Health plans

California may require health plans to cover dependent parents of enrollees

Pending final approval from Governor Gavin Newsom, California is in a position to require state-regulated private health plans to provide health insurance coverage to eligible dependent adults.

AB 570, or the “Parent Healthcare Act”, drafted by Asm. Miguel Santiago and sponsored by the California Department of Insurance (CDI), will require health plans to provide coverage to the parent or step-parent of a beneficiary who meets the federal legal definition of a “Eligible parent”. In other words, a parent must rely on their children for 50% or more of their financial support to be eligible. There is no age requirement.

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The bill will apply to any plan issued, amended or renewed after January 1, 2023. It is intended to supplement the Affordable Care Act (ACA) requirement for plans providing coverage for dependents up to the age of 26. Santiago said adding parents and in-laws as covered dependents will save California families thousands of dollars in medical bills.

The bill only applies to individual market health plans and not to employer sponsored plans. It does not apply to Medicare supplemental insurance, CHAMPUS supplemental insurance, TRICARE supplemental insurance, nor to hospitalization, accident only or specified illness insurance policies that reimburse hospital, medical or surgical benefits.

During the bill’s hearing before the Senate Health Committee in June, CDI Senior Deputy Executive Commissioner Michael Martinez explained that while working families can purchase separate policies for their parents, the law force requires them to pay separate fees and deductibles. one each for the family and the parent.

“AB 570 would change that by allowing the family, including the dependent parent, to be on one policy, thus combining their out-of-pocket expenses along with their deductible to save them money. “

The legislation also requires California Health Benefit Exchange health plans to provide information about the Health Insurance Advocacy and Counseling Program (HICAP) to applicants who wish to add a Medicare-eligible or registered parent to their plan. . They are required to explain that HICAP provides free health insurance advice to senior Californians.

Since individuals are no longer eligible for California coverage once they are eligible for Medicare – and therefore ineligible to enroll in their child’s plan as a dependent – this provision has been added to ensure that beneficiaries are aware of the coverage options of their dependent parents.

As California Insurance Commissioner Ricardo Lara said in a statement earlier this year, the bill is a response to the growing number of seniors without health coverage, which has dramatically increased due to the pandemic.

“Health insurance for young adults caring for dependent relatives can be extremely expensive if they get sick or lose their health coverage. The Parent Healthcare Act will save many California families money, especially during the current COVID-19 pandemic, when so many have lost their jobs and access to healthcare is even greater crucial. “

Governor Gavin Newsom has not taken a position on AB 570. He has until October 10 to sign the bills passed by this session.