BILL ANALYSIS                                                                                                                                                                                                    �






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                       Senator Ed Hernandez, O.D., Chair


          BILL NO:       AB 792                                      
          A
          AUTHOR:        Bonilla                                     
          B
          AMENDED:       May 27, 2011                                
          HEARING DATE:  June 29, 2011                               
          7
          REFERRAL:      Judiciary                                   
          9
          CONSULTANT:                                                
          2
          Bain                                                       
                                                                     
                                     SUBJECT
                                         
            Health care coverage: California Health Benefit Exchange  


                                    SUMMARY  

          Requires, effective January 1, 2013, courts, health plans, 
          health insurers, employers, and the Employment Development 
          Department (EDD) to provide a notice of the availability of 
          coverage in the California Health Benefit Exchange 
          (Exchange), effective January 1, 2014.  Requires health 
          plans, health insurers, and employers, for employees or 
          dependents who have experienced a death, loss of employment 
          or a reduction in hours, divorce or the loss of dependent 
          status that results in a loss of health insurance, to 
          transfer information to the Exchange to initiate an 
          application for enrollment in the Exchange if the 
          individual consents.  Requires an individual electing to 
          decline coverage from the Exchange to elect to do so in 
          writing.  


                             CHANGES TO EXISTING LAW  
          
          Existing federal law:
          Requires, under the federal Patient Protection and 
          Affordable Care Act (PPACA) (Public Law 111-148), as 
                                                         Continued---



          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          2


          

          amended by the Health Care Education and Reconciliation Act 
          of 2010 (Public Law 111-152), each state, by January 1, 
          2014, to establish an American Health Benefit Exchange 
          (AHBE) that makes qualified health plans available to 
          qualified individuals and qualified employers.  If a state 
          does not establish an AHBE, the federal government 
          administers the AHBE.  Federal law establishes requirements 
          for the AHBE, for health plans participating in the AHBE, 
          and defines who is eligible to receive coverage in the 
          AHBE.  Among other duties, the AHBE is required to inform 
          individuals of eligibility requirements for the Medicaid 
          program (Medi-Cal in California), the Children's Health 
          Insurance Program (the Healthy Families Program, or HFP, in 
          California), or any applicable state or local public 
          program.  The AHBE is required if, through screening of the 
          application, the AHBE determines that such individuals are 
          eligible for any such program, to enroll such individuals 
          in such program.
          Allows through PPACA, effective January 1, 2014, eligible 
          individual taxpayers whose household income equals or 
          exceeds 100 percent, but does not exceed 400 percent of the 
          federal poverty level (FPL), an advanceable and refundable 
          tax credit for a percentage of the cost of premiums for 
          coverage under a qualified health plan offered in the 
          Exchange.  PPACA also requires a reduction in cost-sharing 
          for individuals with incomes below 250 percent of the FPL, 
          and a lower maximum limit on out-of-pocket expenses for 
          individuals whose incomes are between 100 percent and 400 
          percent of the FPL.  Legal immigrants with household 
          incomes less than 100 percent of the FPL who are ineligible 
          for Medicaid because of their immigration status are also 
          eligible for the premium tax credit and the cost-sharing 
          reductions. 

          Requires, through PPACA, numerous changes to Medicaid, 
          including expanding eligibility to adults without minor 
          children with incomes equal to or less than 133 percent of 
          the FPL, disregarding (or not counting) an additional five 
          percent in income (making the Medicaid income eligibility 
          effectively 138 percent of the FPL), eliminating the asset 
          test and switching to a new method for calculating income 
          known as modified adjusted gross income (MAGI) for certain 
          populations.  
          
          Requires, through PPACA, each individual (with specified 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          3


          

          exceptions), and any dependent of the individual, to 
          maintain minimum essential coverage, provides exemptions 
          from the individual mandate (such as for affordability, 
          hardship, and for individuals with incomes below the income 
          tax filing threshold), and establishes penalties for 
          violations.

          Existing state law:
          Requires health plans and health insurers that provide 
          coverage to small employers with 2 to 19 eligible employees 
          to offer continuation coverage to a qualified beneficiary 
          (QB) upon a qualifying event without evidence of 
          insurability.  Requires the QB, upon election, to be able 
          to continue his or her coverage under the group benefit 
          plan.  This body of law is known as Cal-COBRA.

          Requires employers, employee associations, or other 
          entities to notify its current and former employees or 
          members and dependents of federal COBRA continuation 
          coverage (which requires continuation coverage be offered 
          to QB experiencing a qualifying event in firms with 20 or 
          more employees) and state law conversion coverage options. 

          Regulates the distribution of unemployment compensation or 
          disability benefits by the Employment Development 
          Department (EDD). 

          Sets forth, under the Family Code, procedures related to a 
          petition for dissolution of marriage, nullity of marriage, 
          or legal separation, or a petition for adoption.

          Establishes the Exchange in state government, and specifies 
          the duties and authority of the Exchange.  Requires the 
          Exchange be governed by a board that includes the Secretary 
          of the Health and Human Services Agency and four members 
          with specified expertise who are appointed by the Governor 
          and the Legislature.  



          This bill:
           Notice of availability of coverage through Exchange and 
          Medi-Cal
           Requires a notice to be provided to individuals that they 
          may be eligible for reduced-cost coverage through the 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          4


          

          Exchange and for no-cost coverage through Medi-Cal if the 
          individual is low income, in the following circumstances:

          � By the court, on and after January 1, 2013, upon the 
            filing of a petition for dissolution of marriage, nullity 
            of marriage, or legal separation, to the petitioner and 
            the respondent.


          � By the court, on and after January 1, 2013, upon the 
            filing of a petition for adoption, to the petitioner.


          � By the Employment Development Department (EDD), upon the 
            filing of a new claim for disability benefits, to the 
            claimant.


           Health plans and insurers, employers, and Exchange coverage 


           Requires, on and after January 1, 2014, group health plans, 
          health insurers, employers, employee associations, or other 
          entities otherwise providing hospital, surgical or major 
          medical benefits to its employees or members, to provide 
          notification to employees, members, former employees, 
          dependents, or former dependents that because the 
          individual is no longer enrolled in employer coverage:

          � That an application for coverage through the Exchange has 
            been made;


          � That the individual is not required to accept coverage 
            from the Exchange, and, 


          � That if the individual is low income, he or she may 
            qualify for Medi-Cal.


          Requires, to decline health care coverage from the 
          Exchange, individuals to notify the Exchange in writing 
          within 63 calendar days of the date of termination of group 
          coverage.




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          5


          


           
          Transfer of information to the Exchange by health plans, 
          insurers, and employers
           Requires employers, employee associations, other entities 
          providing medical benefits, health plans, and health 
          insurers to transfer information to the Exchange in order 
          to initiate an application for enrollment in the Exchange 
          for a former employee or former dependent of an employee.  

          Requires these entities to provide to the Exchange 
          information regarding the former employee and any 
          dependents covered, including the name or names, most 
          recent address, and any other information that is in the 
          possession of the these entities that the Exchange may 
          require, in a manner to be prescribed by the Exchange.  
          Requires the information to be provided in a manner 
          consistent with a specified provision of the federal PPACA 
          dealing with procedures for determining Exchange 
          eligibility.

          Requires these entities to obtain the consent of the 
          enrollee to provide the minimum necessary information to 
          the Exchange in the event that the individual or dependent 
          ceases to be enrolled in coverage.  Prohibits these 
          entities from transferring any information regarding the 
          individual to the Exchange if the individual does not 
          provide his or her consent.

          Requires the provision of this information to initiate an 
          application for enrollment in coverage through the 
          Exchange.

          Requires individual health plans and insurers to provide to 
          the Exchange information regarding previously covered 
          individuals and any dependents that chose not to renew 
          individual coverage.  Requires the information provided to 
          include the name or names, most recent address, and any 
          other information that is in the possession of the plan and 
          that the Exchange may require in a manner to be prescribed 
          by the Exchange.  Requires the information to be provided 
          in a manner consistent with a specified provision of PPACA 
          dealing with procedures for determining eligibility for the 
          Exchange.





          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          6


          

           Notice requirement for individuals leaving group coverage
           Requires, from January 1, 2012, until December 31, 2013, 
          group health plans and group health plans, employers, 
          employee associations and other entities providing 
          hospital, medical, surgical or major medical benefits to 
          its employees or members, to provide a notification to 
          employees, members, former employees, spouses, or former 
          spouses to examine their coverage options before declining 
          coverage, that individual policies require a review of an 
          individual's medical history that can result in a higher 
          premium or denial of coverage, and that children under 19 
          years of age cannot be denied individual coverage based on 
          medical history, but may pay a higher premium depending on 
          medical history.

           EDD requirements 
           Requires EDD, on and after January 1, 2014, when an 
          individual, files a new claim for unemployment 
          compensation, to provide to the Exchange the name, address, 
          and any other identifying information that is in the 
          possession of EDD as the Exchange may require, in a manner 
          to be prescribed by the Exchange.  Requires the Exchange to 
          seek approval from the federal Department of Health and 
          Human Services (DHHS) to transfer the minimum information 
          necessary to initiate an application for enrollment in the 
          Exchange.  Requires the provision of this information to 
          initiate an application for enrollment in the Exchange.  

          Requires a disclosure to be provided to such individuals 
          that an application for coverage through the Exchange has 
          been made, that the individual is not required to accept 
          coverage from the Exchange, and that coverage through the 
          Exchange will be based on income.

          Requires an individual, to decline health care coverage 
          through the Exchange, to elect to do so by notifying the 
          Exchange in writing. 

          Requires EDD, on and after January 1, 2014, when an 
          individual files a new claim for unemployment compensation, 
          to provide to the Exchange the name, address, and any other 
          identifying information that is in the possession of EDD as 
          the Exchange may require, in a manner to be prescribed by 
          the Exchange.  Requires the Exchange to seek approval from 
          DHHS to transfer the minimum information necessary to 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          7


          

          initiate an application for enrollment through the 
          Exchange.  Requires the provision of this information to 
          initiate an application for enrollment in coverage through 
          the Exchange.

          Requires EDD to provide notice to individuals filing a new 
          claim for unemployment compensation that an application for 
          health care coverage through the Exchange has been made for 
          them, that they are not required to accept coverage, and 
          that Exchange coverage will be based on their income.

          Requires an individual, to decline health care coverage 
          through the Exchange, to do so by notifying the Exchange in 
          writing.

          Requires the above-described EDD provisions to be 
          consistent with federal guidance and to be operative only 
          to the extent that it is funded out of non-General Fund 
          moneys.

          Requires EDD, when an individual files a new claim for 
          disability benefits, to provide a notice that individuals 
          can obtain coverage through the Exchange beginning in 2014, 
          and what an individual pays for coverage will depend on his 
          or her income.
          

                                  FISCAL IMPACT  

          According to the Assembly Appropriations Committee:

          1)Estimated costs in the range of $800,000 to $3 million 
            annually (special fund) to EDD to provide notifications, 
            depending upon the number of individuals seeking 
            unemployment benefits.  Unknown, potentially significant 
            state information technology costs (special fund) to 
            transfer data from EDD to the Exchange.  It is unknown 
            whether federal grant funding available for Exchange 
            activities would be available for this purpose. 

          2)Minor, absorbable costs to the family court system to 
            provide notifications.  

          3)If screening and enrollment is conducted upon provision 
            of information about potential enrollees, there could be 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          8


          

            significant state screening and enrollment costs to the 
            Exchange and/or Medi-Cal that would otherwise not occur, 
            in the range of millions to tens of millions of dollars 
            annually.  Potentially significant state Medi-Cal costs, 
            if more individuals enroll in Medi-Cal more quickly than 
            would otherwise occur.  If individuals are found to be 
            eligible for Medi-Cal under existing eligibility rules, 
            the cost associated with these individuals will be funded 
            50 percent through the General Fund.  Medi-Cal costs for 
            newly eligible individuals are 100 percent federally 
            funded through 2016.

          4)Reduced cost pressure to counties to fund otherwise 
            uncompensated care, to the extent this bill results in 
            more individuals enrolled more quickly into comprehensive 
            health care coverage.


                            BACKGROUND AND DISCUSSION  

          According to the author, in 2014 and thereafter, a 
          component of the federal PPACA institutes an individual 
          mandate provision, which requires everyone to have health 
          insurance.  The author states that this bill helps ensure 
          that Californians comply with the individual mandate even 
          when they are faced with life-changing situations, such as 
          filing for unemployment, divorce, adoption, and loss of 
          employment-based coverage.  The author states this bill 
          ensures the design of the Exchange and redesign of Medi-Cal 
          take into account the need to serve the short-term 
          uninsured as well as provide long-term coverage.  According 
          to the author, this bill will ensure Californians are 
          provided notices and that they are pre-enrolled into either 
          the Exchange or Medi-Cal.  The author states this bill is a 
          new idea that has not been done in any state, and builds 
          upon the current COBRA law by requiring notification of 
          continued coverage options.  The author concludes that this 
          bill attempts to address future problems by ensuring 
          seamless transition for individuals who go through 
          life-changing situations.  The author notes that the 
          uninsured rate is a problem that continues to grow, but 
          that in 2014, losing coverage because an individual lost 
          his or her job or got divorced will no longer mean being 
          uninsured. 





          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          9


          

          Federal health care reform and the Exchange
          Federal health care reform makes numerous changes to reduce 
          the number of uninsured Americans.  According to estimates 
          in a recent study in the health policy journal Health 
          Affairs by Peter Long and Jonathan Gruber, PPACA will 
          provide health insurance for an additional 3.4 million 
          people in California in 2016.  The authors state this will 
          mean that nearly 96 percent of documented residents of 
          California under age 65 will be insured.  The authors 
          estimate enrollment in Medi-Cal is expected to increase by 
          1.7 million people, while 4.0 million people are expected 
          to enroll in the state's Exchange.  Employer-sponsored 
          insurance and spending on health insurance will decline 
          slightly.  The authors conclude that low-income households 
          will experience substantial financial benefits, but 
          families at the highest income levels will pay more.
          
          Related legislation
          AB 43 (Monning) would require DHCS, by January 1, 2014, to 
          establish eligibility for Medi-Cal benefits for any person 
          who meets the requirements of a new Medicaid eligibility 
          category added by PPACA, in effect expanding Medi-Cal 
          coverage to persons with income that does not exceed 133 
          percent of the FPL.  AB 43 is on the inactive file on the 
          Assembly Floor.

          AB 714 (Atkins) would establish notification requirements 
          to individuals who are enrolled in, or who cease to be 
          enrolled in, publicly funded state health care programs, 
          would require an application for coverage to be made on 
          their behalf through the Exchange, and would allow 
          individuals to decline health care coverage in a manner to 
          be prescribed by the Exchange.  SB 714 is scheduled to be 
          heard in the Senate Health Committee on June 29, 2011 and 
          is double-referred to the Senate Judiciary Committee.

          AB 1296 (Bonilla) would enact the Health Care Eligibility, 
          Enrollment, and Retention Act and would require, by January 
          1, 2012, the California Health and Human Services Agency, 
          in consultation with DHCS, Managed Risk Medical Insurance 
          Board, the Exchange, counties, health care services plans, 
          consumer advocates, and other stakeholders to undertake a 
          planning process to develop plans and procedures to 
          implement PPACA related to eligibility, enrollment, and 
          retention with regard to public health coverage programs, 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          10


          

          and would make various changes to eligibility processing.  
          AB 1296 is scheduled to be heard in the Senate Health 
          Committee on July 6, 2011.
          

          Prior legislation
          SB 900 (Alquist), Chapter 659, Statutes of 2010, 
          establishes the Exchange as an independent public entity 
          within state government, and requires the Exchange to be 
          governed by a board composed of the Secretary of California 
          Health and Human Services Agency, or his or her designee, 
          and four other members appointed by the Governor and the 
          Legislature who meet specified criteria.  

          AB 1602 (John A. P�rez), Chapter 655, Statutes of 2010, 
          specifies the powers and duties of the Exchange relative to 
          determining eligibility for enrollment in the Exchange and 
          arranging for coverage under qualified health plans, 
          requires the Exchange to provide health plan products in 
          all five of the federal benefit levels (platinum, gold, 
          silver, bronze and catastrophic), requires health plans 
          participating in the Exchange to sell at least one product 
          in all five benefit levels in the Exchange, requires health 
          plans participating in the Exchange to sell their Exchange 
          products outside of the Exchange, and requires health plans 
          that do not participate in the Exchange to sell at least 
          one standardized product designated by the Exchange in each 
          of the four levels of coverage, if the Exchange elects to 
          standardize products.
          
          Arguments in support
          This bill is sponsored by Health Access California (HAC), 
          which writes that this bill would create mechanisms to 
          maximize enrollment in coverage of those who face life 
          changes such as loss of a job or loss of dependent coverage 
          due to loss of a spouse.  HAC states that any Californian 
          can become uninsured because of a change in life 
          circumstance (such as aging-off coverage, losing or 
          switching a job, divorce, death or moving), yet state 
          policy does relatively little to help people stay on 
          coverage other than to require the provision of a notice of 
          their ability to continue coverage.  HAC states that, in 
          2014, every one of these individuals is eligible for 
          coverage either in the Exchange or Medi-Cal, yet no 
          mechanism exists to connect these individuals to coverage.  




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          11


          

          HAC states that less than half the uninsured are uninsured 
          for less than a year, almost a quarter of the uninsured for 
          are uninsured one to two years, and the remaining third are 
          uninsured for more than two years.  The design of the 
          Exchange and redesign of Medi-Cal/Healthy Families needs to 
          into take account the need to serve the short-term 
          uninsured as well as providing long-term coverage in order 
          to keep Californians covered and healthy.  

          HAC states this bill would connect to people to the 
          Exchange by providing notice in 2012 and 2013 that low-cost 
          or no-cost coverage will be available through the Exchange 
          and Medi-Cal effective 2014.  Beginning in January 1, 2014, 
          this bill would require insurers and health plans to 
          initiate enrollment into the Exchange as well as COBRA for 
          COBRA-qualifying events, including loss of employment-based 
          coverage, loss of coverage due to loss of a spouse or 
          parent and other COBRA qualifying events.  HAC concludes 
          that in 2014, there is no reason why losing one's job or 
          getting divorced should mean losing health coverage as 
          millions of Californians will be eligible for coverage 
                                                                                       through the Exchange or Medi-Cal, and this bill will help 
          those Californians get coverage when they need it and when 
          the law requires it.

          Arguments in opposition
          This bill is opposed by the California Association of 
          Health Plans and the Association of California Life and 
          Health Insurance Companies (ACLHIC).  ACLHIC states that 
          this bill requires an insurer to obtain the consent of its 
          insureds to share their information with the Exchange, yet 
          provides no direction as to how to meet that obligation if 
          the individual is simply nonresponsive.  ACLHIC states 
          that, in a day of heightened privacy concerns, many 
          individuals may be reluctant to give consent to share their 
          personal information, and ACLHIC is concerned about 
          potential liability to the insurer that is required to 
          obtain and maintain this information.  ACLHIC states this 
          bill should be amended to provide protection to the insurer 
          that forwards such information to the Exchange in 
          accordance with the requirements of the bill.  ACLHIC also 
          argues this bill requires insurers to send multiple and 
          duplicative notices to an insured of their right to enroll 
          in the Exchange with every change in the insured's 
          coverage, and that this bill should be amended to include 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          12


          

          its required notice with Cal COBRA notices in the manner 
          that they are currently required to be sent to insured 
          individuals.  ACLHIC states this would be consistent with 
          all other notices of coverage rights, and would not only be 
          cost effective, but less confusing to the insured. 


                                  PRIOR ACTIONS

           Assembly Health     13- 6
          Assembly Judiciary  7- 2
          Assembly Appropriations11- 6
          Assembly Floor 50- 26


                                     COMMENTS
           
          1.  Coverage opt in. Under current law, the Exchange is 
          required to inform individuals of the eligibility 
          requirements for the Exchange, Medi-Cal, Healthy Families, 
          or any applicable state or local public program.  The 
          Exchange is required, through screening of the application, 
          if the Exchange determines that such individuals are 
          eligible for any such program, to enroll such individuals 
          in such program.

          This bill requires health plans, health insurers, employers 
          and EDD, beginning July 1, 2013, to provide an additional 
          notice that an application for coverage through the 
          Exchange is being made for the individual.  This bill 
          requires an individual to have the opportunity to decline 
          health care coverage by notifying the Exchange in writing.

          In effect, people are "opted in" to applying for coverage 
          through the Exchange but allowed to decline coverage.  The 
          advantage of this method is it will increase the likelihood 
          that people will have continuity of care through continuous 
          coverage, reduce gaps in coverage, and increase the 
          likelihood of compliance with the individual mandate 
          requirement in PPACA.  

          However, individuals may wish to affirmatively enroll 
          (rather than being opted in and having to decline coverage) 
          because the individual has become Medicare-eligible, or has 
          obtained job-based coverage through a new employer.  For 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          13


          

          individuals moving to coverage in the Exchange that they 
          have to pay out-of-pocket for, the Exchange would have to 
          determine whether individuals are enrolled in coverage in 
          advance or after paying premiums, and would have to develop 
          a methodology to enroll individuals in a particular health 
          plan if they are eligible for coverage in the Exchange (the 
          Exchange has to offer at least four tiers of products).

          2.  Proposed author's amendments
             a)   Author's amendments to mirror Cal-COBRA 
               notification requirements.  The author is proposing to 
               amend this bill to require one of the notices that 
               health plans and health insurers providing group 
               coverage must furnish, and this notice requirement 
               would apply in a manner similar to the Cal-COBRA 
               notification requirement in existing law.  Cal-COBRA 
               requires health plans and insurers that provide 
               coverage under a group benefit plan to an employer 
               with 2 to 19 eligible employees, to offer continuation 
               coverage to a qualified beneficiary (QB), upon a 
               qualifying event, without evidence of insurability 
               (meaning the individual cannot be turned down for 
               coverage).  Existing state law defines, for purposes 
               of eligibility for Cal-COBRA, a "qualifying event" as 
               any of the following events that would result in a 
               loss of group coverage by a QB if the person did not 
               elect Cal-COBRA coverage:
          
               �      The death of the covered employee;
               �      The termination of employment or reduction in 
                 hours of the covered employee's employment, except 
                 that termination for gross misconduct does not 
                 constitute a qualifying event;
               �      The divorce or legal separation of the covered 
                 employee from the covered employee's spouse;
               �      The loss of dependent status by a dependent 
                 enrolled in the group benefit plan; and
               �      With respect to a covered dependent only, the 
                 covered employee's entitlement to benefits under 
                 Medicare.

               Under the author's proposed amendments, health plans 
               and insurers covering groups (not limited to 
               businesses with 2 to 19 employees as in Cal-COBRA) 
               would have to provide this notice to QBs who 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          14


          

               experience a qualifying event.  In addition, this bill 
               would require the notice to be provided if a QB is 
               terminated for gross misconduct because the individual 
               mandate would apply to these individuals unless they 
               were otherwise exempt under federal law.   

             a)   Author's amendments to revise other notices.  The 
               author is proposing amendments to revise the other two 
               notices required by this bill intended to make the 
               notices clearer and more understandable.  The first 
               notice, required to be provided beginning January 1, 
               2013, informs individuals that they may obtain 
               coverage through the Exchange effective January 1, 
               2014.  The author's proposed amendments delete the 
               specific reference to no-cost coverage through 
               Medi-Cal, and shorten the notice.  The second notice 
               tells individuals who are no longer enrolled in 
               employer coverage that an application for coverage has 
               been made for them through the Exchange.  The 
               amendments reword the notice, including telling 
               individuals that they will be contacted by the 
               Exchange to complete the application.  These changes 
               are intended to make the notices clearer and more 
               understandable.  

             b)   Author's amendment to allow the wording of 
               statutorily worded notices to be changed.  This bill 
               places in statute the notices that are to be provided 
               to individuals.  Existing law, as enacted by AB 1540 
               (Committee on Health), Chapter 298, Statutes of 2011, 
               among several provisions, gives the director of the 
               Department of Managed Health Care (DMHC) the authority 
               to adopt a regulation to modify the wording of any 
               notice required by the Knox-Keene Act for purposes of 
               clarity, readability, and accuracy, except that a 
               modification cannot change the substantive meaning of 
               the notice.  The author is proposing amendments to 
               permit DMHC, the California Department of Insurance 
               and EDD the authority to modify the wording of the 
               required notice for clarity, readability, and 
               accuracy, except that corrections to the website and 
               telephone can be done through guidance without the 
               adoption of a regulation.

             c)   Author's amendment on privacy.  This bill requires 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          15


          

               health plans and health insurers to provide the name, 
               address and other information that is in the 
               possession of the plan/insurer that the Exchange may 
               require to determine eligibility, facilitate 
               enrollment in coverage, and maximize continuity of 
               care.  Because providing this information may involve 
               transferring an individual's medical information, the 
               author is adding language to require that the 
               furnishing of information be consistent with other 
               state and federal medical privacy laws.

          3.  Suggested technical or clarifying drafting amendments.  


             a)   This bill requires a notice to be provided to 
               individuals that they may be eligible for reduced-cost 
               coverage through the Exchange and for no-cost coverage 
               through Medi-Cal when an individual files a new claim 
               for disability benefits.  This requirement would take 
               effect upon the effective date of the bill, while this 
               same required notice would take effect January 1, 2013 
               in other parts of the bill.  Committee staff 
               recommends amendments to make the dates consistent 
               across the provisions of this bill.  

             b)   The provisions of this bill placing requirements on 
               health plans and health insurers need to clarify which 
               provisions place requirements on group contracts and 
               policies versus individual contracts and policies, and 
               to clarify that the provisions affecting health plans 
               and insurers in the individual market involve 
               individuals and not former employees and dependents of 
               those former employees. 

             c)   This bill requires health plans and insurers to 
               obtain the consent of enrollees before transferring 
               information to the Exchange.  Committee staff 
               recommends a clarifying amendment that the consent be 
               provided in writing.

             d)   The provisions of this bill requiring EDD to 
               provide the Exchange with information on individuals 
               who file claims for unemployment compensation do not 
               require the consent of the individual in the same way 
               that the provisions of the bill requiring health plans 




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          16


          

               and health insurers to furnish this information.  
               Committee staff recommends an amendment to require an 
               individual's consent before this information is 
               forwarded from EDD to the Exchange.

             e)   Existing law requires group health plans and group 
               health insures providing Cal-COBRA coverage to provide 
               a statutory notice advising individuals to consider 
               their options before declining Cal-COBRA coverage 
               because companies selling individual health coverage 
               require a review of the individual's medical history 
               that could result in a higher premium or the denial of 
               coverage.  This bill has a new but similar notice 
               plans and insurers would be required to use from 
               January 1, 2012 until December 31, 2013, that it is 
               updated to reflect several changes made by federal 
               health care reform.  This disclosure applies to health 
               plans and insurers providing group coverage, and is 
               not limited to plans and insurers offering Cal-COBRA 
               coverage.  Committee staff recommends an amendment to 
               delete the current notice requirements in existing 
               law.
           
          4.  Double referral.  Because this bill is double referred, 
          any amendments will need to be adopted in the Senate 
          Judiciary Committee.


                                    POSITIONS  
                                        
          Support:  Health Access California (sponsor)
                    100% Campaign
                    American Federation of State, County and 
                         Municipal Employees
                    California Labor Federation
                    California Medical Association
                    California Pan-Ethnic Health Network
                    California Primary Care Association
                    California Rural Legal Assistance Foundation
                    Congress of California Seniors
                    Consumers Union
                    Contra Costa County Board of Supervisors
                    Having Our Say
                    National Association of Social Workers, 
                              California Chapter




          STAFF ANALYSIS OF ASSEMBLY BILL 792 (Bonilla)         Page 
          17


          

                    Service Employees International Union
                    Unitarian Universalist Legislative Ministry 
                         Action Network-California
                    United Nurses Associations of California/Union of 
                         Health Care Professionals
                    Western Center on Law & Poverty

          Oppose:Association of California Life and Health Insurance 
          Companies
                    California Association of Health Plans
                    California Association of Health Underwriters


                                   -- END --