BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 1083 (Monning)
          
          Hearing Date: 8/15/2011         Amended: 8/15/2011
          Consultant: Katie Johnson       Policy Vote: Health 5-2
          _________________________________________________________________
          ____
          BILL SUMMARY: AB 1083 would, effective January 1, 2014, make a 
          number of changes to state laws governing the sale of small 
          group insurance products to largely conform state law to 
          provisions in the federal Patient Protection and Affordable Care 
          Act (ACA). The bill would make changes to laws governing the 
          offering and sale of small group insurance products that become 
          effective January 1, 2012, pertaining to self-employed 
          individuals, the duration of premium rates, notification of 
          availability of coverage, and notice of material modifications 
          by carriers.
          _________________________________________________________________
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           CDI filings and oversight         $0          $0        
          $134Special*

          *Insurance Fund
          _________________________________________________________________
          ____

          STAFF COMMENTS: 
          
          This bill would, for small employers, change the definitions and 
          criteria related to eligible employees and rating periods, and, 
          for plan years commencing on or after January 1, 2014, risk 
          adjustment factors, age categories, and health status-related 
          factors, as specified. This bill would change the definition of 
          small employers for plan years commencing on or after January 1, 
          2014, from 2 to 50 to 1 to 50. Commencing January 1, 2016, 
          implements the federal definition of small employer as 1 to 100 
          eligible employees. Commencing January 1, 2014, this bill would 
          prohibit a health plan and health insurer offering group or 
          individual health insurance coverage that imposes any 
          pre-existing condition exclusion and, commencing January 1, 
          2012, would prohibit a carrier from imposing any pre-existing 








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          condition provision on any child.

          This bill would also implement small group market changes that 
          are not addressed in the ACA, including provisions related to 
          self-employed individuals enrolling in the California Health 
          Benefit Exchange, permitting rating periods to be no less than 1 
          year, and notifications of employers of rate increases.

          In California, the Department of Managed Health Care (DMHC) and 
          the California Department of Insurance (CDI) regulate health 
          care service plans and health insurers that offer products in 
          the small group market. Costs to DMHC would be minor and 
          absorbable. Costs to CDI would be $134,000 in FY 2013 - 2014 and 
          minor and absorbable ongoing.