BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 792 (Bonilla)
As Amended June 30, 2011
Hearing Date: July 5, 2011
Fiscal: Yes
Urgency: No
EDO
SUBJECT
Health Care Coverage: California Health Benefit Exchange
DESCRIPTION
This bill would require the disclosure of information on health
care coverage through the California Health Benefit Exchange
(Exchange), under specified circumstances, upon the filing of a
petition for dissolution of marriage, nullity of marriage, legal
separation, adoption, or an application for unemployment or
disability benefits. This bill would require the court or
department to provide these individuals with a specified notice
of their possible eligibility to enroll in the Exchange. This
bill would require health plans, health insurers, and employers,
for their insured, 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, in
accordance with all state and federal privacy laws, and to
initiate an application for enrollment in the Exchange if the
individual consents in writing. This bill would also require
the individual who is declining coverage from the Exchange to do
so in writing.
BACKGROUND
In 2010, landmark legislation, the federal Patient Protection
and Affordable Care Act (PPACA), was signed in to law by
President Obama. Among other things, PPACA requires each state
to establish a Health Benefit Exchange by January 1, 2014 which
would make health plans available to qualified individuals and
employers. The goal of PPACA is ensure that all Americans have
(more)
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health insurance coverage.
Currently, when a person loses health insurance benefits due to
a loss of job or change in familial status, he or she is
eligible for the Consolidated Omnibus Budget Reconciliation Act
more commonly known as COBRA. COBRA gives workers and their
families who lose their health benefits the right to choose to
continue group health benefits provided by their group health
plan for limited periods of time under certain circumstances.
Under COBRA, participants are generally required to pay the
entire premium for a temporary period of time (i.e. until they
find a new job). COBRA outlines how employees and family
members may elect this continued coverage and also requires
employers and plans to provide notice of this extended coverage.
This bill, sponsored by Health Access California, would, among
other things, require courts to give notice to individuals
filing a petition for dissolution of marriage or a petition for
adoption of their potential eligibility for health insurance
coverage through the California Health Benefit Exchange.
This bill was heard in the Senate Committee on Health on June
29, 2011 and passed out of that committee on a 5-3 vote. This
analysis is limited to the provisions of this bill related to
the Family Code which falls within this Committee's
jurisdiction.
CHANGES TO EXISTING LAW
1.Existing law provides for certain procedural provisions when
petitioning the court for dissolution of marriage, nullity of
marriage, or legal separation. Existing law provides that
certain general provisions be met when filing a petition for
adoption of an unmarried child. (Fam. Code Sec. 2020 et seq.
and 8600 et seq.)
This bill would provide that upon filing a petition for
dissolution of marriage, nullity of marriage, or legal
separation, on or after January 1, 2013, the court must
provide the following notice: "In March of 2010, the federal
government passed National Health Care Reform. Because of
this, effective January 1, 2014, you may become eligible for
reduced-cost comprehensive health care coverage through the
California Health Benefit Exchange. To learn more, visit
www.healthexchange.ca.gov or call 1- (insert number)."
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2.Existing law , Cal-COBRA, 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 upon a qualifying event without evidence
of insurability. Existing law requires the qualified
beneficiary, upon election, to be able to continue his or her
coverage under the group benefit plan. (Health & Saf. Code
Sec. 1366.20.)
Existing law 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 qualified
beneficiary experiencing a qualifying event in firms with 20
or more employees) and state law conversion coverage options.
(Health & Saf. Code Sec. 1373.6 et. seq.)
This bill would require these entities to obtain the written
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. This bill
prohibits these entities from transferring any information
regarding the individual to the Exchange if the individual
does not provide his or her consent. This bill provides that
consent may be obtained at the time of the qualifying event.
This bill would define "qualified beneficiary" to mean "any
individual who, on the day before the qualifying event, is an
enrollee in a group benefit plan offered by a health care
service plan and has a qualifying event, as defined."
This bill would define a "qualifying event" to mean any of the
following events that would result in a loss of coverage under
the group benefit plan to a qualified beneficiary:
the death of the covered employee;
the termination of employment or reduction in hours of
the covered employee's employment;
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; or
with respect to a covered dependent only, the covered
employee's entitlement to benefits under Medicare.
This bill would require individual health plans and insurers
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to provide to the Exchange information regarding previously
covered individuals and any dependents who chose not to renew
individual coverage. This bill would require 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. This bill 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 and consistent with
other state and federal medical privacy laws.
This bill would provide that the person for whom an
application has been initiated by the transfer of information
shall be given the opportunity to provide informed consent to
use the transferred information to commence eligibility
determination and complete enrollment as well as the
opportunity to correct any transferred information or provide
additional information before a final eligibility
determination is made. If the individual fails to consent or
fails to respond to the opportunity to consent within a
reasonable period of time, that failure to consent or to
respond timely shall be construed as discontinuing the
application.
1.Existing law regulates the distribution of unemployment
compensation or disability benefits by the Employment
Development Department (EDD). (Umemp. Ins. Code Secs. 1326
et. seq. and 2701 et. seq.)
This bill would require EDD to provide notice to individuals
filing a new claim for unemployment compensation or disability
benefits 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.
This bill would require 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.
This bill would require a notice to be provided, effective
January 1, 2013, to individuals that they may be eligible for
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reduced-cost coverage through the Exchange when an individual
files a new claim for disability benefits.
2.Existing law establishes the Exchange in state government, and
specifies the duties and authority of the Exchange. Existing
law requires the Exchange to 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. (Gov. Code Sec. 100500 et.
seq.)
This bill would require the Exchange to seek approval from
California and Federal Departments of Health and Human
Services to transfer the minimum information necessary to
initiate an application for enrollment through the Exchange.
This bill requires the provision of this information to
initiate an application for enrollment in coverage through the
Exchange.
3.Existing law provides for several classes of coverage
including group plans and individual plans. Existing law
allows, until January 1, 2014, health plans and health
insurers in the individual market to decline to cover
individuals applying for individual health coverage, with
specified exceptions, such as a disability insurer that covers
hospital, medical, or surgical expenses under an individual
health benefit plan may not, with respect to a federally
eligible defined individual desiring to enroll in individual
health insurance coverage, decline to offer coverage to, or
deny enrollment of, the individual or impose any preexisting
condition exclusion with respect to the coverage. (Ins. Code
Sec. 10785.)
This bill would require, 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.
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This bill would require, from January 1, 2012, until December
31, 2013, 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 qualified beneficiaries 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.
This bill would require 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 consistent with other state and federal medical
privacy laws.
This bill would require 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.
This bill would require the information to be provided in a
manner consistent with a specified provision of the federal
PPACA dealing with procedures for determining Exchange
eligibility.
This bill would require 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.
COMMENT
1. Stated need for the bill
The author writes:
The idea of what this bill attempts to do has not been done in
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the state or in the nation before. This is a completely new
idea; however this bill is in line with the current COBRA
practice.
. . .this bill attempts to address future problems by ensuring
seamless transition for individuals who go through life
changing situations. In 2014 and thereafter, a component of
the federal Affordable Care Act institutes an individual
mandate provision, which requires everyone to have insurance.
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.
This bill ensures the design of the Exchange and redesign of
Medi-Cal take into account the need to serve short-term
uninsured as well as provide long-term coverage. �This bill]
will ensure Californians are provided notices and that they
are pre-enrolled into either the Exchange or Medi-Cal.
The sponsor of the bill, Health Access California, writes, "any
Californian can become uninsured because of a change in life
circumstance, yet state policy does relatively little to help
people stay on coverage. Today when somebody loses their job,
they get a COBRA notice. Today when someone loses a spouse
through divorce or death, they get a COBRA or HIPPA notice.
Today when a young adult ages off of their parents' coverage,
they don't even get a notice . . . COBRA is not a solution for
many people: only 20% of those eligible take COBRA, both because
of the cost of coverage and because the precipitating event
(loss of job, loss of a spouse) often results in a loss of
income."
In support of the bill, the California Medical Association (CMA)
writes, "CMA physicians support mechanisms to streamline health
coverage enrollment for eligible individuals and strongly
support expanding coverage to California's uninsured through
state-based health insurance exchange that provides competition
between plans that offer quality care and access through robust
provider networks. After 2014, individuals who lose health
coverage due to a difficult life event will still have an
obligation to obtain health insurance. �This bill] will make
that process easier and help ensure continuity of care during a
stressful time in a person's life."
Also in support, American Federation of State, County, and
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Municipal Employees (AFSCME) writes, "under health reform, many
people will be eligible for subsidized coverage only when they
have lost their job, gotten divorced, or faced another change in
life that probably resulted in a loss of income. �This bill]
will help people enroll in subsidized coverage by providing
notice of the availability of coverage and in some instances
pre-enrolling them in coverage. This improves federal health
reform by helping people stay covered."
2. Bill would require courts to provide notice of potential
eligibility for health coverage when filing a petition for
dissolution of marriage or adoption
Under existing law the court is required to provide certain
notifications to individuals filing for dissolution of marriage
or a petition for adoption. This bill would also require the
courts to provide individuals with notice of their potential
eligibility for health coverage under the California Health
Benefit Exchange.
Due to certain life events, including a loss of job or change in
familial status, some people are left without health insurance
coverage. Most employer-sponsored health insurance plans give
employees the option of covering a spouse or domestic partner.
Proof of marriage or registration of domestic partnership is
generally required. So, if for example, one spouse is covered
by another spouse's employer-sponsored health insurance and the
couple decides to file for dissolution of marriage, the
non-employee spouse would likely lose his or her coverage.
Currently, the spouse losing coverage would be eligible for
COBRA. However, COBRA can be cost prohibitive for most
individuals. Most health plans are several hundred if not in
the thousands of dollars per month. COBRA does not take into
consideration the applicant's income, and many of these life
changing events include a significant decrease in income. As a
result many people do not take advantage of this benefit. In
fact, it is estimated that only 20% of those eligible for COBRA
actually enroll in COBRA.
Also, according to a recent University of California study, "not
all workers are eligible for COBRA. Only workers employed by
firms with at least 20 employees are eligible under the federal
COBRA law, though California has expanded COBRA to smaller
businesses with 2 to 19 employees. According to the
Commonwealth Fund (2009), 5 percent of current workers would not
be eligible for federal COBRA benefits upon loss of their job
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because they work for a small business. Additionally,
eligibility for COBRA coverage is time limited, expiring after
18 to 36 months, depending on the qualifying event." (Maximizing
Health Care Enrollment through Seamless Coverage for Families in
Transition: Current Trends and Policy Implications (March 2011)
by Ken Jacobs, Laurel Lucia, Ann O'Leary, and Ann Marie
Marciarille.)
Additionally, when a person or persons file a petition for
adoption, this bill would require the court to give this notice
of potential coverage. This is important because when someone
is taking a child under their care through adoption, health
insurance is an important component of providing for a child.
This bill seeks to ensure that all individuals are aware that
they may be eligible for health insurance in accordance with the
federal PPACA, which requires all Americans to have health
insurance coverage beginning January 1, 2014.
Support : American Federation of State, County and Municipal
Employees, AFL-CIO (AFSCME); California Labor Federation;
California Medical Association; California Pan-Ethnic Health
Network; California Primary Care Association; California Rural
Legal Assistance Foundation; Children NOW; Children's Defense
Fund California; Congress of California Seniors; Consumers
Union; Contra Costa County Board of Supervisors; Having Our Say;
Latino Health Alliance; 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 : Association of California Life & Health Insurance
Companies; California's Association of Health Underwriters
HISTORY
Source : Health Access California
Related Pending Legislation : AB 714 (Atkins) would, among other
things, require notification about benefits under California
Health Benefit Exchange to individuals who have ceased to be
enrolled in various public health programs, including Healthy
Families, Access for Infants and Mothers, and the California
Major Risk Medical Insurance Program.
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Prior Legislation :
AB 1062 (Perez, Chapter 655, Statutes of 2010) established the
structures and duties of the California Health Benefit Exchange
(Exchange) to comply with the mandate on the states.
SB 900 (Alquist, 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.
Prior Vote :
Senate Committee on Health (Ayes 5, Noes 3)
Assembly Floor (Ayes 50, Noes 26)
Assembly Committee on Appropriates (Ayes 11, Noes 6)
Assembly Committee on Judiciary (Ayes 7, Noes 2)
Assembly Committee on Health (Ayes 13, Noes 6)
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