An Update from the Silicon Valley Association of Health Underwriters

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Governor Brown Calls Extraordinary Session to Implement Federal Health Care Reform

Governor Edmund G. “Jerry” Brown, Jr. gave his eleventh State of the State address on January 24, 2013. The wide-ranging speech gave praise to the legislature, unions, business organizations and taxpayers who supported last year’s Prop. 30’s seven-year tax increases while calling for fiscal prudence to pay down debt and increase state reserves. The Governor also included a couple of biblical references and a walk through California history as part of this year’s address.

Both legislators and Capitol watchers listen closely to these speeches every year to attempt to parse out what the Administration’s priorities are for the coming year – and to try and figure out if their 2013 legislative agendas coincide or collide with the Administration.

In this address, the Governor touted large legacy issues with his calls for action on several issues, including education reform, the construction of two 30-mile long “peripheral water tunnels” to bring water to Southern California from the Delta.

The Governor also officially called for a special session on healthcare to further implement the federal Patient Protection and Affordable Care Act. He stated, “California was the first in the nation to pass laws to implement President Obama’s historic Affordable Care Act. Our health benefit exchange, called Covered California, will begin next year providing insurance to nearly one million Californians. Over the rest of this decade, California will steadily reduce the number of the uninsured.”

“Today I am calling for a special session to deal with those issues that must be decided quickly if California is to get the Affordable Care Act started by next January. The broader expansion of Medi-Cal that the Act calls for is incredibly complex and will take more time. Working out the right relationship with the counties will test our ingenuity and will not be achieved overnight. Given the costs involved, great prudence should guide every step of the way.”

There is already strong indication that the issue of stop loss may be one of the items to be considered in what is commonly termed an “extraordinary” session of the Legislature. CAHU’s legislative team will review legislation and report back to CAHU members on bills introduced in the special session, as well as the regular session on healthcare.

The Governor’s annual address took on a bit sterner tone when he chided legislators for enacting too many new and possibly unnecessary laws. Brown noted that “As Legislators, it is your duty and privilege to pass laws. But what we need to do for our future will require more than producing hundreds of new laws each year.”

The Governor went on to say, “We do this, not by commanding thou shalt or thou shalt not through a new law but by tapping into the persuasive power that can inspire and organize people. Lay the Ten Commandments next to the California Education code and you will see how far we have diverged in approach and in content from that which forms the basis of our legal system.”

As the session starts to swing into full action mode, it will be interesting to see how legislators react to the Governor’s implied warning not to send him unnecessary legislation and what the Governor will actually do if unwanted or less than thoughtful bills land on his desk.

Click here for a video and complete text of the 2013 State of State Address.

Click here for link to a proclamation by the Governor of the State of California on the extraordinary session.

Covered California Exchange Website Update

The new “Covered California” (new name of the California Health Benefit Exchange) website is still slated to go “live” soon.  CAHU has been in contact with Covered California and will keep members posted on the status of the new site.

The Covered California website has been designed for ease of use by all stakeholders, including licensed agents and employers. In fact, the new website will contain specific agent and employer content on the Small Employer Health Options Program (SHOP) section. A newsletter specifically about SHOP Exchange happenings is expected to launch sometime in the first quarter of 2013.

In addition, the new logo of Covered California has also been released and will be imbedded in all Covered California plans, products and information on a going forward basis. The current website of the Exchange (HBEX) will continue to be active, but will be solely concerned with the California Health Benefit Exchange Board of Directors actions.

Agents have also been advised that SHOP may be setting up a specific agent advisory group where agents from CAHU, NAIFA California and IIABCal can all participate in discussions affecting SHOP from the producer perspective.

Last of all, agents are been advised to review all materials and websites with an eye towards avoiding inadvertent violation of AB 1761 rules. AB 1761 was signed into law last year, took effect January 1 of this year, and prohibits any individual or website from attempting to hold their selves, plans or websites out as officially authorized as “Covered California” certified or approved. Word has come down that the Exchange plans a hard crackdown on violators of AB 1761 provisions. AB 1761 was supported by all three agent organizations as well as other consumer health advocates.

Please visit www.cahu.org frequently for news, information, and the link to the new Covered California site.

Preparing for Likely Battle

on Stop Loss in 2013

CAHU Needs Your Real Life Examples

2013 is just around the corner and the Legislature is already gearing up to revisit the issue of stop loss insurance. Last year, CAHU, along with a large business coalition and allied agent organizations NAIFA California and the Independent Insurance Agents and Brokers of California, was able to put the passage of SB 1431 (De León) on hold.

In order to prepare for the renewed debate on stop loss in 2013, CAHU needs your help. One of the most effective ways to defend against onerous legislation is to provide real-world examples of where stop loss plays a crucial role in helping small businesses maintain health insurance coverage for their employees. CAHU is asking for you to submit real stories of how a small business was able to provide employee care coverage through the combination of self insurance and stop loss coverage. The names of the company and agents will not be used, in order to protect privacy.

An example that CAHU used last year was the true story of a small business that has an employee who has a baby with Down Syndrome. “Off-the-shelf” insurance coverage wouldn’t address the special needs of the employee’s family, so the CAHU member set up a program where the company self-insured for health care, including expanded benefits for speech therapy and orthotics for the child. The self-insurance plan also included stop loss coverage as a way to protect against large catastrophic claims. More to the point, this customized health insurance package made the premiums affordable for both the employer and the employees.

This story resonated with legislators and made it possible to show members of the Assembly and the Senate that real people would be negatively affected if stop loss insurance as a financial management tool was taken out of the licensed agent toolbox.

That is why CAHU believes stop loss insurance is important to protect and preserve. If you have other stories like this or other situations where stop loss played a role in providing affordable coverage, please take time to send them to CAHU. You can email them to the attention of Juli Broyles at info@cahu.org. Please send any stories as soon as possible.

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