BILL ANALYSIS �
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THIRD READING
Bill No: AB 1877
Author: Cooley (D), et al.
Amended: 8/19/14 in Senate
Vote: 27 - Urgency
SENATE HEALTH COMMITTEE : 8-0, 6/25/14
AYES: Hernandez, Morrell, Beall, De Le�n, DeSaulnier, Evans,
Monning, Nielsen
NO VOTE RECORDED: Wolk
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 77-0, 5/28/14 - See last page for vote
SUBJECT : California Vision Care Access Council
SOURCE : VSP Global
DIGEST : This bill establishes the California Vision Care
Access Council (Council) within state government and requires
the Council to construct, manage, and maintain an Internet Web
site to inform consumers about individual and employer-based
vision plans offered by participating carriers. This bill
imposes specified requirements on participating carriers and
also requires the Council to establish other requirements for
carrier participation and the standards and criteria for
participating vision plans that are in the best interests of
individuals and employers eligible to purchase coverage through
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Covered California. This bill requires participating vision
plans to be issued on a guarantee issue basis without
preexisting condition provisions and requires a participating
carrier to make available to consumers an electronic directory
of contracting vision care providers.
ANALYSIS :
Existing law:
1.Establishes in state government the California Health Benefit
Exchange (Covered California), an independent public entity
not affiliated with an agency or department.
2.Requires Covered California to be governed by an executive
board, consisting of five members who are residents of
California. Of the board members, two are appointed by the
Governor, one is appointed by the Senate Committee on Rules,
and one is appointed by the Speaker of the Assembly. The
Secretary of the California Health and Human Services or
his/her designee serves as a voting, ex officio member.
3.Prohibits Covered California board members or staff from being
employed by, a consultant to, a member of the board of
directors of, affiliated with, or otherwise a representative
of, a carrier or other insurer, an agent or broker, a health
care provider, or a health care facility or health clinic
while serving on the board or on the staff of Covered
California.
4.Prohibits a member of the board or of the staff of Covered
California from being a member, a board member, or an employee
of a trade association of carriers, health facilities, health
clinics, or health care providers while serving on the board
or on the staff of Covered California. Prohibits a member of
the Covered California board or of the staff of Covered
California from being a health care provider unless he/she
receives no compensation for rendering services as a health
care provider and does not have an ownership interest in a
professional health care practice.
5.Establishes as California's Essential Health Benefits (EHBs)
the Kaiser Small Group HMO plan along with 10 Affordable Care
Act (ACA)-mandated benefits and requires coverage of these
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EHBs by non-grandfathered individual and small group health
plans, including qualified health plans (QHPs), including
pediatric services, which include oral and vision care.
6.Prohibits, under federal regulations, a plan or insurer
offering EHB from including routine non-pediatric dental
services, routine non-pediatric eye exam services,
long-term/custodial nursing home care benefits, or
non-medically necessary orthodontia as EHB.
7.Prohibits federal law from being construed to prohibit a
health plan or insurer from providing benefits in excess of
the EHB.
This bill:
1.Establishes in state government, the Council, as an
independent public entity not affiliated with an agency or
department, governed by the executive board of Covered
California.
2.Requires each member of the Covered California board to have
the responsibility and duty to meet the requirements of this
bill, the ACA, and all applicable state and federal laws and
regulations to serve the public interest of individuals and
small business seeking health care coverage through the
Council, and to ensure the operational well-being and fiscal
solvency of the Council.
3.Prohibits any liability in a private capacity on the part of
Covered California or any member of the Covered California
board, or any officer or employee of Covered California, for
or on account of any act performed or obligation entered into
in an official capacity when done in good faith, as specified.
4.Requires the Council, to the extent permitted by the ACA, to
establish interagency agreements with Covered California,
allowing the Council to utilize the executive, administrative,
and other related resources of Covered California, including,
but not limited to the staff employed by Covered California
and the programming and information technology infrastructure
supporting Covered California. Authorizes the Council to
establish interagency agreements with other agencies for the
purposes of contracting for executive, administrative, and
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other related services, if necessary.
5.Prohibits a member of the Covered California board or staff of
the Council from being employed by, a consultant to, a member
of the board of directors of, affiliated with, or otherwise a
representative of, an optical company that manufactures, sells
or distributes lenses, frames, or other vision care appliance.
6.Requires the Council to:
A. Construct, manage, and maintain an Internet Web site,
separate from the Internet Web site established by Covered
California, to inform consumers about participating
individual and employer-based vision plans that are
available to qualified individuals and qualified employers.
B. Requires the Internet Web site offer full and complete
carrier information to consumers and is required to allow
enrollees and prospective enrollees to obtain standardized
comparative information on the participating vision plans.
C. Work cooperatively with Covered California to establish
a direct link from the Internet Web site maintained by
Covered California to an Internet Web site maintained
described in (A).
D. Determine the minimum requirements to be considered as a
carrier in the Internet Web site described in (A) and the
standards and criteria for participating vision plans.
Requires consistent and uniform application of these
requirements, and require at a minimum:
(1) That carriers meet a minimum net asset threshold as
determined by the Council and possibly minimum annual
premium revenue;
(2) That carriers have, and maintain, an Internet Web
site;
(3) That carriers demonstrate adequate vision care
networks sufficient to ensure convenient geographic
access to vision care in California;
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(4) That carriers demonstrate adequate multilingual
consumer service and benefit delivery capabilities; and
(5) Any other requirement determined necessary by
Covered California based on input from stakeholders, as
specified.
A. Requires participating vision plans to do both of the
following:
(1) Make available to the public and regulators, as
applicable, accurate and timely disclosure in plain
language of:
(a) Claims payment policies and practices;
(b) Periodic financial disclosures;
(c) Data on enrollment;
(d) Data on disenrollment;
(e) Data on the number of claims denied; and
(f) Information on cost sharing and
out-of-network payments.
(1) Permit individuals to learn, in a timely manner
upon request, the amount of cost sharing, including
deductibles, copayments, and coinsurance that an
individual would be responsible for paying with respect
to a specific item or service by a participating
provider.
A. Assess a charge on the participating vision plan that is
reasonable and necessary to support the development,
operations, and prudent cash management of the Council.
B. Annually publish a report on the implementation and
performance of the Council functions during the preceding
fiscal year on the Internet Web site, and be responsive to
requests for additional information from the Legislature,
including providing testimony on state legislation or
policy.
C. Provide a choice of carrier in each region of the state.
D. Require, as a condition of participation, a vision plan
to do the following:
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(1) Not impose any preexisting condition provision upon
any enrollee.
(2) With respect to an individual vision plan, be
offered, marketed, and sold to all individuals and
dependents in each service area in which the carrier
provides or arranges for vision care services.
(3) With respect to an employer-based vision plan, be
offered, marketed, and sold to all employers and eligible
employees and dependents in the applicable group market
in each service area in which the carrier provides or
arranges for vision care services.
(4) With respect to an employer-based vision plan, be
offered, marketed, and sold to all employers and eligible
employees and dependents in the applicable group market
in each service area in which the carrier provides or
arranges for vision care services.
1.Requires a participating carrier to use a standardized format
for presenting vision plan options to the Council.
2.Requires the Council to require a participating carrier to
make available to consumers and regularly update an electronic
directory of contracting vision care providers in the network.
3.Prohibits the Council from being subject to licensure or
regulation by the Department of Insurance or the Department of
Managed Health Care.
4.Requires participating carriers to have and maintain a license
or certificate of authority from, and be in good standing
with, their respective regulatory agencies.
5.Specifies that nothing in these provisions should be construed
as to require a QHP to contract with the Council in order to
offer coverage for adult vision through Covered California.
6.Establishes the California Vision Care Access Trust Fund
(Fund) and for monies collected to be deposited in the Fund,
and upon appropriation by the Legislature, shall be available
to the Covered California Board. Implements some, but not all
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provisions of this bill, contingent on a determination by
Covered California that sufficient monies exist in the Fund to
implement the provisions. Requires Covered California to
provide notice to the Joint Legislative Budget Committee and
the Director of Finance when the financial threshold has been
reached.
7.Contains an urgency clause that will make this bill effective
upon enactment.
Background
Covered California Efforts . According to a September 19, 2013,
Board Brief of Covered California, under the ACA, pediatric
vision care is defined as one of the 10 EHBs, while adult vision
care is considered a supplemental, or ancillary, benefit. Since
Covered California consumers who enroll their children in vision
benefits through a QHP may desire to access similar benefits for
themselves, Covered California endorsed the objective of
providing access to supplemental vision benefits. On October
25, 2012, the Covered California board adopted a policy to offer
supplemental dental and vision benefits in the individual and
Small Business Health Options Program (SHOP) Exchanges.
Vision plan providers. According to the California Department
of Insurance (CDI), there were 37 CDI-regulated companies that
provide vision coverage for 139,936 lives in the individual
market and 2,595,070 lives in the group market in 2012. The
Department of Managed Health Care currently licenses ten vision
plans. There are 6.7 million enrollees in vision plans, and
almost 13 million enrollees in combination vision/dental plans.
Vision Service Plan (VSP) is the leading vision benefit plan,
with 65 million members in the U.S.
Comments
According to the author's office, this bill will establish the
California Vision Care Access Act to provide California
consumers the opportunity to shop for adult, individual vision
care. Covered California currently offers pediatric-only vision
benefits. This leaves adult consumers without access to
affordable vision coverage when purchasing a health plan through
Covered California. Vision care is a critical part of everyday
life and this bill will ensure that Californians have access to
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a single, competitive platform to purchase affordable,
stand-alone, adult vision coverage.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time administrative costs in the hundreds of thousands to
low millions for administrative tasks such as developing
policies regarding the new marketplace, adopting regulations,
conducting stakeholder outreach, and overseeing the management
of funds donated to the new Vision Care Access Council for
development of the marketplace (special fund).
One-time costs likely in the low millions to create a website
for comparing vision plans (special fund).
Ongoing administrative costs likely in the millions of dollars
per year for the Council to manage the new system, review
filings by participating vision plans, and oversee financial
transactions conducted through the new marketplace (special
fund).
One-time costs of about $160,000 over two years and ongoing
costs of about $100,000 for enforcement and consumer
assistance by the Department of Insurance (Insurance Fund).
SUPPORT : (Verified 8/19/14)
VSP Global (source)
Greater Sacramento Urban League
National Association of Social Workers, California Chapter
Vision Plan of America
ARGUMENTS IN SUPPORT : According to the sponsor, VSP Global,
this bill is an outgrowth of collaborative efforts to include
supplemental vision care offerings through Covered California.
Federal guidelines published in March 2013 prohibit state-based
exchanges from directly offering ancillary insurance products,
like adult vision care, unless certain conditions are met.
Specifically, this guidance stated that these products can only
be offered by separate state programs that share resources and
infrastructure with our state exchange. AB 1877 responds to
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this guidance by establishing the Vision Care Access Council for
the specific purpose of offering affordable, stand-alone adult
vision coverage. This program is modeled after the many
industry-funded marketing programs that currently exist in
California state government. The sponsor indicates based on
available information, between a low of about three million
adults to as many as just over five million adults could benefit
from access to the options presented by the Vision Care Access
Council.
ASSEMBLY FLOOR : 77-0, 5/28/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Beth
Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Donnelly, Frazier, Vacancy
JL:e 8/19/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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