Interim final regulations
issued by the federal Departments of Health and Human Services,
Labor, and Treasury, on May 13, 2010, provide guidance to
employers, group health plans, and group health insurance
issuers for implementing this provision. According to the
health reform Internet Web site managed by the federal
Department of Health and Human Services, many insurance
companies and employers have already agreed to implement the
dependent coverage provision early to avoid a gap in coverage
for new college graduates and other young adults.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097
FN: 0006354