BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          SB 974 (Anderson) - California Health Benefit Exchange.
          
          Amended: May 6, 2014            Policy Vote: Health 8-0, Judic.  
          7-0
          Urgency: Yes                    Mandate: No
          Hearing Date: May 23, 2014      Consultant: Brendan McCarthy
          
          SUSPENSE FILE.
          
          
          Bill Summary: SB 974 would require the California Health Benefit  
          Exchange (Covered California) to allow an applicant to indicate  
          whether he or she would like assistance in completing the  
          application from a certified insurance agent or enrollment  
          counselor. If an applicant opts not to receive assistance, the  
          bill would prohibit Covered California from sharing the  
          applicant's personal information with a certified insurance  
          agent or certified enrollment counselor.

          Fiscal Impact: 
              One-time costs of about $350,000 to modify information  
              technology systems by Covered California to allow applicants  
              to indicate whether they would like assistance (federal  
              funds or special fund).

              Potential minor costs to revise paper applications for  
              health care coverage by the Department of Health Care  
              Services (General Fund and federal funds). The state uses a  
              single paper application for the Medi-Cal program and  
              coverage through Covered California. In order to comply with  
              the requirements of this bill, the Department would likely  
              need to update the paper application to opt out of future  
              contacts. The costs to do so are not expected to be  
              significant since the Department regularly revises those  
              forms.

          Background: Under the federal Affordable Care Act, states are  
          required to establish American Health Benefit Exchanges. If a  
          state does not create an Exchange, the federal government will  
          do so. Within the Exchanges, individuals will be able to  
          purchase health care coverage with standardized benefit packages  
          and actuarial values. In addition, individuals with incomes  








          SB 974 (Anderson)
          Page 1


          between 100 percent and 400 percent of the federal poverty level  
          will be eligible for subsidies for coverage purchased in the  
          Exchanges.

          California has established its own California Health Benefit  
          Exchange (referred to as "Covered California"). In order to  
          establish eligibility for subsidies, Covered California will  
          operate call centers, contract with counties, and utilize  
          certified insurance agents and certified enrollment counsellors  
          to help consumers navigate the eligibility and enrollment  
          process.

          Federal guidance requires state-run Exchanges to screen  
          employees, vendors, volunteers, and anyone who will have access  
          to sensitive medical or financial information for previous  
          criminal convictions or arrests.

          In general, consumers can select health care coverage through  
          Covered California during open enrollment periods. (Open  
          enrollment periods apply to qualifying health plans sold through  
          Covered California and on the individual market. Individuals may  
          apply for, and if eligible, gain coverage through the state's  
          Medi-Cal program year-round). The next open enrollment period in  
          Covered California begins on October 1, 2014.

          During the recent open enrollment period, Covered California  
          shared applicant contact information (such as a name, phone  
          number, and email address) for about 40,000 applicants who had  
          not completed their application with certified insurance agents  
          and/or enrollment counsellors. 

          Proposed Law: SB 974 would require Covered California to allow  
          an applicant to indicate whether he or she would like assistance  
          in completing the application from a certified insurance agent  
          or enrollment counselor. 

          If an applicant opts not to receive assistance, the bill would  
          prohibit Covered California from sharing the applicant's  
          personal information with a certified insurance agent or  
          certified enrollment counselor.

          The bill specifies that its provisions would become operative on  
          October 1, 2014.









          SB 974 (Anderson)
          Page 2


          This bill is an urgency measure.

          Related Legislation: 
              AB 1829 (Conway) would prohibit Covered California from  
              hiring or contracting with someone who has been convicted of  
              certain crimes. That bill failed passage in the Assembly  
              Health Committee.
              AB 1830 (Conway) would place limitations on Covered  
              California's ability to use or disclose personal  
              information. That bill failed passage in the Assembly Health  
              Committee.
              SB 1560 (Gorell), an urgency measure, would prohibit  
              Covered California from disclosing an applicant's personal  
              information without written permission. That bill is pending  
              in the Assembly Health Committee.

          Staff Comments: Covered California indicates that it will be  
          able to make the required information technology improvements to  
          comply with the requirements of the bill by October 1, 2014.