Employee Benefits Compliance

New California Laws Effective in 2017

With the all the political changes at the Federal level since last November 8th, this year’s update on new California laws kind of got lost in the shuffle. So here, better late than never, is a list and brief summary of selected California bills that may be of interest to employers. Most of these are in the areas of Employment, Insurance and Health Benefits. Most bills are effective January 1, 2017; other effective dates are noted, where applicable. Copies of all bills are available at leginfo.ca.gov.

AB 10 (signed in 2014): Under AB 10, the minimum monthly salary for exempt employees in California is $3,466.67, since January 1, 2016. (This equates to $41,600.04 annually) This applies even though the federal increase in minimum salary for exempt employees (which was scheduled to be effective December 1, 2016) was delayed indefinitely by a federal court.

AB 72 – (Bonita, D) “Surprise medical bills” or Balance Billing: Out-of-Network Coverage. Limits a patient’s cost-sharing amount for services by an out-of-network provider at an in-network facility, to the amount the patient would have paid to an in-network provider and counts the cost-sharing amount toward the individual’s deductible and out of pocket limit. Example of such bills would be if a patient uses an in-network hospital or clinic and is treated by an out-of-network provider (one who does not contract with the insurer) such as a radiologist or anesthesiologist. Also requires insurers to pay out-of-network providers the greater of: 125% of the amount Medicare pays for the service or the insurer’s average contracted rate. This is a bi-partisan consumer protection bill, intended to protect health care consumers from unexpected balance billing. (Chapter 492) (9-23-16) Effective July 1, 2017

AB 339 – Outpatient Prescription Drugs (Chapter 619) (2015 Bill)

AB 796 – Autism and Pervasive Developmental Disorders (Chapter 493). California requires that policies/ contracts must cover behavioral health treatment for pervasive developmental disorder or autism, but this requirement was set to expire 1/1/17. This bill deletes the 1/1/17 sunset date for providing coverage for autism treatment.

AB 908 – Disability Comp, Paid Family Leave (PFL). Removes the 7-day waiting period for PFL benefits, and increases PFL and SDI benefits. (Changes are effective January 1, 2018)

AB 1305 – High Deductible Health Plans (HDHPs): Limitations on Cost Sharing: Family Coverage (Chapter 641) (2015 bill). Effective January 1, 2017, large group health plans that are HDHPs must have “embedded individual deductibles.” To be compliant with CA law and be HSA-compatible, the deductible must be at least $2,600 for an individual who has family coverage under a high-deductible health plan.

AB 1668 (Calderon, D) “Right to try” legislation – Allows (but does not require) pharmaceutical companies to offer experimental drugs that have not yet been approved by the US Food and Drug Administration (FDA) to terminally ill Californians who failed to qualify for clinical trials, have exhausted other FDA-approved treatment options and have the approval of two physicians. Gov. Brown vetoed similar legislation last year, but the Legislature passed it again this year and the Gov. signed it. (9-27-16)

AB 1732 – Single-occupancy restrooms must be identified with signage as “all gender” facilities (Effective March 1, 2017)

AB 1843 – Prohibits employers from seeking or using juvenile criminal history, from job applicants. Labor Code 432.7.

AB 1847Action Item. Existing notice must be amended to provide information on employment earned income tax credit under California law, as well as under federal law. (Effective January 1, 2017)

AB 2308 – Information to Students (Chapter 570). California Health Care Coverage Act of 2016. California colleges and universities must provide CSU and Community College students with information on affordable insurance options (including Medi-Cal), beginning with the 2017-18 academic year.

AB 2337 – Requires written notice to new employees, and current employees upon request, regarding domestic violence, sexual assault, and stalking protections. California Labor Commissioner must publish written notice employers can use. Notice is required once Labor commissioner publishes the notice.§ Lab Code §230 and §230.1.

AB 2535 – Itemized statements on pay stubs. Clarifies existing law relating to disclosures on pay-stubs for exempt salaried workers: For exempt employees, total hours worked are NOT required to be tracked and reported.

AB 2883 – Workers’ Compensation. Changes definition of “employee” who can be excluded from coverage. Cannot exclude officers, directors and partners from coverage under Workers’ Compensation policy unless they sign a waiver under penalty of perjury and file it with the insurer. (Effective January 1, 2017)

Various Assembly and Senate bills enacted include various expansions to the California Fair Pay Act, which was effective January 1, 2016.

AB 1676 – Expands Fair Pay Act to prohibit employers from relying on prior salary alone to justify disparity in compensation. Wage Discrimination (Chapter 856).

SB 1063 – Expands Fair Pay Act protections by specifically prohibiting wage differentials based on race or ethnicity. (Chapter 866)

SB 1001 – In connection with the employment verification and re-verification process, expands what constitutes “unfair immigration-related practices.” For example, prohibits employers from requiring additional documents that are not required under federal I-9 process. (Also note: New I-9 form for 2017! Employers must start using by Jan. 22, 2017.)

SB 1241 – Prohibits employers from requiring employees who live and work in California to agree, as a condition of employment, to a non-California venue or choice of law, in the event of a lawsuit. Employers need not change contracts already in place, but must comply with SB 1241 if any changes or modifications are made to an existing contract after Jan. 22.

End of bills expanding the California Fair Pay Act.

SB X2-7 – Adds e cigarettes and vaporizers to smoke-free workplace law, and eliminates most exemptions. Effective June 9, 2016)

SB 3 – Amends California Healthy Workplaces Healthy Families Act, effective Jan. 1, 2017. Also Increased CA’s minimum wage, as of 1/1/17.

SB 482 (Lara, D) – Intended to prevent “doctor shopping” by prescription drug addicts, this law requires doctors and other health care providers, before prescribing pain killers and other medications, to check a patient’s prescription history in a state database (the Controlled Substance Utilization Review and Evaluation System (CURES)).

SB 623 – Workers’ Compensation Benefits. A worker shall not be excluded based on citizenship.

SB 908 – Premium Rate Change: Notice (Chapter 498) Requires insurers to notify individuals and small businesses directly in writing — at least 60 days before a rate change in their health insurance, if the change would be considered “unreasonable” by state officials. The intent is to give consumers sufficient time to shop around for other coverage if they choose. Existing law requires that “unreasonable” rate hikes be posted online by one of the two state agencies that regulate insurers — the Department of Managed Health Care or the California Department of Insurance. However, the bill’s supporters claimed that consumers don’t check online, so insurers should send written notice at least 60 days in advance.

SB 1234 – Retirement Savings Plans (Chapter 804). Employers with 5 or more employees must allow for payroll deposit into retirement savings plans.

NOTE: The Following Bill was Vetoed by Governor Brown:

SB 654 – The bill (The New Parent Leave Bill) would have required employers with 20-49 employees (in California?) to offer eligible employees up to six weeks of job-protected unpaid baby-bonding leave during the first year after the child’s birth, adoption or foster care placement. The bill would have required small employers to maintain employee medical coverage during the leave. Under current California law, employers with five or more employees are required to provide up to four months of leave to women who become disabled due to pregnancy, childbirth or a related medical condition. Existing law (both the FMLA and CFRA) also provides eligible employees — male and female — with 12 weeks of baby-bonding leave if their employer has at least 50 employees. (Gov. Brown vetoed it on Sept. 30, 2016)