BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 757|
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UNFINISHED BUSINESS
Bill No: SB 757
Author: Lieu (D), et al.
Amended: 8/22/11
Vote: 21
SENATE HEALTH COMMITTEE : 6-3, 4/27/11
AYES: Hernandez, Alquist, De Le�n, DeSaulnier, Rubio, Wolk
NOES: Strickland, Anderson, Blakeslee
SENATE JUDICIARY COMMITTEE : 3-2, 5/3/11
AYES: Evans, Corbett, Leno
NOES: Harman, Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/16/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Emmerson, Runner
NO VOTE RECORDED: Walters
SENATE FLOOR : 25-13, 5/31/11
AYES: Alquist, Calderon, Corbett, Correa, De Le�n,
DeSaulnier, Evans, Hancock, Hernandez, Kehoe, Leno, Lieu,
Liu, Lowenthal, Negrete McLeod, Padilla, Pavley, Price,
Rubio, Simitian, Steinberg, Vargas, Wolk, Wright, Yee
NOES: Anderson, Blakeslee, Cannella, Dutton, Emmerson,
Fuller, Gaines, Huff, La Malfa, Runner, Strickland,
Walters, Wyland
NO VOTE RECORDED: Berryhill, Harman
ASSEMBLY FLOOR : 50-24, 9/1/11 - See last page for vote
SUBJECT : Discrimination
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SOURCE : Equality California
DIGEST : This bill requires every group health care
service plan contract and every policy or certificate of
group health insurance marketed, issued, or delivered to a
resident of this state, regardless of the situs of the
contract to comply with existing law that provides for
equal coverage for registered domestic partners.
Assembly Amendments specify that this bill prohibits such
contracts, policies, or certificates of an employee,
subscriber, insured, or policyholder from discriminating in
coverage between different sex and same sex spouses and
domestic partners and states that the prohibitions and
requirements imposed by this bill are in addition to any
other prohibitions and requirements imposed by existing
law.
ANALYSIS :
Existing law:
1. Provides for the regulation of health care service plans
(health plans) by the Department of Managed Health Care.
2. Provides for the regulation of all forms of insurance,
including health insurance, by the Department of
Insurance.
3. Provides that every disability insurance policy covering
hospital, medical or surgical expenses, that is
advertised, issued, or delivered to a California
resident, regardless of the location of the contract or
master group policyholder, is subject to all
requirements in the California Insurance Code, except
those policies issued outside California to an employer
whose principal place of business and majority of
employees are outside California.
4. Requires group health plans, health insurers, and all
other forms of insurance that provide dependent coverage
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to provide coverage for a registered domestic partner
that is equal to the coverage provided to a spouse.
5. Provides that any group health plan contract, health
insurance policy, or any other insurance policy, shall
be deemed to provide coverage for a registered domestic
partner that is equal to the coverage provided to a
spouse.
This bill:
1. Requires every group health plan contract and every
policy or certificate of group health insurance
marketed, issued, or delivered to a resident of this
state, regardless of the situs of the contract to comply
with existing law that provides for equal coverage for
registered domestic partners.
2. Prohibits such contracts, policies, or certificates of
an employee, subscriber, insured, or policyholder from
discriminating in coverage between different sex and
same sex spouses and domestic partners and states that
the prohibitions and requirements imposed by this bill
are in addition to any other prohibitions and
requirements imposed by existing law.
Background
Extraterritoriality . Employers located in one state often
employ individuals who reside in another state, or have
employees in multiple states. Many such employers purchase
a single group health plan or insurance policy covering all
of their employees, wherever they are located, which
results in such group plans and policies providing coverage
to residents of more than one state. In most states, the
location of the employer's headquarters dictates which
state's insurance regulations apply, not the location of
the employee, as is the case with individual insurance
products. For example, if an employer is headquartered in
New York and has some employees living in New Jersey, New
York insurance regulations will apply to the insurance
coverage of those employees who live in New Jersey. This
is similar to California law.
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An exception to this rule occurs in states that choose to
exercise territorial jurisdiction; these states are known
as extraterritorial states. States with extraterritorial
laws require health insurers to provide benefits based on
the laws of the state where an employee resides, regardless
of where the employer is located.
There are currently 12 states that exercise territorial
jurisdiction of insurance laws for health insurance
policies. They include Alaska, Arkansas, Connecticut,
Delaware, Indiana, Kansas, Mississippi, Montana, North
Carolina, Oklahoma, Utah and Washington. Any other state's
group health insurance laws do not apply in these states.
This means that a policy issued by a New York-based insurer
to a New York employer for an employee residing in
Connecticut is subject to Connecticut's insurance
regulations and the New York insurer must issue a
certificate of insurance that complies with Connecticut
insurance law.
Comment
Existing law, AB 2208 (Kehoe), Chapter 488, Statutes of
2004, establishes the California Insurance Equality Act,
which requires all types of insurance, including health
insurance, to provide coverage to registered domestic
partners equal to that provided to a spouse.
This bill, with the words "regardless of the situs of the
contract or master policyholder," seeks to clarify that
this parity requirement extends to insurance provided to
California residents by employers located out-of-state with
out-of-state insurance contracts or policies.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
1. Potential minor, absorbable costs to the Department of
Managed Health Care and California Department Insurance
related to ensuring carrier compliance with the
provisions of this bill that states that policies and
plan contracts may not discriminate on the basis of the
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sex of spouses or domestic partners.
2. As it is unclear how the provisions of this bill that
apply to out-of-state carriers can be enforced by state
regulators, there is no anticipated direct state fiscal
impact for enforcement.
SUPPORT : (Verified 8/22/11)
Equality California (source)
Department of Insurance
California School Employees Association
California Association of Marriage and Family Therapists
Greater San Diego Business Association
ARGUMENTS IN SUPPORT : Equality California, the sponsor
of this bill, asserts that employees of out-of-state
companies who live in California and are in a domestic
partnership are often the victims of discrimination because
their employer contracts with an out-of-state insurer that
does not provide equal benefits to domestic partners.
Because of this practice, domestic partners and employers
are often forced to switch insurers to purchase coverage
that treats spouses and domestic partners equally.
Equality California believes that this bill ensures that
such out-of-state insurers must abide by the same
nondiscrimination laws that California insurers already do.
Writing in support, the California Association of Marriage
and Family Therapists (CAMFT) argues that the 2004
California Insurance Equality Act was intended to provide a
necessary and consistent standard of nondiscrimination in
insurance by ensuring that insurance companies treat
domestic partners in the same manner as spouses in the
purchase of insurance. CAMFT believes this bill ensures
that out-of-state plans and insurers also adhere to the
nondiscrimination laws of California, thereby assuring
legislative intent behind the California Insurance Equality
Act.
ASSEMBLY FLOOR : 50-24, 9/1/11
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AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bradford, Brownley, Buchanan, Butler,
Charles Calderon, Campos, Carter, Cedillo, Chesbro,
Dickinson, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Galgiani, Gatto, Gordon, Hall, Hayashi, Hill, Huber,
Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, Mendoza,
Mitchell, Monning, Pan, Perea, V. Manuel P�rez,
Portantino, Skinner, Solorio, Swanson, Torres,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Bill Berryhill, Conway, Donnelly, Beth
Gaines, Garrick, Grove, Hagman, Halderman, Harkey,
Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell,
Nestande, Nielsen, Norby, Olsen, Silva, Valadao, Wagner
NO VOTE RECORDED: Bonilla, Cook, Davis, Gorell, Roger
Hern�ndez, Smyth
CTW:kc 9/1/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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