BILL ANALYSIS �
AB 1829
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Date of Hearing: April 22, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 1829 (Conway) - As Amended: April 21, 2014
SUBJECT : California Health Benefit Exchange: employees and
contractors.
SUMMARY : Prohibits the California Health Benefit Exchange
(Exchange, now known as Covered California) from hiring or
contracting with individuals who have been convicted of certain
felonies or violations if the person could have access to
specific personal information of enrollees. Contains an urgency
clause to ensure that the provisions of this bill go into
immediate effect upon enactment. Specifically, this bill :
1)Prohibits the Exchange from hiring or contracting with any
person whose duties would include facilitating enrollment in
qualified health plans offered through the Exchange or would
give the person access to the financial or medical information
of enrollees if the person has been convicted of:
a) A felony crime of dishonesty or breach of trust in a
state or federal jurisdiction;
b) Federal crimes related to the insurance business, as
specified; or,
c) A crime listed in current state regulations as
substantially related to the qualifications, functions, or
duties of an insurance licensee. These crimes include any
felony conviction and specified misdemeanor convictions.
2)Requires employees and contractors to subsequently notify the
Exchange upon any misdemeanor or felony conviction or filing
of charges in state or federal court, any administrative
action regarding a professional or occupational license, or
any conviction listed in 1) above.
EXISTING LAW :
1)Requires, under the federal Patient Protection and Affordable
Care Act (ACA), each state, by January 1, 2014, to establish a
health benefit exchange that makes qualified health plans
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(QHPs) available to qualified individuals and qualified
employers, or, if a state chooses not to establish an
exchange, requires the federal government to establish one for
the state.
2)Establishes the Exchange as an independent public entity in
state government. Requires the Exchange to compare and make
available through selective contracting health insurance for
individual and small business purchasers as authorized under
the ACA.
3)Permits the Exchange to adopt rules and regulations, as
necessary, and permits the Exchange to adopt any necessary
rules and regulations as emergency regulations in accordance
with the Administrative Procedure Act, until January 1, 2016.
4)Requires, under federal law, any person who receives
information provided by an applicant for coverage or receives
information from a federal agency, to use the information only
for the purposes of ensuring the efficient operation of the
Exchange, including verifying the eligibility of an individual
to enroll in the Exchange or to claim a premium tax credit or
cost-sharing reduction. Prohibits the information from being
disclosed to any other person except as provided.
5)Requires the Exchange to perform fingerprint-based background
checks of all employees, prospective employees, contractors,
subcontractors, employees of contractors, volunteers, or
vendors whose duties include access to confidential, personal,
or financial information, or any other information as required
by federal law or guidance.
6)Requires, under existing state regulations, the Exchange to
review any information from the criminal background check to
determine an individual's fitness to perform job duties, based
on a consideration of the nature of the job; the age, nature,
and gravity of the offense; and any evidence of
rehabilitation, including evidence provided by the individual.
7)Allows the Insurance Commissioner to deny an application for
any license by an applicant who has been convicted of a
felony, certain misdemeanors, or a public offense that
involves a fraudulent act or an act of dishonesty, as
specified. Allows, under state regulations, the Insurance
Commissioner to take into consideration the adverse effects of
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the crime, the recency or remoteness in time of the act, the
type of license involved, any extenuating or aggravating
circumstances, and related prior history. Allows the
Insurance Commissioner to consider all of the evidence
presented, including evidence offered by the licensee or
applicant, to determine whether the licensee or applicant has
sufficiently rehabilitated from the prior act and is fit to
hold an insurance license.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . The author writes that millions of
Californians have started to enroll in the new state Exchange
and more than 20,000 individuals will be contracted to promote
the Exchange and enroll the public. The author asserts that
these contractors will have access to enrollees' most
sensitive personal information, including home addresses,
Social Security numbers, state and federal tax information,
and personal health information.
The author notes that, although the Exchange performs
background checks, an article in the National Review recently
indicated that Covered California has certified a number of
individuals with criminal convictions, including those who
have committed significant financial crimes such as forgery,
burglary, and welfare fraud. The author suggests that this
bill, by excluding individuals with certain convictions from
working for the Exchange, would provide a much needed
safeguard for the public and restore confidence in the state
Exchange. The author concedes that individuals who have paid
their debt to society deserve a second chance, but argues that
felons convicted of financial crimes should be disqualified
from being hired by the Exchange or contracted as enrollment
counselors.
2)BACKGROUND .
a) Certified enrollment counselors. Certified enrollment
counselors are certified by the Exchange to provide
culturally and linguistically appropriate one-on-one
counseling and assistance to consumers in need of help with
applying for Covered California programs. Certified
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enrollment counselors must be registered with either the
In-Person Assistance Program or the Navigator Program and
are often referred to as in-person asstisters or
navigators. Counselors work for certified enrollment
entities, which are community-based organizations that
conduct outreach and enrollment activities, and are not
employees of the Exchange.
b) Exchange data on criminal background clearances. In
January 2014, an article in the National Review reported on
documents provided by the Exchange on criminal background
clearances for certified enrollment counselors. The
article called particular attention to one counselor with
forgery convictions in 1982 and 1994, and another counselor
with two forgery convictions in 1988. Other convictions
disclosed by the Exchange include the sale and possession
of drugs, petty theft, perjury, driving under the
influence, shoplifting, and battery.
According to information provided by the Exchange, of over
3,000 enrollment counselor applicants, 35 individuals, or
about 1%, had potentially disqualifying convictions. Of
these 35, four applicants have been disqualified based on
background checks. One disqualified individual had a
commercial burglary conviction in 2005; another had a
robbery conviction from 1992 and a spousal abuse conviction
in 2002. The Exchange indicates that its current
background check process, which is based on state law and
federal guidance, requires an individualized assessment of
each application, considering factors that include the age
and nature of the offense, the applicant's age at the time
of the offense, the relation of the offense to job duties,
the performance of similar duties in other jobs, and
evidence of rehabilitation.
c) Current fingerprinting requirement. The federal Minimum
Acceptable Risk Standards for Exchanges Personnel Screening
Requirements, developed by the federal Centers for Medicare
and Medicaid Services, require exchanges to perform a
criminal history check prior to employment and require
appropriate personnel to obtain and hold a moderate-risk
security clearance, as defined in federal personnel
security guidelines. In 2013, the Legislature enacted this
requirement through SB 509 (DeSaulnier and Emmerson),
Chapter 10, Statutes of 2013, which required
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fingerprint-based background checks for all employees and
contractors of the Exchange.
d) Federal civil rights guidance. In April 2012, the U.S.
Equal Employment Opportunity Commission (EEOC) published
guidance regarding the use of arrest or conviction records
in employment decisions under Title VII of the Civil Rights
Act of 1964 (Title VII). The guidance notes that in the
last twenty years, there has been a significant increase in
the number of Americans who have had contact with the
criminal justice system: in 1991, only 1.8% of the adult
population had served time in prison; by the end of 2007,
3.2% of all adults in the U.S. (one in every 31) were under
some form of correctional control involving probation,
parole, prison, or jail. Arrest and incarceration rates
are particularly high for African American and Hispanic
men, who are arrested at two to three times the rate of the
general population. Given current incarceration rates,
about one in 17 white men are expected to serve time in
prison during their lifetime, compared to one in six for
Hispanic men and one in three for African American men.
Given these disparities in the criminal justice system, the
EEOC guidance states that an employer's use of an
individual's criminal history in making employment
decisions, may, in some instances, violate the prohibition
against employment discrimination under Title VII. An
employer is liable for violating Title VII if its policy
disproportionately screens out a protected group and the
employer cannot demonstrate that the policy is job related
for the position in question and consistent with business
necessity. The guidance suggests that, because there are
few social science studies that assess whether convictions
are linked to future conduct with workplace ramifications,
it is unlikely that an employer would have a sufficient
basis to validate particular employment exclusions. The
guidance therefore recommends against blanket exclusions,
and instead recommends that employers should develop a
detailed policy for individualized screening of
applications that requires consideration of the nature and
gravity of the offense; the time that has passed since the
offense; and the nature of the job. This is the approach
taken by the Exchange in regulations implementing SB 509.
3)SUPPORT . Independent Insurance Agents and Brokers of
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California (IIAB), in support, argues that while most
individuals seeking employment or contract with Covered
California are doing so with the best intentions to help
consumers, sadly there may be some out there who see
involvement in the program as a way to scheme, manipulate,
steal, or financially abuse consumers looking to purchase
health care. Insurance agents and brokers must pass rigorous
background checks to obtain a license in California. IIAB
suggests this bill will help protect consumers from potential
abuses, preventing the creation of mistrust among consumers,
which can affect the industry as a whole.
4)OPPOSITION . The National Employment Law Project, in
opposition, states that this bill's blanket ban on certain
felonies and many misdemeanors will exclude and unfairly
discriminate against many otherwise eligible candidates, in
violation of Title VII. The American Civil Liberties Union
(ACLU) of California, in opposition, writes that this bill is
overly restrictive without furthering consumer protection and
will disproportionately impact applicants from communities of
color. ACLU writes that, by creating a lifetime ban from
certain government jobs and contracts, this bill could limit
the Exchange's ability to hire a diverse workforce that can
adequately respond to consumers' linguistic and cultural
needs. Health Access California, in opposition, writes that
75% of the uninsured and two-thirds of those eligible for
either Medi-Cal or subsidies under the Exchange are from
communities of color. Young Invincibles, also in opposition,
argues young people of color are more likely to be uninsured
than most other groups, making it particularly essential that
the outreach and enrollment workforce represents these
communities.
5)RELATED LEGISLATION .
a) AB 1428 (Conway), Chapter 561, Statutes of 2013, inserts
a reference to a specific federal document relating to
health exchange privacy and security to clarify criminal
background check requirements for employees, contractors,
and vendors who facilitate enrollment in the Exchange.
b) AB 1560 (Gorell) prohibits the Exchange from disclosing
an individual's personal information to third parties for
the purpose of eligibility or enrollment in health care
coverage unless the individual confirms specified
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information and provides prior written consent. AB 1560 is
pending in this Committee and is set for hearing April 22,
2014.
c) AB 1830 (Conway) prohibits the Exchange and its
employees from using or disclosing personal information
except as necessary to carry out specified functions under
the ACA and creates a civil penalty of up to $25,000 per
individual or entity, per use or disclosure. AB 1830 is
pending in this Committee and is set for hearing April 22,
2014.
d) AB 2301 (Mansoor) requires the Exchange to report on a
quarterly basis on enrollments and disenrollments under
QHPs purchased through the Exchange by specified
categories. AB 2301 is pending in this Committee and is
set for hearing April 22, 2014.
e) SB 509 (DeSaulnier and Emmerson), Chapter 10, Statutes
of 2013, requires fingerprint-based background checks for
all Exchange employees, contractors, volunteers, or vendors
with access to enrollees' personal information.
f) SB 974 (Anderson) prohibits the Exchange from disclosing
an individual's personal information to any other person or
entity without explicit permission and requires the
Exchange to report a disclosure in violation of this
provision within five business days. SB 974 is pending in
the Senate Appropriations Committee.
6)PREVIOUS LEGISLATION . AB 1602 (John A. P�rez), Chapter 655,
Statutes of 2010, and SB 900 (Alquist), Chapter 659, Statutes
of 2010, establish the Exchange and its powers and duties.
REGISTERED SUPPORT / OPPOSITION :
Support
Independent Insurance Agents and Brokers of California
Opposition
American Civil Liberties Union of California
American Federation of State, County and Municipal Employees,
AFL-CIO
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American Friends Service Committee, Pacific Mountain Region
Californians United for a Responsible Budget
California Pan-Ethnic Health Network
Drug Policy Alliance
Greenlining Institute
Health Access California
Legal Services for Prisoners with Children
Los Angeles Regional Reentry Partnership
National Employment Law Project
Service Employees International Union, California State Council
Service Employees International Union Local 1000
Young Invincibles
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097