California forecast: Benefit, insurance laws may soon be pouring 

A song from the 1970s laments that “it never rains in California … it pours, man, it pours.” We may see September showers as the state’s legislature heads into its final month after returning from summer recess. A number of benefit and insurance bills have already passed one house. Generally, three steps remain: appropriations approval, a final floor vote and Governor Gavin Newsom’s signature. Scheduled adjournment date is Sept. 14. 

Paid leave. Two bills would modify the state’s paid disability/medical and family leave programs. First, AB 518 (effective July 1, 2024) would add designated persons to the family member definition: those “related by blood or whose association with the employee is the equivalent of a family relationship.” This will would conform to the family member definition to that in the California Family Rights Act and Healthy Workplaces, Healthy Families Act. Second, AB 575 would expand child-bonding leave to include leave time for a new minor child in loco parentis (a person taking care and control of a child without formal legal approval). It would also no longer allow employers to require employees to use up to two weeks of vacation before taking family leave. The effective date is unclear. 

For paid sick leave starting in 2024, SB 616 would increase the annual usage cap from three to seven days (24 to 56 hours)  and total accrual from six to 14 days (48 to 112 hours), among other changes. 

Unpaid leave. California’s requirement of five days of unpaid bereavement leave would include a reproductive loss event under SB 848. A reproductive loss event would include a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction. 

Prescription drugs. For 2025 and 2026 only, SB 873 would require fully insured plans and HMOs to apply 90% of rebates to reduce cost sharing at the point of sale. These plans would have a cap on insulin cost sharing at $35 for a 30-day supply under SB 90, starting with the 2025 plan year. If enacted, SB 70 would bar these plans from limiting, excluding – or applying higher cost sharing to – a drug prescribed for off-label use if the drug has been previously covered for a chronic condition or cancer, even the drug is not in the plan’s formulary. SB 70 would take effect starting with the 2024 plan year. 

Coverage mandate bills. For plans issued, amended or renewed on or after Jan. 1, 2024, SB 729 would add in vitro fertilization to the state’s existing fertility plan coverage mandate, applicable only to fully insured plans and HMOs. In addition, large group market plans would be required to cover three completed oocyte retrievals with unlimited embryo transfers. Infertility would be more broadly defined to include inability to reproduce either as an individual or with a partner without medical intervention.  

The next two bills would take effect for plans issued, amended or renewed on or after Jan. 1, 2025. First, AB 85 would require these plans to cover screenings for social determinants of health, defined as “the conditions under which people are born, grow, live, work, and age, including housing, food, transportation, utilities, and personal safety.” Plan networks would have to include access to peer support specialists, lay health workers, social workers, or community health workers for primary care physicians. Second, AB 716 would provide balance billing protections for plan participants related to non-contracting ground ambulance providers; federal balance billing protections in the No Surprises Act apply to air ambulance services only.  

AB 1432 would apply existing plan coverage mandates related to abortion, abortion-related services and gender-affirming care to fully insured plans issued in another state. Its effective date is unclear. 

None of these laws would apply to self-funded ERISA plans. 

Governor Newsom has competing priorities, including mental health, bond issues likely headed for the November ballot, and the start of a state-driven push for a US Constitution amendment on gun control. While not all of the above bills may become law, some likely will, come rain or shine.