Legislature Returns to Work After Spring Recess

As the weeklong Legislative Spring Recess comes to an end, we prepare for the return to session and the many deadlines that lie ahead. On April 22, the Legislature reconvenes their work facing a deadline on April 26 for policy committees to hear bills that have a fiscal impact to the state and pass them to their respective fiscal committee, Senate bills to Senate Appropriations Committee and Assembly bills to Assembly Appropriations Committee.

Moving into May, each week there are major legislative deadlines. May 3 is the last day for policy committees to meet and send to the floor any remaining nonfiscal bills introduced in their house. May 10 is the last day for policy committees to meet prior to June 3, to allow legislators to shift focus to fiscal and budgetary processes. The week of May 28-May 31 is reserved for floor session only; no committees may meet for any purpose except for Rules Committees, bills referred to a committee as a result of a substantial amendment, and Conference Committees to negotiate and align details on the state budget. May 31 is the last day for each house to pass bills introduced in that house, otherwise known as the “house of origin” deadline.

There are two legislative deadlines to be aware of in June. On June 3, committee meetings may resume and will begin hearing bills sent over from the other house. Then, on June 15, the Legislature must pass the Budget Bill by midnight, which is required by the California Constitution.

We’ll be sure to keep you updated through it all.

Governor Gavin Newsom Announces Los Angeles County will Join State’s Prescription Drug Single-Purchaser System

On Wednesday, April 17, Governor Gavin Newsom joined Los Angeles County leaders to announce that the county will partner with the state to use their combined market power to take on drug companies and lower the cost of prescription drugs. Los Angeles County is among the largest public purchasers of prescription drugs in California. 

After taking office, Governor Newsom took steps in making health care more affordable and moving the state closer toward the goal of health care for all Californians. His proposals included an executive order to create the nation’s biggest single-purchaser system for drugs to allow Californians and private employers to join together in negotiating prescription drug prices. 

Los Angeles County is now the state's largest local partner since the issuance of the executive order. At the event, the Governor encouraged other local governments to join with the state to leverage a collective purchasing power. 

“California is leading the nation in holding drug companies accountable and fighting prescription drug prices,” said Governor Newsom in announcing the partnership with Los Angeles County. “We will use our market power and our moral power to demand fairer prices for prescription drugs. And we will continue to move closer to ensuring health care for every Californian.” 

The Governor was also joined at the event by Los Angeles County Supervisors Janice Hahn and Hilda Solis and Director of the Los Angeles County Department of Health Services Dr. Christina Ghaly. 

This announcement comes on the heels of a statement released last week by the Legislative Analyst’s Office which concluded that the state Medi-Cal component of the executive order could potentially save the state hundreds of millions of dollars annually by increasing Medi-Cal’s bargaining power from 2 million to 13 million.

Commissioner Lara Reappoints Board Members for COIN and WCIRB

Earlier this month, Insurance Commissioner Ricardo Lara announced two reappointments to the California Organized Investment Network (COIN) Advisory Board and one reappointment to the Workers’ Compensation Insurance Rating Bureau (WCIRB) Governing Committee. 

Established in 1996, the California Organized Investment Network (COIN) guides insurers on making safe and sound investments that yield environmental benefits throughout California and social and economic benefits within the state's underserved communities. The COIN Advisory Board—consisting of the Insurance Commissioner and several leaders in insurance, economic development, impact investments, and consumer advocacy—provides focus and guidance to the Commissioner and COIN to meet its mission. 

The Workers’ Compensation Insurance Rating Bureau (WCIRB) is a private organization licensed by the Department of Insurance for the purpose of collecting, analyzing and compiling rating data, funding comes from assessments of the insurer members. All workers' compensation insurance companies in California are required by law to be members of the bureau. The WCIRB Governing Committee sets policy, oversees management of the affairs of the WCIRB, and oversees all issues involving pure premium rates, classifications, rating plans, rating systems, manual rules and policy, and endorsement forms. 

COIN Reappointments

Douglas Bystry is the President and CEO of the Clearinghouse CDFI, a for-profit community development financial institution. Mr. Bystry is considered an expert in affordable housing, community development, and New Markets Tax Credit lending. He was first appointed to the COIN Advisory Board in March 2012. 

Nicholas Roxborough is the Co-Managing Partner of Los Angeles based law firm of Roxborough, Pomerance, Nye & Adreani, LLP. Over three decades, Mr. Roxborough has obtained numerous trial and appellate decisions concerning the insurance industry. He was first appointed to the COIN Advisory Board in March 2013. 

WCIRB Reappointment

Mitch Steiger is the Legislative Advocate for the California Labor Federation, representing trade union interests to statewide officials and state legislators. He was first appointed to the WCIRB Governing Committee in April 2011.

Unveiling a package of health care related bills, Care4All California aims at lowering the cost of care and insuring more people. This package includes legislation expanding Medi-Cal eligibility to everyone regardless of status, imposing an individual mandate that would penalize people for not carrying insurance, addressing drug pricing, and containing emergency room costs. 

The Sacramento Bee published a brief review of each bill in this package. 

Increasing Coverage

SB 29 (Durazo) & AB 4 (Bonta, Chiu, Santiago) These bills would extend Medi-Cal eligibility to all income-eligible adults regardless of their immigration status. The state’s Legislative Analyst’s Office estimated last year that doing so would cost almost $3 billion. It would be a significant addition to the $20.7 billion in general fund money the state is expected to spend on Medi-Cal in the 2018-2019 fiscal year. Governor Gavin Newsom has instead advocated for expanding eligibility only to undocumented people age 19 through 25 for an estimated $250 million. Undocumented children up to age 18 are already eligible. 

AB 526 (Petrie-Norris) This bill would make it easier for eligible children and pregnant women in the federal Women, Infants, and Children program to enroll in Medi-Cal. 

SB 260 (Hurtado) This bill would require health plans to send notices to people who lose their coverage for any reason and to inform them about Medi-Cal and Covered California. Plans must also provide a list of people who lost coverage to Covered California so the exchange can contact those who lost coverage directly. Hurtado says the bill will reduce coverage gaps when people’s income or other life circumstances change. 

AB 1309 (Bauer-Kahan) This bill would extend the application period for Covered California by two weeks. Starting in 2018, most federally administered exchanges created under the Affordable Care Act shifted to a shortened enrollment period ending December 15. In California, consumers have until January 15. This bill extends the deadline to January 31. 

AB 1063 (Petrie-Norris) Federal waivers allow states to find new ways to improve health care in exchanges created under the Affordable Care Act. Last year, the Trump administration began allowing state exchanges to apply for waivers without explicit state legislative authority. Under the less restrictive rules, health advocates are worried states will try to offer coverage that undermines the Affordable Care Act. Health Access and the Western Center on Law and Poverty are sponsoring the bill, which would prohibit Covered California from applying for a waiver without approval from the Legislature and the Governor. 

Making Insurance Cheaper

AB 174 (Wood) & SB 65 (Pan) These bills both would require Covered California to provide more financial help to low-income residents buying health insurance. Assembly Bill 174 would establish a tax credit beginning in 2020 for individuals who currently earn between 400 and 600 percent of the federal poverty level, or more than $48,000 a year for an individual and more than $100,000 a year for a family of four. These families are not currently eligible for Affordable Care Act tax credits. The Senate bill would require Covered California to implement premium contribution limits, while also reducing copayments and deductibles for people with incomes between 200 and 400 percent of the federal poverty level. 

SB 175 (Pan) & AB 414 (Bonta) Both of these bills would establish an individual insurance mandate, including a state-level penalty for people who don’t carry health insurance. It would replace the federal fine that disappeared beginning this year. Covered California would determine the penalty and who would be exempt. Governor Gavin Newsom wants to use the revenue from the fine to fund subsidies in Covered California. He anticipates it will generate $500 million a year. 

AB 715 (Wood) Currently, seniors who earn more than about $15,000 a year and are enrolled in the Medi-Cal Aged and Disabled program must pay a monthly out-of-pocket fee for medical services, even though most adults who earn up to roughly $17,000 a year have free Medi-Cal. This bill would reduce the number of seniors who have to pay the fee by raising the maximum income level for the Medi-Cal Aged and Disabled program to $17,000. 

AB 683 (Carrillo) Seniors in the Medi-Cal Aged and Disabled program are currently restricted to $2,000 in a bank account, or $3,000 for couples, because of something called the “assets test.” These types of restrictions were eliminated for most other Medi-Cal enrollees under the Affordable Care Act. Senior advocates say the rule requires seniors to deplete their assets in order to be eligible for health coverage, and it disproportionately affects seniors of color. The bill would raise the limit to $10,000 for an individual, exclude certain items from the assets test, and eliminate the test for Medicare Savings Programs. 

AB 1088 (Wood) This bill affects seniors who are enrolled in both Medicare and Medi-Cal. These seniors sometimes lose their Medi-Cal coverage when the state begins paying their Medicare Part B premiums because those payments bump them above the Medi-Cal income eligibility threshold. Wood’s bill would make it so the Medicare payment is not counted as income. 

Combating Health Disparities

AB 318 (Chu) This bill aims to improve translations in the Medi-Cal program. It would require the Department of Health Care Services and Medi-Cal managed care plans to review translated materials for Medi-Cal beneficiaries for accuracy, cultural appropriateness, and readability. 

SB 464 (Mitchell) The state’s health department is currently required to maintain a maternal and child health program, and the Office of Health Equity must track ethnic and racial health statistics on infant and maternal mortality, among other issues. This bill would require hospitals, birth centers and clinics that provide perinatal care to implement an implicit bias program for all providers, in an effort to reduce racial disparities. The providers would have to complete training at the outset, and a refresher course every two years. The bill would also change the way deaths of pregnant women are recorded on certificates. 

Transparency

AB 537 (Wood) This bill would require California’s Department of Health Care Services to create a rating system for Medi-Cal managed care plans. Advocates say the state should be holding plans accountable for improving quality and reducing health disparities. 

AB 929 (Rivas) This bill would require the Covered California board to make information on health plans’ cost reduction efforts, quality improvements and disparity reductions public. The board would have to post the data on its website annually in a way that “demonstrates the compliance and performance of a health plan, but protects the personal information of an enrollee.” 

AB 731 (Kalra) Under current law, health plans offering individual or small group coverage must file information about total earned premiums and incurred claims with the California Department of Insurance or Department of Managed Health Care at least 120 days before implementing a premium rate change. This bill would require plans offering large group coverage to do the same and would impose additional disclosure requirements. 

SB 343 (Pan) This bill would remove an exclusion in state law that allows certain health systems, including Kaiser Permanente, to keep some insurance costs and hospital financial information private. Under the bill, Kaiser would be held to the same data disclosure requirements as its competitors. 

AB 1611 (Chiu) This bill would limit what hospitals can charge a patient, or the patient’s plan, for emergency care in cases where the hospital does not have a contract with the patient’s health plan. It’s an effort to stop what advocates call “surprise billing”, or hospitals landing patients with large and unexpected costs after providing care. 

Drug Access

AB 1246 (Limón) This bill would require most large group health plans to cover medically necessary prescription drugs. 

AB 824 (Wood) This bill would outlaw the practice of a brand name drug manufacturers entering into contracts with generic drug manufacturers in order to delay marketing a generic version of a drug in exchange for payment.

CalChamber Releases Their List of Legislative Job Killers

The California Chamber of Commerce released its annual Job Killer list, which includes 24 bills that would harm California’s economic growth and job creation should they become law. This expands the two job killer bills that CalChamber identified back in March, AB 51 (Gonzalez) and SB 1 (Atkins). They are included in the list below. 

The 2019 list of job killer bills, as summarized by the CalChamber, is as follows: 

AB 36 (Bloom) Statewide Rolling Rent Control — Defies the will of the voters and worsens California's housing shortage by modifying the Costa-Hawkins Rental Housing Act to allow cities to enact or expand rent control to residential properties constructed within 10 years of the date upon which the owner seeks to establish the initial or subsequent rental rate, which will discourage housing production, quality of housing, and impact low-income individuals and families. 

AB 40 (Ting) Vehicle Ban — Discourages investment and eliminates jobs in California by essentially imposing a ban on all non-zero emission vehicles by requiring the California Air Resources Board develop a strategy to ensure that all passenger and light-duty vehicle sales are zero emission by 2040. 

AB 51 (Gonzalez) Ban on Arbitration Agreements — Significantly expands employment litigation and increases costs for employers and employees by banning arbitration agreements made as a condition of employment, which is likely preempted under the Federal Arbitration Act and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee. Former Governor Edmund G. Brown Jr. vetoed a similar measure last year and stated it “plainly violates federal law.” 

AB 138 (Bloom) Targeted Tax on Sweetened Beverages — Unfairly imposes a targeted excise tax on distributors of sweetened caloric beverages to fund health-related programs for all which will force distributors to reduce costs through higher prices to consumers or limit their workforce. 

AB 288 (Cunningham) Significant Expansion of Liability and Litigation for Consumer Data — Creates an onerous private right of action with a right to excessive punitive damages for purely economic losses at a low evidentiary standard, along with attorney’s fees, for a new consumer right to delete data that conflicts with the consumer right to delete recently provided by the California Consumer Privacy Act. 

AB 495 (Muratsuchi) Cosmetic Product Ban — Bypasses a legislatively-mandated analytical process to judge the safety of consumer products and seeks to prohibit safe cosmetic products based upon the mere presence of a chemical in the product, no matter the level, that will lead to potential regrettable substitutions and job losses in the cosmetic industry. 

AB 628 (Bonta) Uncapped New Leave of Absence for Employees and Their Family Members — Significantly expands the definition of sexual harassment under the Labor Code, which is different than the definition in the Government Code, leading to inconsistent implementation of anti-harassment policies, confusion, and litigation. Also, provides an unprecedented, uncapped leave of absence for victims of sexual harassment and their “family members” which is broadly defined, that will add another layer of burdens on employers and their ability to manage their workforce. 

AB 673 (Carrillo) Unfair Expansion of Penalties Against an Employer for Alleged Wage Violation — Unfairly exposes an employer to being penalized twice for the same violation, by allowing both an employee and the Labor Commissioner to recover the same civil penalties through civil litigation. 

AB 725 (Wicks) Inclusionary Housing Requirement — Will exacerbate California’s housing crisis by imposing a statewide, indirect inclusionary housing requirement that prohibits local jurisdictions from allocating more than 20% of their share of regional housing need for above-moderate-income housing in areas zoned for single-family development. 

AB 755 (Holden) Targeted Tax on Purchase of Tires — Imposes a $1.50 targeted tax on the purchase of new tires, that will unfairly raise prices on California residents, including employers, in order to fund the mitigation of zinc in stormwater for all. 

AB 790 (Levine) Increased Cost on Employers for Use of Personal Services Contracts — Discourages and reduces the use of “personal services contracts” as defined, by requiring the hiring entity to pay a minimum contractual compensation rate at 85% of the area median income, which will presumably include wages from different industries and occupations that are not comparable to personal services, and reduce jobs for individuals who perform the work under personal services contracts. 

AB 857 (Chiu) Significant Risk to Taxpayer Dollars and Community Investment — Jeopardizes taxpayer dollars, community banks, and funding for small businesses that create jobs in local communities, by allowing the creation of local public banks which will impose significant costs and risks to taxpayer revenue for operations and capital, as well as unfairly compete with local community banks. 

AB 882 (McCarty) Limitation on Ability to Maintain a Safe Workplace — Significantly undermines an employer’s ability to maintain a safe, drug-free workplace, by prohibiting an employer from discharging an employee who has tested positive for a drug that is being used for medical purposes, which will expose employers to costly litigation. 

AB 1035 (Mayes) Expansion of Civil Litigation for Data Breaches — Unfairly requires businesses to notify consumers of a data breach within 72 hours, which will place an unrealistic compliance burden on businesses before they can reasonably assess the extent of the breach, thereby unnecessarily causing harm to consumers and increasing businesses’ class action exposure. 

AB 1286 (Muratsuchi) Unfair Contractual Mandates on Use of Motorized Scooters — Significantly increases costs and litigation on shared mobility providers by prohibiting arbitration agreements as a part of the consumer contract, which is preempted under the Federal Arbitration Act and will create uncertainty and delay for the resolution of disputes. 

AB 1332 (Bonta) Contract Prohibition for Businesses that Provide Services to Federal Government — Prohibits California public entities from contracting with, or investing in, any business that provides data-related services to an undefined group of federal agencies. Will create litigation and uncertainty for businesses that continue to work with California public entities, as the bill provides no clear guidance on how to comply with terms, and also in limited circumstances, compels public entities to breach signed contracts. 

AB 1468 (McCarty) Targeted Tax on Opioids — Unfairly imposes an excise tax on opioid distributors in California, which will increase their costs and force them to adopt measures that include reducing workforce and increasing drug prices for ill patients who need these medications the most, in order to fund drug prevention and rehabilitation programs that will benefit all of California.  

SB 1 (Atkins) Unprecedented Delegation of Legislative Authority and Increased Litigation — Creates significant uncertainty and litigation risks to regulated entities by giving certain state agencies unfettered authority to adopt rules and regulations without any of the Administrative Procedure Act safeguards when the agency, in its discretion, determines that the federal rules and regulations in effect on January 19, 2017 are more “stringent” than existing federal law. It also increases the potential for costly litigation by creating private rights of action under California law or when a state agency takes the foregoing discretionary action. 

SB 44 (Skinner) Targeted Mandate that Will Increase Transportation Costs — Severely impacts transportation costs by directing CARB to develop a strategy to reduce all motor vehicle emissions by 40% by 2030 and 80% by 2050 by disproportionally targeting diesel medium- and heavy-duty trucks. Threatens jobs by requiring an immediate strategy for the reduction of diesel vehicles without sufficient alternate technology. 

SB 135 (Jackson) Substantial Expansion of California Family Rights Act — Significantly harms small employers in California with as few as 5 employees by requiring these employers to provide 12 weeks of a protected leave of absence each year, in addition to existing leaves of absences already required, as well as potentially requiring larger employers to provide 10 months of protected leave, with the exposure to costly litigation for any alleged violation. 

SB 246 (Wieckowski) Targeted Tax on Oil and Gas Operators — Unfairly targets one industry by imposing a 10% oil and gas severance tax onto an oil and gas operator, adding another layer of taxes onto this industry that will significantly increase the costs of doing business, thereby increasing prices paid by consumers for goods and services in this expensive state as well. 

SB 468 (Jackson) $20 Billion Tax Increase — Repeals several of California’s most popular and most important tax exemptions and expenditures, which would raise taxes by $20 billion. 

SB 561 (Jackson) Significant Expansion of Liability and Litigation Under California Consumer Privacy Act (CCPA) of 2018 — Creates an onerous and costly private right of action that will primarily benefit trial lawyers to sue for any violations of the CCPA and removes businesses’ 30-day right to cure an alleged violation of the CCPA as well as businesses’ ability to seek guidance from the Attorney General on how to comply with this confusing and complex law.