New Employment Laws for 2012: Insurance Non-Discrimination Act

Senator Ted Lieu introduced California Senate Bill 757 (SB 757) on April 23, 2011, to close a loophole used by out-of-state health insurers to avoid paying benefits to domestic partners.

“Under existing California law, insurers are required to provide the same coverage to domestic partners that they provide to a spouse,” Lieu said while testifying to the Senate Judiciary Committee in May. “Unfortunately, unscrupulous out-of-state insurers use a loop-hole to avoid providing these benefits. My bill would slam this loophole shut by requiring any health insurance policy issued to someone in California to be subject to the state’s requirements for equal coverage.”

Lieu said multi-state companies that do business in California often contract with out-of-state insurance companies to provide coverage for their employees, and some of these out-of-state insurance companies refuse to provide equal coverage to domestic partners. The new employment law clarifies that any insurance policy sold or issued in California must comply with California’s non-discrimination requirements, even if the insurance company is out-of-state.

California-based insurance companies would hopefully be at less of a competitive disadvantage in the marketplace after SB 757 as well, with price savings no longer being available to out-of-state companies that sell discriminatory policies. Have you experienced any discrimination in health coverage because your employer used an out-of-state insurance company? What effect do you expect this to have on the insurance companies based here in the Golden State?

Law Offices of Kesluk, Silverstein & Jacob – Los Angeles employment lawyers