CA SB 1446 allows certain small group health insurance policies and HMO contracts in California to avoid compliance with many PPACA reforms through the end of 2015. Federal guidance implementing PPACA provides a similar exemption (called “transition relief”) for small group (and individual) health plans, but the federal exemption is through September 30, 2017. However, the federal relief is available only if a state also approves it. If enacted, SB 1446 would take effect immediately.
SB 1446 applies only to small group (employers with under 50 employees) health insurance policies and HMO contracts, but not to individual insurance policies. SB 1446 would exempt such group policies from certain California and PPACA requirements, such as the obligation to cover the 10 “essential health benefits” (EHBs), the prohibition on pre-existing conditions limitations for any participants, and the requirement that carriers set premium rates based only on age, geographic area and family tier.
Specifically, CA SB 1446 would allow a small employer health care service plan (HMO) contract or a small employer health insurance policy that was in effect on October 1, 2013, that is still in effect as of the effective date of SB 1446, and that does not qualify as a grandfathered health plan under PPACA, to be renewed until January 1, 2015, and to continue to be in force until December 31, 2015. The bill would exempt those HMO contracts and insurance policies from various provisions of state law that implement specified PPACA reforms and would require that the contracts and policies be amended to comply with those provisions by January 1, 2016, in order to remain in force on and after that date. The bill would require that these provisions be implemented only to the extent permitted by PPACA.
The CA bill as originally introduced mirrored the similar federal transition relief, which exempts such policies from certain PPACA reforms through September 30, 2017. But SB 1446 was recently amended to extend the relief only through the end of 2015.
SB 1446 (Sen. DeSaulnier) would add Section 1367.012 to the Health and Safety Code, and add Section 10112.300 to the Insurance Code, relating to health care coverage in the small employer market, and declaring the urgency thereof, to take effect immediately.
States Seek Alternative Exchange Funding Before Federal Aid Expires
Federal funding for state insurance exchanges set to expire in 2015, so many states that run their own health insurance exchanges are concerned about how to fund their exchanges once federal funding ends in 2015. For example, California has authorized a $13.95 monthly assessment on plans purchased through its exchange, according to an article in Modern Healthcare .
According to Modern Healthcare, states have received at least $4.7 billion to build and operate the exchanges so far.
Various states have proposed solutions to handle the cost of running an exchange going forward. For example, in addition to California’s plan to impose a monthly assessment of $13.95 on health insurance policies purchased through Covered California, Colorado and Minnesota officials have approved taxes of at least 3% on 2015 premiums for exchange plans.
Summary of Enrollment Information in Covered California – and Which Health Insurers did Enrollees Select?
By April 15 almost 1.4 million Californians had enrolled in Qualified health plans (QHPs) offered on Covered California, the California Exchange. According to Covered California, about 85% of these 1.4 million had paid their premium for the first month (for coverage effective May 1). Ninety-four percent of the 1.4 million enrolled with the four largest health insurers in the state, and the other 6% enrolled with the seven other health plans offered on Covered California (many of these were smaller, regional plans). Among the four largest carriers, the breakdown was:
- 30.5% enrolled in Anthem (425,058 people)
- 27.3% enrolled in Blue Shield
- 18.9% enrolled in Health Net third
- 17.3% enrolled in Kaiser
Premiums were often lowest for Health Net’s HMO plans (in the geographic regions where Health Net was available), and often highest for Kaiser. Anthem and Blue Shield premiums were often in the middle, depending on the area.
Approximately 88% of enrollees are eligible for premium tax credits, according to Covered California.
Of the 1.4 million enrollees in Covered California, 62% selected the Silver plans (which provide 70% actuarial value and have a $2,000 individual deductible), and 26% selected the bronze plans (60% actuarial value and $5,000 annual deductible).
In addition to Covered California enrollment, an unknown number of Californians bought or renewed health insurance policies outside the state exchange, and more than 1.5 million Californians enrolled—or were deemed eligible to enroll—in Medi-Cal, the California version of Medicaid.
(For additional information, see LA Times article: http://www.latimes.com/business/la-fi-anthem-exchange-20140422-story.html
Covered California Re-opens Enrollment Period for COBRA Policyholders
Beginning Thursday, May 15, Covered California will launch a limited-time special-enrollment period for people who have COBRA health insurance and would like to switch to an exchange plan.
People who have health coverage through COBRA (the Consolidated Omnibus Budget Reconciliation Act) will be eligible to shop for and buy coverage through Covered California from May 15 through July 15, 2014. The two-month window mirrors a U.S. Department of Health and Human Services (HHS) ruling announced May 2 that allows COBRA enrollees to buy plans through the federal exchange until July 1.
Covered California Press Release, http://news.coveredca.com/
Kaiser Ranks Highest in California for Health Plan Satisfaction
A new J.D. Power & Associates survey finds that Kaiser Permanente for the seventh-consecutive year received the highest member satisfaction score among all California health plans, with a score of 756 out of 1,000. California health plans had an average member satisfaction score of 680, compared with the national average of 669. Los Angeles Times‘ “Money & Co.” (California Healthline 3/11/14, http://www.californiahealthline.org/articles/2014/3/11/kaiser-ranks-highest-in-california-for-health-plan-satisfaction )
California Makes It Harder for Insurers to Deny Autism Treatment
“In tightening its rules on covering behavioral intervention for children with autism, California is tackling a problem encountered by numerous states seeking to improve access to therapies for children with autism … The new rules make it clear that insurers must cover behavioral interventions for children with autism at the same level that they cover visits to a medical doctor[.]” (Reuters) http://www.reuters.com/article/2014/04/17/us-usa-california-autism-idUSBREA3G02W20140417?feedType=RSSHYPERLINK
Campos Plans Proposal To Close Healthy San Francisco Loophole
“San Francisco Supervisor David Campos is proposing legislation that would ensure money that employers deposit into workers’ health savings accounts [under the city’s Healthy San Francisco program] is actually used for health care expenses, instead of being recouped by the businesses, the San Francisco Chronicle reports.” San Francisco Mayor Ed Lee vetoed a similar measure by Campos in 2011. Under existing rules, businesses can claim unused money in their workers’ health savings accounts after two years.
(California Healthline, 3/11/14, citing article in San Francisco Chronicle) http://www.californiahealthline.org/articles/2014/3/11/campos-plans-proposal-to-close-healthy-san-francisco-loophole