Public Agency Benefits Intermediary Compensation Disclosure Act.

Plain English Breakdown

The official source material does not specify the exact penalties or enforcement mechanisms beyond authorizing administrative penalties by the Insurance Commissioner.

Public Agency Benefits Intermediary Compensation Disclosure Act

This act requires certain service providers who work with local public agencies to disclose their compensation and financial interests related to health care benefits arrangements before making a contract.

What This Bill Does

• Requires covered service providers, such as brokers or consultants, to tell local public agencies about any direct or indirect payments they expect to receive for providing services before entering into, extending, renewing, or materially amending a contract or arrangement with the agency or its group health plan.
• Prohibits covered service providers from requesting, accepting, or receiving compensation without first disclosing it to the public agency.
• Requires disclosure if the provider reasonably expects to receive $1,000 or more in compensation during the term of the contract or arrangement.
• Authorizes the Insurance Commissioner to investigate alleged violations and set administrative penalties.

Who It Names or Affects

• Local public agencies such as city or county governments.
• Service providers like brokers, agents, consultants, and advisors who work with local public agencies on health care benefits.

Terms To Know

Covered service provider

A broker, agent, consultant, or advisor that meets certain criteria set by the law.

Public agency

Local entities such as city or county governments.

Limits and Unknowns

• The bill does not specify what happens if a service provider fails to disclose compensation.
• It is unclear how the new requirements will be enforced in practice.

Official Summary Text

SB 1244, as amended, Allen.
Public Agency Benefits Intermediary Compensation Disclosure Act.
Existing law provides for the regulation of health insurers by the Department of Insurance. Existing
Existing
law requires various disclosures to be made regarding
health care service plan and
health insurance benefits and coverages. Existing law generally regulates the conduct of business between
health care service plans and solicitors and health
insurers and broker-agents, including requirements regarding contracts in which the
solicitor represents the health care service plan or the
broker-agent represents the insurer.
This bill, the Public Agency Benefits Intermediary Compensation Disclosure Act, would require a covered service provider, defined to mean a broker, agent, consultant, or advisor that meets specified criteria, to disclose to a public
agency
agency, defined to only include local entities,
or its group health plan the direct and indirect compensation it expects to receive for providing brokerage or consulting services, among other information, before it enters into, extends, renews, or
materially amends a contract or arrangement for brokerage services or consulting services with the public agency or its plan. The bill would also require a covered service provider to disclose compensation and material financial interests related to a covered health care benefits arrangement that the covered service provider recommends, places, renews, services, or materially influences for the public agency or its group health plan. Disclosure would be required under these provisions if the covered service provider reasonably expects it would receive $1,000 or more in compensation during the term of the contract or arrangement. The bill would require these disclosures at specified times.
This bill would prohibit a covered service provider from requesting, accepting, or receiving direct or indirect compensation in connection with brokerage services or consulting services provided to a public agency or its plan unless the compensation is disclosed, and would prohibit
evasion of disclosure requirements.
The bill would authorize the Insurance Commissioner to investigate alleged violations of these provisions and would set forth
specified administrative penalties for violations.

Current Bill Text

Download Bill PDF