CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 414

Introduced by Assembly Member Bonta

February 07, 2019

An act to add Title 24 (commencing with Section 100700) to the Government Code, and to add Part 32 (commencing with Section 61000) to Division 2 of the Revenue and Taxation Code, relating to healthcare coverage.


LEGISLATIVE COUNSEL'S DIGEST


AB 414, as introduced, Bonta. Healthcare coverage: minimum essential coverage.
Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services and under which healthcare services are provided to qualified, low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law provides for the regulation of health care service plans by the Department of Managed Health Care and health insurers by the Department of Insurance. Existing law establishes the California Health Benefit Exchange (Exchange), also known as Covered California, for the purpose of facilitating the purchase of qualified health plans by qualified individuals and qualified small employers.
Existing federal law, the Patient Protection and Affordable Care Act (PPACA), enacts various healthcare coverage market reforms as of January 1, 2014. PPACA generally requires individuals, and any dependents of the individual, to maintain minimum essential coverage, as defined, and, if an individual fails to maintain minimum essential coverage, PPACA imposes on the individual taxpayer a penalty. This provision is referred to as the individual mandate.
This bill would require a California resident to ensure that the resident and the resident’s dependents are covered under minimum essential coverage for each month beginning after 2019. The bill would impose a penalty for the failure to maintain minimum essential coverage. The bill would require the Exchange to determine the penalty, if any, for a resident and would require the Franchise Tax Board to collect the penalty. The bill would require the Exchange to determine whether to grant a certification that a resident is exempt from the requirement to maintain minimum essential coverage, the penalty, or both, and would require the Exchange to notify the resident and the Franchise Tax Board of its determination.
The bill would also establish the Health Care Coverage Penalty Fund, into which moneys collected from the above-described penalty would be deposited. Subject to an appropriation by the Legislature, the bill would require that moneys in the fund be used to improve the affordability of healthcare coverage for Californians.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Title 24 (commencing with Section 100700) is added to the Government Code, to read:

TITLE 24. California Healthcare Coverage Shared Responsibility Act

100700.
 (a) A California resident shall, for each month beginning after 2019, ensure that the resident and the dependents of the resident are covered under minimum essential coverage for that month.
(b) A penalty shall be imposed for failure to meet the requirement described in subdivision (a).
(c) It is the intent of the Legislature to follow a methodology similar to that outlined in Section 5000A of Title 26 of the United States Code, as in effect on December 15, 2017, for purposes of determining exemptions to the requirement described in subdivision (a) and the calculation and collection of the penalty described in subdivision (b).
(d) The Exchange shall determine the penalty, if any, for a resident, and the Franchise Tax Board shall collect the penalty.

100702.
 For the purposes of this title, the following definitions shall apply:
(a) “Exchange” means the California Health Benefit Exchange, also known as Covered California, established pursuant to Title 22 (commencing with Section 100500).
(b) “Minimum essential coverage” has the same meaning as that term is defined in Section 5000A(f) of Title 26 of the United States Code.

100704.
 (a) The Exchange shall determine whether or not to grant a certification that a resident is entitled to an exemption from the requirement to maintain minimum essential coverage pursuant to subdivision (a) of Section 100700, the penalty imposed pursuant to subdivision (b) of Section 100700, or both, by reason of religious conscience or hardship.
(b) The Exchange shall notify the resident and the Franchise Tax board of a certification granted pursuant to subdivision (a) in a time and manner as the Exchange, in consultation with the Franchise Tax Board, prescribes.

100706.
 (a) The Health Care Coverage Penalty Fund is hereby created in the State Treasury.
(b) Moneys collected from the penalty assessed pursuant to Part 32 (commencing with Section 61000) of Division 2 of the Revenue and Taxation Code shall be deposited into the fund.
(c) Subject to an appropriation by the Legislature, moneys in the fund shall be used to improve the affordability of healthcare coverage for Californians.

SEC. 2.

 Part 32 (commencing with Section 61000) is added to Division 2 of the Revenue and Taxation Code, to read:

PART 32. Minimum Essential Coverage Penalty Collection

61000.
 (a) (1) The penalty determined by the California Health Benefit Exchange pursuant to Title 24 (commencing with Section 100700) of the Government Code shall be paid upon notice and demand by the Franchise Tax Board, and except as provided in paragraph (2), shall be assessed and collected in the same manner as an assessable penalty under Chapter 4 (commencing with Section 19001) of Part 10.2.
(2) Notwithstanding any other law, in the case of any failure by a taxpayer to timely pay the penalty described in paragraph (1), the taxpayer shall not be subject to any criminal prosecution or criminal penalty with respect to that failure.
(3) Notwithstanding any other law, the Franchise Tax Board shall not file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty described in paragraph (1), or levy on that property with respect to that failure.
(b) The Franchise Tax Board shall revise the returns required to be filed pursuant to Article 1 (commencing with Section 18501) of Chapter 2 of Part 10.2 to include a line for the penalty assessed pursuant to this section.
(c) Moneys collected from the penalty assessed pursuant to this section shall be deposited into the Health Care Coverage Penalty Fund created pursuant to Section 100706 of the Government Code.