BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1313 (Lieu) - Health care coverage marketing.
Amended: May 2, 2012 Policy Vote: Health 6-3
Urgency: No Mandate: Yes
Hearing Date: May 14, 2012 Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1313 would impose a variety of new requirements
on health plans and health insurers, relating to their marketing
efforts.
Fiscal Impact:
Department of Managed Health Care - startup costs of about
$330,000 and ongoing costs of about $130,000 per year
(Managed Care Fund) to develop regulations and enforce
provisions of the bill.
Department of Insurance - startup costs of about $680,000
and ongoing costs of about $360,000 (Insurance Fund) to
develop regulations and enforce provisions of the bill.
Background: The Department of Managed Health Care regulates
health plans in the state. Under existing law, health plans are
required to provide marketing materials to the Department of
Managed Health Care for a 30 day review period to ensure that
the materials are not misleading. Existing law prohibits health
plans or their agents from making statements relating to
coverage that are deceptive. Existing law requires health plans
to make certain documents available in a language other than
English if the number of health plan enrollees speaking such a
language meets a certain threshold.
The Department of Insurance regulates health insurers. Existing
law prohibits insurers or their agents from misrepresenting the
terms of an insurance policy. Existing law requires insurers
plans to make certain documents available in a language other
than English if the number of policy holders speaking such a
language meets a certain threshold.
The federal Affordable Care Act, amongst many provisions,
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requires individuals to maintain health care coverage. Under
this law, most health plans or insurance policies will be
required to offer a set of essential health benefits, as defined
by the states.
Proposed Law: SB 1313 makes a variety of changes to the statutes
governing the marketing practices of both health plans and
health insurers.
With regard to health plans, the bill would:
Prohibit health plans or their representatives from making
deceptive statements about the requirements of the federal
Affordable Care Act.
Authorize the Department of Managed Health Care to extend
its review of marketing materials for up to an additional 30
days. (This provision will sunset on December 31, 2019.)
Prohibit someone whose license to market health plans has
been revoked from becoming a Navigator in the California
Health Benefit Exchange or becoming licensed for the
purposes of marketing insurance.
Require the Department of Managed Health Care to adopt
rules to minimize the duplication of state standards for
disclosure of coverage information with forthcoming federal
standards.
After 2014, prohibit specialized health plans from selling
individual or group health plans that do not meet essential
health benefit requirements, unless the purchaser has
demonstrated existing coverage that meets essential health
benefit requirements. (This provision does not apply to
specialty dental or vision plans.)
After 2014, prohibit discount health plans from selling
services unless the purchaser has demonstrated existing
coverage that meets essential health benefit requirements.
Require specialized health plans and discount health plans
to disclose that they do not meet essential health benefit
requirements in all marketing materials.
Require health plans that advertise in languages other than
English to translate certain documents relating to the
product into those languages. (The state's Medi-Cal and
Healthy Families programs are exempt from this requirement.)
With regard to health insurers, the bill would:
Prohibit insurers or their representatives from making
deceptive statements about the requirements of the federal
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Affordable Care Act.
Prohibit insurers or their representatives from using any
advertisement or making any statement that is untrue,
misleading, or deceptive.
Prohibit someone whose license to sell insurance policies
has been revoked from becoming a Navigator in the California
Health Benefit Exchange or becoming licensed for the
purposes of marketing health plans.
After 2014, prohibit insurers from selling individual or
group policies that do not meet essential health benefit
requirements, unless the purchaser has demonstrated existing
coverage that meets essential health benefit requirements.
(This provision does not apply to specialty dental or vision
plans.)
After 2014, prohibit specialized health insurers from
selling policies that do not meet essential health benefit
requirements, unless the purchaser has demonstrated existing
coverage that meets essential health benefit requirements.
(This provision does not apply to specialty dental or vision
plans.)
Require insurers to disclose if products do not meet
essential health benefit requirements in all marketing
materials.
Require the Department of Insurance to adopt rules to
minimize the duplication of state standards for disclosure
of coverage information with forthcoming federal standards.
Require insurers to provide all proposed marketing
materials to the Department of Insurance for a 30 day
review, to ensure compliance with marketing requirements in
law (and this bill). The Department may extend the review
period for an additional 90 days. (The authority to extend
the review period would sunset on December 31, 2019.)
Require insurers that advertise in languages other than
English to translate certain documents relating to the
product into those languages. (The state's Medi-Cal and
Healthy Families programs are exempt from this requirement.)
Related Legislation:
AB 1761 (John A. Perez) would make holding oneself out as
representing the California Health Benefit Exchange without
a valid agreement unfair competition. That bill is on the
Assembly Floor.
SB 951 (Hernandez) designates the Kaiser Small Group HMO as
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the state's Essential Health Benefits benchmark plan. That
bill is in the Assembly.
SB 1453 (Monning) 2011 is identical to SB 951. That bill is
on the Assembly Floor.
SB 961 (Hernandez) makes a variety of changes to the
state's individual health plan market, pursuant to the
Affordable Care Act. That bill is on this Committee's
Suspense File.
AB 1461 (Monning) is identical to SB 961. That bill is on
the Assembly Appropriations Committee's Suspense File.
Staff Comments: The only local mandates imposed by the bill
relate to misdemeanor penalties and are not reimbursable by the
state under the California Constitution.