BILL ANALYSIS �
SB 959
Page 1
SENATE THIRD READING
SB 959 (Ed Hernandez)
As Amended August 4, 2014
Majority vote
SENATE VOTE :24-7
HEALTH 19-0 APPROPRIATIONS 17-0
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|Ayes:|Pan, Maienschein, |Ayes:|Gatto, Bigelow, |
| |Ammiano, Bonilla, Bonta, | |Bocanegra, Bradford, Ian |
| |Ch�vez, Chesbro, Gomez, | |Calderon, Campos, |
| |Gonzalez, Roger | |Donnelly, Eggman, Gomez, |
| |Hern�ndez, Lowenthal, | |Holden, Jones, Linder, |
| |Mansoor, Nazarian, | |Pan, Quirk, |
| |Nestande, Patterson, | |Ridley-Thomas, Wagner, |
| |Ridley-Thomas, Rodriguez, | |Weber |
| |Wagner, Wieckowski | | |
| | | | |
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SUMMARY : Requires health plans and insurers to deliver notice
of rate changes at least 15 days in advance of the annual open
enrollment period and makes numerous additional changes to
current law related to health plans and insurers. Specifically,
this bill :
1)Limits the requirement to sell catastrophic coverage through
the California Health Benefit Exchange (Exchange, now known as
Covered California) to individual market plans and insurers
and requires small group plans and insurers in the Small
Business Health Options Program plans to offer bronze, silver,
gold, and platinum plans, but not catastrophic.
2)Includes participation fees paid by health plans and insurers
that sell products through the Exchange in the calculation
(under current law) of the index rate upon which premium rates
are based.
3)Updates the definition of "small employer," for purposes of
law governing products sold through the Exchange and for the
purposes of statutes governing essential health benefits in
the small group market, to the existing definition that
applies to nongrandfathered plans under the federal Patient
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Protection and Affordable Care Act (ACA). Beginning in 2016,
this expands the definition of small employer to include
employers with up to 100 employees, rather than 50.
4)Deletes an obsolete requirement for health plans and insurers
that offer small group coverage at a rate that is higher than
the standard employee risk rate to provide a reason for the
decision to offer coverage at a higher rate. Deletes a
similar obsolete requirement for health plans and insurers
that deny coverage for an individual.
5)Updates requirements that require plans and insurers to notify
individuals who are denied coverage about coverage options
through the Major Risk Medical Insurance Program, as
specified, to apply to only specific circumstances under which
an individual might be denied coverage: a grandfathered
individual health plan or insurer rejects the addition of a
dependent, or a Medicare supplement plan rejects an applicant
due to the applicant having end-stage renal disease. Requires
plans and insurers, in these circumstances, to also inform the
applicant about new coverage options through Covered
California, as specified.
6)Deletes a requirement for small group and individual health
plan contract and insurance policy rate filings to be
concurrent with notices to enrollees required to be delivered
60 days in advance.
7)Updates rate filing requirements to reflect the 19 rating
regions established in current law governing the individual
and small group market.
8)Corrects and updates code section references and makes other
minor, technical, and clarifying changes.
FISCAL EFFECT : According the Assembly Appropriations Committee,
negligible state fiscal effect.
COMMENTS : The author asserts this bill is necessary to make
sure there are not ambiguities or uncertainty about California's
health insurance laws, which have undergone significant changes
with the passage of the ACA. This bill is a 2014 omnibus health
insurance clean-up bill. Among its many changes, this bill
requires plans and insurers to send enrollees a notice of a rate
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increase at least 15 days prior to open enrollment. Under
current law, this notice could be sent in the middle of the open
enrollment period, making it less useful for a consumer who
might want to shop for other coverage during open enrollment.
In addition, this bill allows health plans and insurers, when
setting their premium rates in the individual market, to factor
in the fees they pay for participation in the Exchange. This
change is in conformity with federal regulations.
Health Access California, in support, writes that California has
enacted numerous pieces of landmark legislation to implement and
improve on the federal ACA. These laws have eliminated denials
of coverage based on pre-existing conditions, provided public
scrutiny of health insurance rates, and otherwise imposed
consumer protections. This bill makes numerous conforming and
clarifying corrections to these laws.
There is no opposition on file.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0004746