BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1046
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    SB 1046 (Beall) - As Amended:  April 8, 2014 

          Policy Committee:                             HealthVote:16-0
                       Insurance                        Vote: 11-1

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill authorizes California Department of Insurance (CDI) to  
          issue administrative penalties of up to $2,500 per day to  
          regulate health insurers that violate current state law related  
          to mental health parity.  

           FISCAL EFFECT  

          1)Negligible costs to CDI. This bill would authorize CDI to use  
            an additional enforcement tool. 

          2)Unknown, likely significant potential penalty revenue.  If  
            this bill passed, it is likely CDI would make use of penalty  
            authority to enforce mental health parity requirements, as it  
            has recently been an area of consumer concern and regulatory  
            attention.

           COMMENTS  

           1)Purpose . According to the author, this bill will correct a  
            disparity in penalty authority between CDI and the DMHC for  
            violations of mental health parity laws.  The author indicates  
            that, whereas Knox-Keene health plans are subject to a per-day  
            penalty for ongoing or continuous violations, the Insurance  
            Code has no specific penalty provision applicable to mental  
            health parity violations.  The author asserts that a per-day  
            penalty for ongoing violations can be an important tool in  
            enforcing requirements of mental health parity law due to the  
            importance of timeliness of treatment for many mental health  
            conditions.









                                                                  SB 1046
                                                                  Page  2

           2)Background  . Current law establishes mental health parity  
            requirements, under which health plans and health insurers  
            must provide coverage for the diagnosis and medically  
            necessary treatment of severe mental illnesses of a person of  
            any age, and of serious emotional disturbances of a child,  
            under the same terms and conditions applied to other medical  
            conditions.  It also requires health plans and insurers to  
            provide coverage for behavioral health treatment for pervasive  
            developmental disorder or autism, subject to the same  
            requirements as mental health parity requirements.  DMHC has  
            broad authority to assess administrative penalties for  
            violations of the Knox-Keene Act, of which mental health  
            parity is a component in the Health and Safety Code.  CDI has  
            used other means, such as negotiated agreements, to enforce  
            mental health coverage requirements.


           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081