BILL ANALYSIS �
SB 1046
Page 1
SENATE THIRD READING
SB 1046 (Beall)
As Amended April 8, 2014
Majority vote
SENATE VOTE :35-0
HEALTH 16-0 APPROPRIATIONS 15-2
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|Ayes:|Pan, Maienschein, |Ayes:|Gatto, Bigelow, |
| |Ammiano, Bonilla, Bonta, | |Bocanegra, Bradford, Ian |
| |Ch�vez, Chesbro, Gomez, | |Calderon, Campos, Eggman, |
| |Gonzalez, Roger | |Gomez, Holden, Linder, |
| |Hern�ndez, Lowenthal, | |Pan, Quirk, |
| |Nazarian, Nestande, | |Ridley-Thomas, Wagner, |
| |Ridley-Thomas, Rodriguez, | |Weber |
| |Wieckowski | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Donnelly, Jones |
| | | | |
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SUMMARY : Creates administrative penalties up to $2,500 per day
for health insurers regulated by the California Department of
Insurance (CDI) that violate current law related to mental
health parity.
EXISTING LAW :
1)Establishes CDI to regulate health insurers under provisions
of the Insurance Code and the Department of Managed Health
Care (DMHC) to regulate health plans under the Knox-Keene
Health Care Service Plan Act of 1975 (Knox-Keene Act).
2)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.
3)Authorizes the Director of the DMHC to, after appropriate
notice and opportunity for a hearing, suspend or revoke a
health plan license or assess administrative penalties if the
SB 1046
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Director determines that the licensee has committed any acts
or omissions constituting grounds for disciplinary action.
Includes in the list of acts or omissions any conduct that
constitutes fraud or dishonest dealing or unfair competition,
as defined.
4)Makes any person who violates any provision of the Knox-Keene
Act liable for a civil penalty not to exceed $2,500 for each
violation. Limits enforcement actions to four years after the
violation. Under current regulations, makes a violation that
is ongoing and continuous subject to a civil penalty up to
$2,500 for each day that the violation continues, with each
enrollee harmed constituting a separate and distinct
violation.
5)Under the Insurance Code, makes any person who engages in any
unfair method of competition or any unfair or deceptive act or
practice liable to the state for a civil penalty up to $5,000
for each act, or up to $10,000 for willful acts. Gives the
Insurance Commissioner the discretion to establish what
constitutes an act. When the violation related to issuance,
amendment, or servicing of a policy or endorsement is
inadvertent, requires all of those acts to be a single act.
Specifies procedures for hearings and appeal of penalties
under the Administrative Procedure Act.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill would have negligible costs to CDI, as it
would authorize CDI to use an additional enforcement tool. This
bill would have unknown, likely significant potential penalty
revenue. If this bill passes, 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 : California's mental health parity law, enacted in
1999, requires all carriers (large group, small group, and
individual) to cover the diagnosis and medically necessary
treatment of severe mental illness of a person of any age, and
of serious emotional disturbances of a child. This coverage is
required to be at parity with other medical conditions: no
differences in maximum lifetime benefits; copayments,
deductibles; or cost sharing are permitted. Moreover, SB 964
(Steinberg), Chapter 650, Statutes of 2011, specifically
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requires health plans and insurers to provide behavioral health
treatment for autism in a manner consistent with current state
mental health parity law and requires plans and insurers to
maintain adequate networks of providers, as specified.
CDI, the sponsor of this bill, argues that DMHC regulations
allow for a violation that is ongoing and continuous to be
subject to a civil penalty for each day the violation continues,
but CDI, under current law, cannot multiply the penalty by the
number of days the violation occurs. CDI argues by rectifying
this disparity, this bill will enhance current enforcement
efforts to ensure consumers have access to mental health
services in compliance with the law. Autism Research Group, in
support, writes that health plans and insurers routinely impose
caps on autism treatment that violate the mental health parity
law, and this bill would help prevent the typical delay and
denial that Californians seeking treatment currently experience.
Supporters write that this bill will give CDI appropriate
authority to enforce California's mental health parity law.
There is no opposition on file.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0004323