BILL ANALYSIS �
AB 1083
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CONCURRENCE IN SENATE AMENDMENTS
AB 1083 (Monning)
As Amended August 24, 2012
Majority vote
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|ASSEMBLY: |50-27|(May 27, 2011) |SENATE: |22-13|(August 29, |
| | | | | |2012) |
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Original Committee Reference: HEALTH
SUMMARY : Reforms California's small group health insurance laws
to enact the federal Patient Protection and Affordable Care Act
(ACA). This bill eliminates preexisting condition requirements
and establishes premium rating factors based only on age, family
size and geographic regions, except for grandfathered plans.
New guaranteed issue provisions and the rating provisions are
tied to those provisions in the ACA. Should guaranteed issue
and rating factors be repealed in the ACA, California's existing
law pre ACA would become operative.
The Senate amendments :
1)Require that if the ACA provisions on guarantee issue and
rating factors are repealed the related provisions in this
bill would also be repealed, and provisions of law in effect
prior to the ACA would become operative.
2)Sunset existing law affecting small employer plans on January
1, 2014, and establishes new law that applies to
nongrandfathered small employer health benefit plans with
respect to plan years beginning on or after January 1, 2014.
3)Require health plans and health insurers, commencing March 1,
2013, and at least annually thereafter, to provide to their
regulators, the number of enrollees by product type as of
December 31 of the prior year that receive coverage or
insurance as individuals, small groups, large groups, or
administrative services only business lines. Requires the
information to be reported publicly by each health plan and
insurer on the website of the regulators. Requires the
Department of Health Care Services (DMHC) and the California
Department of Insurance (CDI) to consult to ensure the data
are comparable and do not duplicate existing reporting
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requirements, and utilizes existing reporting formats.
4)Permit a waiting period of no longer than 60 days, as
specified.
5)Delete provisions allowing a self-employed individual to
choose to enroll as individual rather than a small employer in
the California Health Benefit Exchange.
6)Make the definition of employer, for purposes of determining
whether an employer with one employee includes sole
proprietors, certain owners of S corporations, or other
individuals consistent with ACA any federal rules, regulations
or guidance consistent with that law.
7)Require an affiliation period under a health plan contract to
run concurrently with any waiting period under that contract,
not to exceed 60 days.
8)Allow a waiting period for plan years on or after January 1,
2014 to be applied as a condition of employment if applied
equally to all full-time employees, consistent with ACA and
any rules, regulations, or guidance issued consistent with
that law.
9)Maintains existing law for small group grandfathered health
plans and health insurers.
10)State that nothing in certain provisions should be construed
as prohibiting health plans and health insurers from
restricting enrollment of late enrollees to open enrollment
periods as authorized in ACA, and any rules, regulations, or
guidance issued consistent with that law.
11)Require premium rates for contracts offered or delivered by
plans on or after January 1, 2014 to be subject to the
following requirements:
a) The following geographic rating regions:
i) Region 1 shall consist of the counties of
Alpine, Del Norte, Siskiyou, Modoc, Lassen, Shasta,
Trinity, Humboldt, Tehama, Plumas, Nevada, Sierra,
Mendocino, Lake, Butte, Glenn, Sutter, Yuba, Colusa,
Amador, Calaveras, and Tuolumne.
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ii) Region 2 shall consist of the counties of Napa,
Sonoma, Solano, and Marin.
iii) Region 3 shall consist of the counties of
Sacramento, Placer, El Dorado, and Yolo.
iv) Region 4 shall consist of the county of San
Francisco.
v) Region 5 shall consist of the county of Contra
Costa.
vi) Region 6 shall consist of the county of Alameda.
vii) Region 7 shall consist of the county of Santa
Clara.
viii) Region 8 shall consist of the county of San
Mateo.
ix) Region 9 shall consist of the counties of Santa
Cruz, Monterey, and San Benito.
x) Region 10 shall consist of the counties of San
Joaquin, Stanislaus, Merced, Mariposa, and Tulare
xi) Region 11 shall consist of the counties of
Madera, Fresno, and Kings.
xii) Region 12 shall consist of the counties of
San Luis Obispo, Santa Barbara, and Ventura.
xiii) Region 13 shall consist of the counties of Mono,
Inyo, and Imperial.
xiv) Region 14 shall consist of the county of Kern.
xv) Region 15 shall consist of the ZIP Codes in Los
Angeles County starting with 906 to 912, inclusive,
915, 917, 918, and 935.
xvi) Region 16 shall consist of the ZIP Codes in Los
Angeles County other than those identified in
subparagraph (xv).
xvii) Region 17 shall consist of the counties of San
Bernardino and Riverside.
xviii) Region 18 shall consist of the county of Orange.
xix) Region 19 shall consist of the county of San
Diego.
b) Authorizes the DMHC, in consultation with the CDI and
the California Health Benefit Exchange, to review the
geographic rating regions and submit a report to the
Legislature.
c) Establish age bands and family categories pursuant to
the ACA.
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12)Require all nongrandfathered policies of small employer
health insurance that are offered, sold, renewed, or delivered
on or after January 1, 2014 to provide coverage for essential
health benefits, as described in ACA.
13)Prohibit a health care service plan or insurance carrier from
requiring an eligible employee or dependent to fill out a
health assessment or medical questionnaire prior to enrollment
under a small employer health care service plan contract.
Prohibit a health care service plan or insurer from acquiring
or requesting information that relates to a health status
factor from the applicant or his or her dependent or any other
source prior to enrollment of the individual.
14)Revise a health status-related factor in which plans and
insurers may not establish rules for eligibility, recognizes
any other health status-related factor as determined by any
federal regulations, rules, or guidance issued pursuant to
federal law.
15)Revises definition of child, as specified.
16)Require on or after October 1, 2013, and annually thereafter,
a health care service plan and insurance carrier to issue a
notice to all subscribers enrolled in a grandfathered small
employer plan contract informing subscribers about new health
care options available on and after January 1, 2014, as
specified.
AS PASSED BY THE ASSEMBLY , this bill, effective January 1, 2014,
revised state law to implement provisions in the federal ACA.
Required solicitors to notify the small employer of the
availability of coverage through the Exchange, made premium
rates established by health plans and insurers in effect for 12
months, prohibited solicitors and health insurance agents from
entering into arrangements with carriers for varied compensation
based on health status, claims experience, industry, occupation,
or geographic location.
FISCAL EFFECT : As amended, this bill has not been analyzed by a
fiscal committee.
COMMENTS : Approximately 3.4 million Californians enjoy the
protections brought about by California's landmark small
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employer group health insurance rating and underwriting rules
which have applied to employer groups with two to 50 workers
since 1993. These rules require carriers to offer health plan
contracts and insurance policies (health insurance) to small
employer purchasers on a guaranteed issue (accept a group
applying for coverage regardless of the health status or claims
experience of group members). They also require carriers to
offer renewal contracts, limit the rating factors carriers can
employ in pricing small group products, require carriers to
guarantee issue all small employer products to all small group
purchasers, and limit the ways in which carriers can exclude
coverage for existing health care conditions. ACA includes
several significant reforms to the health insurance market,
including numerous provisions that interact with California's
small group laws. According to the author, implementation of
ACA small group reforms in California has the potential to bring
millions of people into the small group market. This bill is
intended to revise California law to conform to the federal law
in order to bring more uninsured into coverage.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097
FN: 0005764