Thursday, April 10, 2014

California May Now Repeal Its 60-Day Waiting Period Mandate If CA Senate Bill 1034 Succeeds

Updated: On August 15th, California Repealed Its 60-Day Limit on Eligibility Waiting Periods and Now Conforms to PPACA's 90-Day Rule.  

Just in case you weren't fatigued by the never ending barrage of changes to President Obama's Health Law, California has proposed a significant change that will certainly make employers' heads spin (again).   Last year, California decided that the 90-day waiting period limit imposed by PPACA was too long and cut that period to 60 days via state law.  We reported on that change here.

Carriers (and therefore employers) have been scrambling to make sure that their waiting periods were either first of the month following 30 days or first of the month following one month to ensure they fall inside of 60 days.  Some carriers are allowing a waiting period of 60-days-on-the-dot, but who really wants to administer partial month premiums and contributions?  I've yet to come across that employer.

And now this, from Christine P. Roberts of Mullen & Henzell L.L.P at her E is For ERISA Site:
California Senate Bill 1034 sponsored by Senator Bill Monning (D-Carmel) would repeal language in the Health & Safety and Insurance Code that currently limits waiting periods under small and large group HMO contracts and health insurance policies to a maximum of 60 days. The new bill, if enacted, would prohibit insurers and HMOs from imposing any waiting or affiliation period under group coverage in the small and large-group markets. 
This would allow California employers to follow the Affordable Care Act’s maximum 90-day limit on eligibility waiting periods, recently confirmed in final regulations issued by the Departments of Labor, Treasury and Health and Human Services (the “Departments”). In the preamble to the final regulations, the Departments make clear that state insurance laws may impose more stringent waiting period rules than the federal standard. ...
SB 1034 is on the radar screen of insurance and HMO regulators in the state for several weeks and, to date, no opposition to the bill has been raised. The California Department of Insurance may or may not register a position on the bill and any opposition raised by the California Department of Managed Health Care generally would not appear until further along in the legislative process....
We will continue to track this Bill and report back here on any progress that is made.

April 9, 2014 Update: This bill passed a Senate committee 8-0 with only 1 vote abstaining.  This bill will likely pass and remove these limitations this year.

May 1, 2014 Update: It passed the Senate 35-0 and have moved to the Assembly.