BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 299 (Evans)
Hearing Date: 5/2/2011 Amended: As Introduced
Consultant: Bob Franzoia Policy Vote: L&IR 5-2 Judiciary
4-1
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BILL SUMMARY: SB 299 would prohibit an employer from refusing to
maintain and pay for coverage under a group health plan for a
female employee disabled by pregnancy, childbirth, or a related
medical condition employee who takes that leave, as specified.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Unlawful employment Unknown, likely minor, absorbable
costsGeneral
practice prohibition annually
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STAFF COMMENTS:
Under existing law, employers with at least 50 employees are
required to maintain and pay for coverage under a group health
plan during a period of leave, of up to 12 weeks, for the birth
of a child. Existing law prohibits employers with at least five
employees from refusing to allow female employees to take a
leave of absence due to a pregnancy, childbirth, or related
medical condition, not to exceed 16 weeks. This bill would
prohibit an employer of five or more employees from refusing to
maintain and pay for coverage under a group health plan for a
female employee taking pregnancy disability leave.
The Department of Fair Employment and Housing indicates costs to
respond to inquiries regarding health care coverage during
pregnancy disability leave are likely to be minor, and
absorbable.
Impact on the California Health Benefits Exchange
Employers of 50 or fewer employees are permitted to purchase
insurance, commencing January 1, 2014, for their employees
through the Small Business Option Program (SHOP) Exchange,
established by Chapter 655/2010 and 659/2010 and under the
authority of the California Health Benefits Exchange.
Additionally, the federal government offers tax incentives to
small businesses in an effort to continue their provision of and
contribution to employee health care coverage.
To the extent this new requirement to provide up to an extra
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four months of coverage (and to the extent that employers do
drop this coverage while a female employee is on maternity
leave) increases health care costs too high for small employers
to handle, small employers may drop coverage.
There are a variety of publicly-funded health care coverage
programs for eligible individuals based on income and health
status, including Medi-Cal, Healthy Families Program, Access for
Infants and Mothers Program, Pre-Existing Condition Insurance
Plan, and Managed Risk Medical Insurance Program, that these
employees could
attempt to access. If they could not access these programs,
there would be an increase in the number of uninsured and
therefore cost pressure on county, state, and federal funds to
compensate hospitals for any uncompensated care.
The Exchange must be operational by January 1, 2014. Thus,
uninsured individuals may purchase insurance through the
Exchange in the individual market and, dependent on income
eligibility, may receive federal subsidies.
Federal law requires plans and insurers, commencing January 1,
2014, to provide coverage for ten general "essential health
benefits"; they have yet to be fully defined by federal
guidance. If a state mandates coverage of a benefit that is not
included in the essential health benefits, the state would need
to assume the cost of that extra benefit for individuals covered
through the Exchange. State General Fund costs are speculative
at this point; further federal guidance is needed to accurately
determine a state's General Fund liability.
If a small employer drops coverage for their employees as a
result of this bill, there could (1) be cost pressure on state,
local, and federal funds to compensate the health care safety
net for newly uninsured individuals, and ( 2) General Fund cost
pressure to the extent that these uninsured employees (a)
purchase insurance from the Exchange commencing January 1, 2014,
and, (b) they have an income between 200 and 400 percent of the
federal poverty level, thus making them eligible to receive
federal subsidies.
SB 299 (Evans)
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