California Insurers Dispute Retroactive Part Of COVID-19 Testing Bill

An association of insurance companies filed a legal action asking a judge to invalidate a provision in Senate Bill 510 that requires health plans and health insurers to pay for workplace COVID-19 testing performed retroactively to March 4, 2020, when a state of emergency was declared due to the coronavirus.

The petition was brought Thursday in Los Angeles Superior Court by the Association of California Life and Health Insurance Companies against Insurance Commissioner Ricardo Lara and Attorney General Rob Bonta. The ACLHIC is a trade association representing six full-service insurers that provide health care coverage to approximately 2 million Californians through individual and group markets.

A state Department of Insurance representative issued a statement Friday morning in response to the petition.

“While the Department of Insurance is still reviewing the lawsuit and can’t comment specifically on it, testing without patient cost-sharing is critical to public health during this pandemic,” the statement read.

According to the petition, there is no public health justification for the bill’s retroactive mandates.

“ACLHIC members will likely suffer significant damages if ACLHIC’s claims alleged herein are not promptly addressed,” the petition states.

SB 510, signed by Gov. Gavin Newsom on Oct. 8, becomes effective Jan. 1 and requires health plans and health insurers to reimburse both in-network and out-of-network providers for COVID-19 testing and related services without any cost- sharing, prior authorization or other utilization management requirements.

SB 510 requires insurers to pay for COVID-19 testing of workers in a workplace setting even if they are asymptomatic and have no known exposure. The ACLHIC petition challenges SB 510’s retroactivity requirement as unconstitutional, but the association does not dispute the requirement to pay for COVID-19 testing of workers in a workplace setting when those tests are performed after Jan. 1.