Today, the Senate Health Committee heard AB 248 (R. Hernández) and passed it out on a 6-1 vote, with Senator Nielsen voting no and Senator Nguyen abstaining. Sponsored by Health Access, AB 248 would close a loophole created by federal guidance that allows insurers and health plans to sell subminimum coverage to large employers.
Specifically, AB248 protects California workers by holding health insurance sold to large employers to a minimum standard in terms of value. Federal and state law already hold insurance sold to small employers and individuals to a basic standard (60% actuarial value), but insurers are free to sell large employers “junk” plans. When large employers offer such plans employees are stuck between a rock and hard place: with unmanageable costs for benefits that are not covered or thousands of dollars in out-of-pocket costs (see Health Access’s fact sheet for details).
Here’s the rub: if an employee accepts an employer’s coverage, even if it is subminimum coverage, the employee is automatically ineligible for premium subsidies through Covered California—and the employer gets off the hook on the employer responsibility penalty.
Speaking in opposition to the bill in in today’s robust committee discussion were California Association of Health Underwriters and the California Association of Small Employer Health Plans. Both groups opposed the bill, arguing that it would make health care premiums even more expensive for large employers if there was a requirement for employer-plans to hit the 60% minimum value threshold before other products can be added.
Health Access and consumer advocates argue that subminimum plans don’t reduce health costs, but simply shift those costs onto workers. They pointed to the deleterious consequences of current loophole for consumers: Consumers may not know or even be told the cost implications of whatever offer of coverage they are accepting–much less what it’s actuarial value is (how many of us can explain what that is?), which leaves them vulnerable to medical debt or bankruptcy from a single visit to the emergency room.
Other bills were also considered: AB 635 (Atkins), a bill that would provide for interpretive services in Medi-Cal was also heard in committee today and passed out successfully. AB 1114 (Bonilla) which clarifies that Medi-Cal and Covered California renewal forms and notices be translated into the thirteen Medi-Cal threshold languages, was on consent and will be moving to Appropriations along with AB 248 (Hernández) and AB 635 (Atkins).