New California Insurance Laws

AB 72

This new law provides that if an insured receives services in an in-network facility from an out-of-network health professional, the insured is only required to pay the out-of-network provider the same cost sharing that would be required if the services were provided by an in-network provider.

There is an exception if the insured provides written consent that meets certain criteria. This law also creates an independent dispute resolution process for out-of-network providers. This law requires insurers to base reimbursement for covered services on what Medicare would pay for the same or similar services. This law addresses the problem of out-of-network anesthesiologists, radiologists and pathologists working at in-network hospitals and will be effective July 1, 2017.

AB 1244, AB 2503 and SB 1160

This package of worker’s compensation system reforms:

  • Prohibits prospective utilization review (UR) within the first 30 days of treatment for treatment provided through a medical provider network (MPN).
  • Makes exceptions for surgery, medications not covered by the workers’ compensation drug formulary, psychological treatment, most durable medical equipment and home health services.
  • Allows for retrospective UR to ensure a doctor is complying with the Medical Treatment Utilization Schedule (MTUS) and if a pattern develops of a doctor failing to do so, an employer can remove the doctor from their MPN.
  • Requires any UR organization to obtain accreditation from an accrediting entity specified by the Division of Workers’ Compensation (DWC).
  • Requires the Administrative Director (AD) to develop a mandatory electronic system for sharing documents necessary to conduct UR.
  • Provides that the MTUS may be updated with evidence-based medicine standards by an expedited process.
  • Requires a lien filer to specify in the lien filing the basis upon which the lien is authorized.
  • Prohibits the assignment of liens unless a person has ceased doing business in the capacity held at the time the expenses were incurred and has assigned all right, title and interest in the remaining accounts receivable to the assignee. The assignment of a lien in violation of this provision is invalid.
  • Requires the DWC AD to bar medical service providers from participating in any capacity in the workers’ compensation system if the provider has been convicted of fraud or abuse of the Medi-Cal, Medicare or workers’ compensation system or has been convicted of a felony.
  • Requires a treating physician to file requests for authorization of treatment with the appropriate entity.

As a result of these reforms, the Workers’ Compensation Insurance Rating Bureau has recommended a 4.3 percent decrease in premiums for 2017.

AB 2337

This new law requires employers with 25 or more employees to provide written notice to employees of their rights to take protected time off for domestic violence, sexual assault or stalking upon hire and at any time upon request by the employee. The Labor Commissioner must develop a form for the notices by July 2017.

AB 2883

This new law requires that all workers’ compensation policies cover certain officers and directors and working members of partnerships and limited liability companies that may have been previously excluded. Most insurance legislation applies to policies issued, amended or renewed on or after a specified date. This law does not contain that language, which means it applies to in-force policies as of January 1, 2017.

SB 1167

This new law orders the California Division of Occupational Safety and Health Administration (Cal/OSHA) to propose to the state Occupational Safety and Health Standards Board by January 1, 2019, a heat illness and injury prevention standard applicable to workers working in indoor places of employment.


John Garner

About John Garner

John Garner has over thirty five years of experience in employee benefits. He specializes in compliance, health care reform, the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), and the Employee Retirement Income Security Act (ERISA). He helps clients with life, health, and disability benefits, cost containment, flexible benefits, and claim consulting.

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