BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 220|
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THIRD READING
Bill No: SB 220
Author: Price (D)
Amended: As introduced
Vote: 21
SENATE INSURANCE COMMITTEE : 8-0, 4/27/11
AYES: Calderon, Gaines, Anderson, Corbett, Lieu,
Lowenthal, Price, Wyland
NO VOTE RECORDED: Correa
SUBJECT : Life insurance: group policies: dependent
children
SOURCE : Author
DIGEST : This bill authorizes dependent children to be
eligible for coverage under group life insurance policies
up to age 26.
ANALYSIS : Existing law:
1. Employee group life insurance is an authorized form of
group life insurance and must conform to certain
statutory conditions. (California Insurance Code �CIC]
Section 10202.) While the amount of insurance issued
must be based upon some plan that will preclude
individual selection (CIC Section 10203.4(a)) the plan
participants can elect to extend the coverage to insure
the dependents of any insured employee who so elects
(CIC Section 10204(a)).
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2. For purposes of this election, current law limits the
age of eligible dependents to all unmarried children
from "birth through 20 years of age" or "through 24
years of age" if the dependent child is attending an
educational institution.
This bill, with respect to eligibility for group life
insurance under California law, increases the dependent
child eligibility age to "until 26 years of age" so group
life insurance can be offered on terms which are comparable
to those made for dependent children under the federal
Patient Protection and Affordable Care Act of 2010.
Under the Federal health care reform legislation signed
into law last year, and also under California law,
dependent children up to age 26 can remain on their
parent's policy. This bill conforms the eligibility rules
for sales of group life insurance under California law to
the new age standard.
Comments
According to the author, this bill conforms the age for
dependent coverage eligibility from 20 or 24 for college
students to 26 and maintains protections for older
dependents with intellectual or developmental disabilities.
This bill expands access to life insurance coverage,
provide young people with support they currently are
unlikely to have and parents with the assurance that in the
event of catastrophe, some of their expenses can be paid
down by effective life insurance .
Finally, the author states this bill also provides group
insurance companies that currently allow for dependent
coverage the opportunity to effectively inform consumers of
their products.
Prior/Related Legislation
SB 1088 (Price), Chapter 660, Statutes of 2010, which
prohibited, with specified exceptions, the limiting age for
dependents covered by health plan contracts and health
insurance policies from being less than 26 years of age
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beginning on or after September 23, 2010, and prohibits
health plan contracts and health insurance policies from
being required to cover a child of a child receiving
dependent coverage.
SB 122 (Price), 2011-12 Session, which proposes to clarify
SB 1088 (Price), Chapter 660, Statutes of 2010, with
respect to the complying with Federal Health Reform and
leaving further expanded coverage, in the near term to
others.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/4/11)
Association of California Life and health Insurance
Companies
California Association of health Underwriters
National Association of Insurance and Financial Advisors
ARGUMENTS IN SUPPORT : The author indicates group life
insurance policy holders, agents and companies believe that
the increased age requirement with health care insurance
deserves parity.
The Association of California Life and Health Insurance
Companies (ACLHIC) is in support, stating "Many ACLHIC
member companies offering group life insurance coverage
continue to receive requests from current and prospective
group policyholders wanting to expand the offer of group
life insurance to employees' dependents in line with the
changes established under the federal Patient Protection
and Affordable Care Act (PPACA) of 2010. PPACA considers a
dependent child to be from birth to age 26 whether or not
living with the parent, financially dependent on the
parent, and regardless of marital status."
ACLHIC also states "SB 220 expands the definition of
"dependent" for group life eligibility to more closely
mirror the definition in PPACA and allow for coverage up to
age 26. While the offer of dependent coverage is required
under health insurance law, it is optional under group life
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insurance law. This bill would allow insurers to offer
this expanded coverage benefit to employers at a time when
many California businesses are reducing benefits."
JJA:kc 5/4/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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