BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1446
                                                                  Page  1

          Date of Hearing:   June 18, 2014

                         ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   SB 1446 (DeSaulnier) - As Amended:  May 27, 2014 

          Policy Committee:                              HealthVote:18-0

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

           SUMMARY  

          This bill delays until January 1, 2015 the requirement that  
          health plans and policies purchased by small employers comply  
          with specified reforms in the federal Patient Protection and  
          Affordable Care Act (ACA), and includes related changes such as  
          notice requirements.

           FISCAL EFFECT  

          Potential minor one-time costs to the Department of Insurance and  
          the Department of Managed Health Care to incorporate the bill's  
          requirements into their regulation of health plans and policies  
          (Insurance Fund/Managed Care Fund).  

           COMMENTS  

           1)Purpose . This bill seeks to conform California state law to a  
            transition policy announced by the federal government, which  
            allows small groups to continue offering non-compliant plans  
            and policies for a period of time, even though the plans do not  
            qualify as "grandfathered plans."  This bill is sponsored by  
            the Department of Insurance. 

           2)Background  .  The ACA requires plans and policies in the  
            individual and small group markets to comply with numerous  
            market reforms, including the issuance of coverage to anyone  
            who applies, coverage of a certain minimum set of benefits  
            called essential health benefits, and limitations on  
            out-of-pocket costs, among others. State and federal law  
            already exempt grandfathered plans-plans in effect on March 23,  
            2010 that are substantially the same and have had continuous  
            enrollment-from ACA reforms. 








                                                                  SB 1446
                                                                  Page  2


            ACA reforms are generally effective for all other individual  
            and small-group plans issued or renewed on or after January 1,  
            2014.  President Obama announced a transitional policy in  
            November 2013, however, to allow employers to renew  
            non-compliant plans until October 1, 2014 without running afoul  
            of federal law. This policy was later changed to allow  
            employers to renew non-compliant plans until October 1, 2016.  

            Employers are only allowed to make use of this transitional  
            policy to the extent allowed by state law, and California law  
            currently precludes employers from opting to keep non-compliant  
            plans.  This bill would allow them to renew these plans until  
            January 1, 2015 and keep them in effect until December 31,  
            2015. 

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