BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1176 (Steinberg) - Health care coverage: cost sharing:
tracking.
Amended: April 30, 2014 Policy Vote: Health 7-1
Urgency: No Mandate: Yes
Hearing Date: May 12, 2014 Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1176 would require a health plan or health
insurer to track the accumulation of out-of-pocket expenditures
incurred by an enrollee for covered essential health benefits
and notify the enrollee when maximum out of pocket expenditure
limits have been reached.
Fiscal Impact:
Potential one-time costs of about $150,000 to adopt
regulations and potential ongoing costs in the low hundreds
of thousands to enforce the bill's provisions by the
Department of Insurance (Insurance Fund).
Costs of about $200,000 in 2014-15, $220,000 in 2015-16,
and $40,000 per year thereafter for the review of plan
filings and enforcement by the Department of Managed Health
Care (Managed Care Fund).
Background: Under current law, health insurers are regulated by
the Department of Insurance and health plans are regulated by
the Department of Managed Health Care (collectively referred to
as "carriers).
The federal Affordable Care Act and implementing legislation
enacted in California make a variety of changes to the
individual and group health insurance market. Changes to the
market include a requirement for "guaranteed issue" of coverage
if premiums are paid, a prohibition on denials of coverage for
preexisting conditions, and many other regulatory requirements.
Beginning on January 1, 2015 in the individual market and small
group market, the amount of out-of-pocket expenditures made by
enrollees due to copayments, coinsurance, or deductibles for
SB 1176 (Steinberg)
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covered essential health benefits will be limited. State law
will limit out-of-pocket expenditures to the limits allowed
under federal law (for 2014, those limits are $6,500 for an
individual and $12,700 for a family).
Proposed Law: SB 1176 would require a health plan or health
insurer to track the accumulation of out-of-pocket expenditures
incurred by an enrollee for covered essential health benefits
and notify the enrollee when maximum out of pocket expenditure
limits have been reached.
Specific provisions of the bill would:
Apply its requirements to non-grandfathered individual and
small group market health plans and health insurance
policies issued or renewed after January 1, 2015;
Require the carrier to monitor accrual of out-of-pocket
costs by an enrollee for covered essential health benefits;
Require the carrier to accept claims from the provider or
the enrollee for out-of-pocket expenditures made to
out-of-network providers providing covered benefits;
Require the carrier to reimburse the enrollee for any
out-of-pocket expenditures made above the existing maximums;
Require carriers to notify enrollees within 30 days when
the enrollee has reached the maximum out-of-pocket
expenditure limits;
Allow the enrollee to review cost sharing information and
provide additional information to the carrier.
Related Legislation: SB 639 (Hernandez, Statutes of 2013)
codified the Affordable Care Act requirements relating to
out-of-pocket maximums.
Staff Comments: The only costs that may be incurred by a local
agency under the bill relate to crimes and infractions. Under
the California Constitution, such costs are not reimbursable by
the state.