The following is a brief summary of some of the new laws affecting life, health and disability insurance in California. Unless otherwise noted, the bills described here apply to contracts issued, amended, delivered or renewed on or after January 1, 2011.Health Care Reform
The California legislature has responded to federal health care reform with the following legislation:Labor and Employment Bills
AB 1602 & SB 900 – California Health Benefits Exchange
Under the federal health care reform law, in 2014 states will set up state-run “exchanges” that will offer health coverage to individuals and small employers. AB 1602 enacts the California Patient Protection and Affordable Care Act which, along with SB 900, sets up an exchange in this state (the California Health Benefits Exchange). A board will implement procedures for certifying the plans that will be offered through the Exchange, and for certifying the individuals who will be exempt from the individual penalties mandated by the health care reform law.
The Exchange will include a choice of five levels of coverage offered by insurers and HMOs contracting with the Exchange. Carriers and HMOs participating in the Exchange will be required to offer, market, and sell all products made available to individuals and small employers in the Exchange to individuals and small employers purchasing coverage outside the Exchange. AB 1602 also limits the products that carriers and HMOs (whether or not they participate in the Exchange) will be able to offer as of January 1, 2014.
AB 1887 – State Major Risk Medical Insurance Program
This bill implements part of the federal health reform law relating to high-risk pools for the uninsured. This bill establishes the Federal Temporary High Risk Health Insurance Fund as a continuously appropriated fund to administer the qualified high risk pool required by federal law, thereby making an appropriation. The bill repeals these provisions on January 1, 2020.
AB 2244 – Pre-Existing Conditions: Dependents
This bill conforms California law to the health care reform law’s provisions on pre-existing condition limitations for children and adults.
AB 2345 – Health Care Coverage: Federal Health Care Reform: Preventive Services
This bill conforms California law to the health care reform law’s provisions on providing preventive services without cost sharing.
SB 220 – Health Care Coverage: Tobacco Cessation Services
This bill conform California law to the health care reform law’s provisions on providing preventive services without cost sharing and, in particular, tobacco cessation services.
SB 1088 – Overage Dependents
SB 1088 conforms California law to the health care reform law’s provisions on overage dependents.
The following legislation also affects employers:*********
AB 569 – Meal Periods: Exemptions
Existing law prohibits, subject to certain exceptions, an employer from requiring an employee to work more than 5 hours per day without providing a meal period and, notwithstanding that provision, authorizes the Industrial Welfare Commission to adopt a working condition order permitting a meal period to commence after 6 hours of work if the order is consistent with the health and welfare of affected employees. This bill exempts from these provisions employees in a construction occupation, commercial drivers, employees in the security services industry employed as security officers, and employees of electrical and gas corporations or local publicly owned electric utilities, if those employees are covered by a valid collective bargaining agreement containing specified terms, including meal period provisions.
AB 1814 – Discrimination in Employment
The Fair Employment and Housing Act (FEHA) protects and safeguards the right and opportunity of all persons to seek, obtain, and hold employment without discrimination, including discrimination on the basis of age. This bill adds a clause to FEHA that specifies that FEHA does not prohibit an employer from providing health benefits or health care reimbursement plans to retired persons that are altered, reduced, or eliminated when the retiree becomes eligible for Medicare health benefits. The provision applies to plans in effect on or after January 1, 2011. It is intended that this provision will be consistent with federal regulations issued pursuant to the ADEA.
AB 2778 – Disability Insurance: Voluntary Plans
This bill, through December 31, 2014, allows the Employment Development Department to approve a voluntary plan that is administered by a small-business-third-party administrator that administers voluntary disability plans on behalf of its clients, subject to specified requirements.
SB 1304 – Employment: Leave and Benefits
Existing law requires that employees of the state who have exhausted all available sick leave be permitted to take a leave of absence with pay, not exceeding 30 days, for the purpose of organ donation, and not exceeding 5 days for bone marrow donation. This bill requires private employers to permit employees to take similar paid leaves of absence for organ and bone marrow donation. When the employees return to work, they must be restored to the same position held by the employee when the leave began or an equivalent position. The bill creates a private right of action to enforce the law. The bill applies to an employer with 15 or more employees.
Please remember that Federal law may preempt some of these bills to the extent they attempt to regulate self-funded employee benefit plans. Garner Insurance Services does not practice law. Please seek qualified counsel if you need legal advice. For group insurance brokerage services, please call John Garner at (626) 351-2300. Visit us on the web at http://www.garnerbenefits.com.