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News & Press: CalAdvisor Newsletter

Legislative Update

Tuesday, November 17, 2015   (0 Comments)
Posted by: Shari McHugh
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The Governor signed AB 1515 by the Assembly Insurance Committee and sponsored by the Department of Insurance.  The bill, among other things, amends current law that requires licensees to put on their business cards, written price quotations for insurance products, and print advertisements, distributed in this state for insurance products, the word “insurance.”  The bill requires the font size of the word “insurance” to be the same size as the smallest telephone number or 12-point font, whichever is larger.  NAIFA-California asked for a delayed implementation date of July 1, 2016 so that our members had enough time to make any necessary changes to their materials.  Please make sure the necessary changes are made so that the DOI doesn’t take enforcement actions against NAIFA-California members.



AB 1163 by Assemblyman Rodriguez (D-Pomona) was co-sponsored by NAIFA-California, CAHU and IIABCal and provides for reasonable notice of major changes made by a carrier to an agent agreement.  The bill will require health insurers and health maintenance organizations (HMOs) to provide their appointed agents with 45 days advance notice of any material changes in their agency agreement.  AB 1163 was introduced in response to recent actions by health insurance carriers that made substantial and material changes to their agreement with licensed health insurance agents with only 48 hours of notice before the changes took effect.  AB 1163 provides for a fair and reasonable notice to licensed agents when their contract is substantially changed.  The bill will go into effect on January 1, 2016.


AB 1232 Assemblywoman Garcia (D-Bell Gardens) was sponsored by the Department of Insurance in an attempt to expedite the hearing process for insurance agent applicants.  NAIFA-California went neutral on the bill after the DOI agreed to amend the proposal to only apply to new insurance agent applicants and allow the applicants to choose either an administrative law judge at the Office of Administrative Hearings or an administrative law judge appointed by the Insurance Commissioner to conduct the hearing.  Despite the compromise that NAIFA-California was able to negotiate, the Office of Administrative Hearings (OAH) expressed opposition to the idea of allowing the DOI to conduct hearings regarding its own licensees.  The Governor agreed with OAH and vetoed the bill. 


AB 332 Assemblyman Calderon (D-Montebello) would have required the Insurance Commissioner to convene a task force composed of specified stakeholder and representatives of government agencies to examine the components necessary to design a statewide long-term care insurance program, as specified. The bill would require the task force to recommend options for establishing this program and to comment on their respective degrees of feasibility in a report submitted to the commissioner, the Governor, and the Legislature by January 1, 2017. NAIFA-California and ACLHIC were able to secure an amendment to have a long-term care insurance industry representative on the task force. The Governor vetoed the bill stating there are already various federal government and private organizations that have undertaken essentially the same task.


AB 248 by Assemblyman Roger Hernandez (D-West Covina) prohibits insurers from selling and large employers with 50 or more employees from purchasing health coverage that does not meet at least the 60 percent minimum value cost of medical services.  NAIFA-California, IIABCal and CAHU continued to oppose to the bill despite amendments that removed the provision that caused us the most concern.  The Governor signed the bill and it will go into effect on January 1, 2016.   


Healthcare Funding Special Session

After signing the budget in June, the Governor called a Special Session for the Legislature to consider a sustainable funding source for a number of healthcare services.  Specifically, the Governor wants to find a way to tax managed care organizations to maintain the $1.1 billion dollars that California is currently receiving to help fund Medi-Cal.  In addition, he would like the Legislature to work on increasing Medi-Cal reimbursement rates for providers and to find a way to help fund In-Home Support Services and developmental disability services.  The expectation is that there will be hearings and discussion on the issues when the Legislature returns from their fall recess on January 4. 


PACE Act -- California

President Barack Obama recently signed the PACE Act, which allows each state to decide whether or not to set it upper size limit for small groups at 50 or 100 employees.  Despite this action at the federal level, California’s Legislature would need to pass, and the Governor would need to sign, legislation to lower the limit from fewer than 100 employees to fewer than 50 employees.  At this time, it appears unlikely that the Legislature will take such action. Therefore, California’s small group definition of 100 or fewer employees will go into effect on January 1, 2016.  We will keep you posted if there are further developments.




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