What you need to know about California’s Small Employer Health Coverage Insurance Urgency Bill

Guest Post By Insurance Expert Craig Gussin

RB BudgetCalifornia Governor Jerry Brown has signed into law SB 1446, known as the “grandmothering” bill and “transitional relief.” It will go into effect immediately as an “urgency statute.”

SB 1446 will allow a small employer health care plan that was in effect on December 31,2013 and that is still in effect as of the date this bill was signed (July 7, 2014), and that does not qualify as a grandfathered health plan under the ACA, to be renewed until Januaray 1, 2015, and to continue to be in force until December 31, 2015, even if they don’t meet certain requirement under the Affordable Care Act.

The bill also states that these plans must be amended to be in compliance with the ACA guidelines as of January 1, 2016, “in order to remain in force on and after that date.”

This will help some small California employers who opted to early renew their plans in December 2013. The small employer group policies effected by SB 1446 must still include many ACA and state-based mandated benefites such as preventative healthcare coverage without co-pays or deductibles, no lifetime caps on benefits, maternity care, coverage for autism and the elimination of gender discrimination in setting premiums.

It is important to keep in mind that this bill is not a mandate and employers are not required to keep these plans in place. This bill is meant to be a “transitional measure” to allow small employers more time to comply with the rules set down by the ACA. Also of note, the bill does not address rates, so premiums for these plans may increase.

Blue Shield of California, Health Net, and Kaiser Permanente have released communications pertaining to the new law:

I anticipate receiving additional guidance from the other insurance companies soon and will share that information with you as I receive it.

~Craig Gussin,

Auerbach & Gussin Insurance and Financial Services, Inc.

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