Assembly Bill 8 (as Passed by the Assembly)

Expanded Eligibility for Entitlement Programs
Publicly-funded health insurance coverage plans for the poor, such as Medi-Cal and Healthy Families, will be expanded to cover a larger number of children and parents up to 300% the Federal Poverty Level, which is around $60,000 in annual household income for a family of four.

Statewide Purchasing Pool
A state-sponsored “pool” for people who are not offered insurance through their employer. This would create economies of scale and offer people a more affordable option than buying individual insurance plans.  The purchasing pool would cover an estimated three to four million people.

Minimum Standard for Employers
All employers in the state would be required to spend 7.5% of payroll on health benefits for employees either by paying into the purchasing pool.  The vast majority of people in California currently obtain their health insurance coverage through their employer.

Guaranteed Coverage
Insurers will no longer be able to deny people coverage if they have certain pre-existing health conditions.

Individual Mandate
If an employee is offered health insurance through their employer or if they are eligible to purchase coverage through the state-sponsored insurance pool, they are required to have coverage.  However, if they are not able to obtain insurance through either of these methods, they are not required to purchase individual health insurance coverage.

Additional Federal Funding
By expanding publicly-funded health insurance coverage programs, the state will be able to access billions of dollars in federal funds to help pay for the programs in this bill.

Employee Tax Savings
This proposal will provide a way for employees to pay their health insurance premiums with pre-tax dollars, which will result in a 15-40% savings.

Improved Technology
Advancements in information technology, such as the development of electronic medical records, will be facilitated to realize additional savings and better disease management.

Affordability Exemption
The bill exempts anybody from having to accept employer-provided coverage if it would cost the employee more than 5% of their personal income.

In the purchasing pool, those under 300% of the federal poverty level (around $30,000 for an individual, $60,000 for a family of four) would be guaranteed coverage that would cost no more than 5% of their income, and they would not have to take up coverage if the plan had a maximum of more than $1500 for total out-of-pocket costs, including deductible.

Regulations and Oversight on Insurance Companies
The percentage of premium dollars that will go to administrative costs and corporate profits rather than patient care will be capped at 15%.

Reform the Individual Insurance Market
Health insurance plans purchased by individuals is one of the most expensive options.  A special assessment will be charged to insurers to reduce the cost of these plans.

Reform Small Group Insurance
Rules governing special plans that are made available to small employers will changed be to make those plans more affordable.