BILL ANALYSIS �
AB 792
Page 1
Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 792 (Bonilla) - As Amended: April 14, 2011
As Proposed to be Amended
SUBJECT : Health Care Coverage: California Health Benefit
Exchange
KEY ISSUE : Should health plans, health insurers, employers, and
certain government entities, under certain circumstances,
disclose information about benefits under the California Health
Benefit Exchange to persons who are likely eligible for those
benefits?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
Among other things, the federal Patient Protection and
Affordable Care Act (PPACA) requires each state, by January 1,
2014, to establish a Health Benefit Exchange that makes
qualified health plans available to qualified individuals and
employers. In addition, it generally mandates that all persons
have some form of health coverage. State legislation enacted
last year began the process of complying with federal law by
creating and setting forth the powers and duties of the
California Health Benefit Exchange. This bill is in many ways a
follow-up to last year's legislation in that it seeks to ensure
maximum participation in the Exchange by requiring various
private and public entities to notify persons who would likely
qualify for benefits under the Exchange and, conversely, to
notify the Exchange about persons who might be eligible. This
bill passed out the Assembly Health Committee on a 13-6 vote.
It is sponsored by Health Access California and is supported by
a broad array of medical, labor, and consumer groups. There is
no known opposition to the bill. The author committed to
several amendments in the Assembly Health Committee to be taken
in this Committee. These amendments are reflected in the
mock-up and in this analysis.
SUMMARY : Requires the disclosure of information on health care
coverage through the California Health Benefit Exchange
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(Exchange) under specified circumstances, by health care service
plans, health insurers, employers, employee associations, the
Employment Development Department, and family courts, to an
individual or to the Exchange, as specified, in order to
encourage maximum participation in the Exchange. Specifically,
this bill :
1)Requires family courts, upon the filing of a petition for
dissolution of marriage, nullity of marriage, or legal
separation, to provide to the petitioner and the respondent
with a specified notice regarding potential eligibility for
health care coverage through the Exchange. Requires family
courts to provide that same notice to petitioners upon the
filing of a petition for adoption.
2)Requires health care service plan contracts and insurance
policies, except as specified, that are issued, amended,
delivered or renewed after January 1, 2014, that provide
medical and hospital coverage under an employer-sponsored
group plan for an employer subject to COBRA, or an employer
group for which the plan is required to offer Cal-COBRA
coverage, to transfer information to the Exchange in order to
initiate application for enrollment for a former employee or
former dependent of the employee. Requires the plan or
insurer to obtain consent of the enrollee or subscriber, as
specified. If the individual declines consent, the plan or
insurer shall not transfer any information regarding that
individual to the Exchange. Imposes substantially the same
requirements on a plan or insurer that provides medical and
hospital coverage to an individual.
3)Requires health plans, insurers, employers, employee
associations, and other entities, at the time a contract or
policy is issued, amended, delivered, or renewed on or after
January 1, 2012, to obtain the consent of the enrollee or
subscriber to provide the minimum necessary information to the
Exchange in the event that the individual or dependent ceases
to be enrolled or covered.
4)Requires health plans and insurers to provide to the Exchange
with certain information, including the name or names, most
recent address, and any other information, in a manner
prescribed by the Exchange, regarding a former employee or
individual who chose not to continue coverage.
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5)Requires, between January 1, 2012 and December 31, 2013, a
health plan or insurer to notify certain employees, members,
former employees, spouses, or former spouses about purchasing
coverage in the individual market and the consideration of
pre-existing conditions by health plans and insurers.
Requires this notification to also be provided by an employer,
employee association, or other entity otherwise providing
hospital, surgical, or major medical benefits to its employees
or members to employees, members, former employees, spouses,
or former spouses.
6)Requires, after January 1, 2014, a health plan or insurer to
notify employees, members, former employees, spouses, or
former spouses (in the case of group coverage) and to
individuals, dependents, or former dependents (in the case of
individual coverage), informing that person about coverage
opportunities through the Exchange and that an application for
such coverage has been made.
7)Requires EDD to provide information about coverage
opportunities through the Exchange to individuals who file a
new claim for unemployment compensation. Provides that the
sharing of this information initiates an application for
enrollment in coverage through the Exchange. Requires the
Exchange to seek approval from the United States Department of
Health and Human Services to transfer the minimum information
necessary to initiate an application for enrollment for
coverage through the Exchange.
8)Requires EDD to provide an individual who files a new claim
for disability benefits, whether or not he or she is eligible
for benefits, a notification informing him or her about
coverage available through the Exchange.
9)Requires an individual, in order to decline health care
coverage from the Exchange under the provisions of this bill,
to notify the Exchange in writing within 63 calendar days of
the date of termination of coverage.
EXISTING LAW :
1)Provides for the regulation of health plans by the Department
of Managed Health Care, under provisions of the Health &
Safety Code, and for the regulation of health insurers by the
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Department of Insurance, under provisions of the Insurance
Code.
2)Requires, under the federal Patient Protection and Affordable
Care Act (PPACA), each state, by January 1, 2014, to establish
an American Health Benefit Exchange that makes qualified
health plans available to qualified individuals and employers.
(Public Law 111-148.)
3)Establishes, in accordance with PPACA, the California Health
Benefit Exchange (Exchange) and specifies the powers and
duties of its governing board relative to determining
eligibility for enrollment in the Exchange, arranging for
coverage under qualified health plans, and facilitating the
purchase of qualified health plans through the Exchange by
qualified individuals and small employers. (Government Code
Section 100500 et seq.)
4)Imposes specified requirements on health plans and health
insurers that provide coverage under an employer-sponsored
group plan subject to requirements under COBRA or Cal-COBRA,
as defined, and imposes specified requirements on employers or
employee associations to notify current and former employees,
and their dependents, about options for continuation or
conversion of coverage. (Health & Safety Code Sections 1373.6
and 1373.621; Labor Code Section 2800.2.)
5)Provides for the distribution of unemployment compensation or
disability benefits by Employment Development Department
(EDD). (Unemployment Insurance Code Sections 301-336.)
6)Sets forth procedures related to a petition for dissolution of
marriage, nullity of marriage, or legal separation, or a
petition for adoption. (Family Code Sections 2000-2452 and
Sections 8500-9212.)
COMMENTS : Signed into law by President Obama on March 23, 2010,
the federal Patient Protection and Affordable Care Act (PPACA)
is arguably the most comprehensive effort to extend health
coverage to American citizens since the landmark Medicare and
Medicaid programs of the 1960s. Among other things, PPACA
requires each state, by January 1, 2014, to establish a "Health
Benefit Exchange" that makes qualified health coverage plans
available to qualified individuals and employers. PPACA also
generally mandates that everyone have health insurance. Last
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year, AB 1602 (Chapter 655, Statutes of 2010) and SB 900
(Chapter 659, Statutes of 2010) established the structures and
duties of the California Health Benefit Exchange (Exchange) to
comply with the mandate on the states. This bill seeks to
facilitate compliance with the individual mandate by providing
information to persons most likely to be eligible for benefits
under the Exchange. Under specified circumstances, especially
when some "life changing circumstance" occurs - such as a
divorce, adoption, or loss of employment-based insurance - the
bill would require various public and private entities to
provide information about the Exchange to certain individuals
or, conversely, to provide the Exchange with information about
potentially eligible individuals.
Fundamentally, the purpose of the Exchange is to create an
effective purchasing pool that will enhance the bargaining power
of small businesses and individuals who, for a variety of
reasons, cannot participate in group health plans and cannot
afford individual policies. As is true of any insurance pool,
the Exchange will be more effective and efficient if all
eligible persons actually participate. This bill seeks to
ensure that the Exchange will operate at maximum effectiveness
by attempting to identify and notify persons most likely to
qualify for benefits, especially those going through "life
changing circumstances" that are often identified with loss of
coverage or a change in eligibility, such as a divorce,
adoption, or losing a job. To make sure that persons in these
situations are aware of their possible eligibility under the
exchange, this bill would do the following:
Require insurers and health plans to initiate enrollment into
the Exchange or the existing COBRA program when certain events
occur, such as loss of employment-based coverage or loss of a
spouse or parent.
Require employers to provide notice to the Employment
Development Department (EDD) of termination of employment. In
turn, this bill would require the EDD to provide notice to the
Exchange so that the Exchange can initiative an application
(or pre-enroll) persons whose employment has been terminated
(subject to the person's right to reject enrollment.) The
bill would also require the EDD to provide appropriate notices
and/or initiate applications when persons apply to the EDD for
disability or unemployment benefits.
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Require courts to provide information about coverage under the
Exchange to persons seeking dissolution or nullification of a
marriage, a legal separation, or who are petitioning for
adoption of a child.
Privacy Issues Appear to Have Been Addressed : As with any
measure or policy that requires disclosure of personal
information - especially information about a person's health
coverage and employment status - this bill raises potential
privacy issues. Most notably, the "privacy rule" under the
federal Health Insurance Portability and Accountability Act
(HIPAA) generally prohibits the disclosure of an individual's
"personal health information" - including any information that
relates to payment for provision of care or any information
created by a health plan or insurer - without that person's
consent. (45 CFR 160.103.) However, this privacy rule is
subject to many exceptions, including where such disclosure is
required by law and the disclosure complies with the
requirements of that law. (45 CFR 164.512(a).)
Proposed amendments reflected in the mock-up and to be taken
today in the Committee have added additional language to ensure
that any transmission of information will comply with HIPAA.
For example, amendments to the provisions that require health
plans and insurers to send information to the Exchange will
require that health plan contracts and insurance policies obtain
the consent of the enrollee or insured's to provide "the minimum
necessary information to the Exchange" and specifies that if the
individual declines consent, "then the plan shall not transfer
any information regarding that individual to the exchange." The
amendments additionally require that any manner of transmission
of information shall be consistent with the manner provided in
PPACA.
ARGUMENTS IN SUPPORT : Health Access California, the sponsor of
this bill, argues that AB 792 will create mechanisms to maximize
enrollment and participation in the California Health Benefits
Exchange when in begins operation on January 1, 2014. The
sponsor notes that the bill will achieve this by targeting
persons who are facing "life changing circumstances" that often
result in a loss of health care coverage or a change in economic
status that affects eligibility. Although loss of employment is
easily the most significant life-changing circumstance in this
regard, others include a loss of a parent or spouse due to death
or divorce, graduating from college or otherwise "aging out" of
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coverage through one's parents, or adopting a child. The
sponsor notes that although all of these life changing
situations cause persons to become uninsured, state policy does
little to reach out to such persons or inform them about
benefits for which they might be eligible. This bill, the
sponsor contends, is designed to do just that.
The California Labor Federation (CLF) notes that California has
lost 1.4 million jobs since the recession began in 2007,
creating a corresponding loss of employer-based health insurance
for both the employees and dependent family members. CLF
believes that "AB 792 will help Californians to access health
coverage during times of transition by creating a mechanism for
automatic enrollment."
The Western Center on Law & Poverty (WCLP) notes that, in light
of the mandates created by the new federal health care law, "it
is more important than ever to educate people about subsidized
health coverage programs and take steps to enroll them in that
coverage." This bill, WCLP believes, "advances that goal by
targeting the life transitions where people are most likely to
lose coverage and requires that they be sent information about
coverage options during those key transition points."
The California Primary Care Association (CPCA), representing a
network of over 80,000 private, non-profit community health
clinics and health centers statewide, believe this bill will
have a direct impact on the services that their member clinics
provide by making sure their patient population is notified of
their options under the California Health Benefit Exchange and
Medi-Cal. CPCA adds that this bill will help to ensure
continuity of care by ensuring continuity of coverage.
The California Medical Association (CMA) writes that its
physicians "support mechanisms to streamline health coverage
enrollment for eligible individuals and strongly support
expanding coverage to California's uninsured through a
state-based health insurance exchange that provides competition
between plans that offer quality care and access through a
robust provider networks."
Pending Related Legislation : AB 714 (Atkins), 2011-2012
session, requires notification about benefits under California
Health Benefit Exchange to individuals who have ceased to be
enrolled in various public health programs, including Healthy
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Families, Access for Infants and Mothers, and the California
Major Risk Medical Insurance Program. AB 714 would also require
notification about the Exchange to persons currently receiving
services under certain disease-based programs, such the Aids
Drug Assistance Program, the federal Ryan White HIV/AIDS
Treatment Extension Act, the FamilyPACT program, and the Breast
and Cervical Cancer Treatment Program. AB 714, like the bill
before this Committee, seeks to create mechanisms for ensuring
that persons most likely to be eligible for benefits under the
Exchange will be aware of that eligibility. That bill recently
passed out the Assembly Health Committee on a 13-6 vote.
REGISTERED SUPPORT / OPPOSITION :
Support
Health Access California (sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Labor Federation
California Medical Association
California Pan-Ethnic Health Network
California Primary Care Association
California Rural Assistance Foundation
Children NOW
Children's Defense Fund California
Consumers Union
Having Our Say
National Association of Social Workers
PICO California
SEIU California
The 100% Campaign
The Children's Partnership
Unitarian Universalist Legislative Ministry Action Network, CA
United Nurses Association of California/Union of Health Care
Professionals
Western Center on Law and Poverty
Opposition
None on file
AB 792
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Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334