San Francisco Injury Lawyer Blog

Among the new laws passed in 2011 is a new California insurance law, SB 946, which aims to complement existing law that requires equal coverage of mental health conditions and medical conditions. The Mental Health Parity Law and a settlement agreement reached by insurance companies and the California Department of Managed Health Care provide for insurance coverage of mental health conditions, including the full spectrum of autism. Insurance companies must provide equal mental health coverage and maximum lifetime benefits at the same rates as medical coverage.

Existing regulations required that all treatment be provided by licensed professionals, such as psychologists, registered nurses, and social workers. However, this language excluded certified providers of “applied behavior analysis” (ABA,) a prevalent strategy meant to improve behavior and quality of life for families with autistic children. The distinction between a licensed profession and a certified one is made by how the profession is regulated. Licensed professions are regulated by the state while certified professions are regulated by non-governmental entities.

The new law has a great impact on families with autistic children attempting to obtain health insurance and make claims to pay for behavioral treatments. It requires insurance companies to cover mental health treatment such as applied behavior analysis as long as it is prescribed by a licensed professional. The mental health treatment itself may be carried out by professionals who are not regulated specifically by the State of California.

The California Association of Health Plans opposed the bill, stating an industry study that the bill would effectively raise insurance costs by $850 million. A similar study carried out by the California Health Review found that it would raise insurance costs by about $93 million and lower the costs of special education and social services, paid for by the taxpayer, by about $140 million.

Families affected by the bill should take some exceptions to coverage into consideration. Insurance plans provided by federal and state governments, such as ERISA, CalPERS, Medicare, and Medi-Cal, are excluded from the law’s requirements. Those plans have their own requirements regarding mental healthcare. Also, plans that are considered “self-funded” or paid for by an employer who did not purchase a fully funded plan from a third party are excepted from the bill’s regulations. It is difficult for insured employees to tell the difference and should call their employer’s human resources department to inquire.

Moreover, the bill is effective July 1, 2012, but it sunsets on July 1, 2014 only two years later. The federal healthcare plan is set to take effect at that time and SB 946 will have to be re-evaluated to comply with federal law. Therefore, families should look closely for deadlines and news updates to determine future pay outs for mental healthcare. In the meantime, Autism Speaks, a prominent autism advocacy organization, recommends that persons harmed by insurance companies violating this or other insurance laws contact an attorney to see if legal action is appropriate.

Besides the laws already mentioned, insurance companies doing business in California must adhere to the California Insurance Code. Insurance companies may not engage in tactics meant to delay payment or offer to pay out low amounts on claims in bad faith. Additionally, they must communicate promptly with the insured regarding their claims. The insurance company must tell you why they denied your claim.
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An annual California Employer Health Benefits Survey came out this week with bleak news for California insurance consumers. It polled 770 benefit managers at private companies in the state from July to October 2011. The bottom line of the survey was that fewer companies offered health insurance in 2011 and those that did charged more for it. Those of us who practice insurance law in California are naturally concerned about these newly released statistics and what further impact the numbers could have as the health insurance market feels pressure from the economic downturn.

In California, 63 percent of workers have employer-sponsored health insurance, down from 73 percent two years ago. And premiums for these health plans rose by an astonishing 153.5 percent since 2002, more than five times California’s inflation rate for the same period. About 25 percent of employers either reduced benefits or raised costs on employees in 2011. A large part of this is due to the economic downturn of the last few years coupled with steadily rising costs. And there is no end to this trend in 2012 as 36 percent of California employers stated they are either somewhat or very likely to increase the amount employees pay this year. This upward trend in costs has been present for several decades, but the dramatic upturn in the numbers in this most recent survey are still striking even to experienced San Francisco insurance lawyers.

The numbers are especially alarming considering consumers are getting fewer benefits for their money, as well. The insurance benefits decreased at the same time as co-pays, deductibles, and premiums rose dramatically in cost for the employee-consumers. And employers are paying more than average in California, as well. They contribute, on average, $5,000 per single employee and nearly $12,000 a year for family coverage.