SACRAMENTO, Calif.—Last week, on Thursday, Sept. 25, 2014, California Governor Jerry Brown vetoed Assembly Bill No. 1877 (AB 1877) that would have required the Covered California state health insurance exchange to link buyers to a separate website selling adult vision coverage. Currently, only pediatric vision insurance is permitted to be sold on the exchange, bundled with medical plans, because it is mandated as one of the ten essential health benefits by the Affordable Care Act (ACA).

The veto follows the bill’s unanimous approval by the California State Senate on Thursday Aug. 21, 2014, and its unanimous passage in the California Assembly the following week on Monday Aug. 25, 2014, as reported by VMail.

The bill had been sponsored by Assembly Member Ken Cooley, who represents the 8th Assembly District in California, which includes Rancho Cordova, headquarters of the country’s largest vision care company, VSP Vision Care, with more than 71 million members and a network of 30,000 eye doctors. Rancho Cordova is also home to managed vision care company, Superior Vision, which covers more than 8.5 million members nationwide with a provider network that surpasses 55,000 access points after its merger with Block Vision, as reported by VMail Dec. 4, 2013.

In a letter explaining his reason for vetoing the bill, Governor Brown said that he viewed the law as creating a new, unnecessary, and perhaps federally impermissible state bureaucracy: “Creating a new state bureaucracy to inform consumers about vision plans isn’t necessary, nor is it advisable to divert Covered California’s focus with a new scheme, the governance of which may be impermissible under federal rules.”

Kirk Rothrock, CEO of Superior Vision, told VMail, “We’re certainly disappointed by Governor Brown’s veto of AB 1877. The action is indicative of policy makers overlooking the importance of stand-alone vision plans. Easy access to vision insurance through Covered California would have supported adult eyecare and vision wellness while helping to control health care costs. We applaud Assembly Member Ken Cooley and the California State Assembly and Senate for supporting the bill, and we hope that other states will support this type of legislation in the future.”

In response to the veto, Rob Lynch, president and CEO of VSP Global, a strong proponent of AB 1877, said, “There was unanimous voting of 78-0 in the State Assembly and 36-0 in the State Senate for this excellent solution to the problem of affordable access to eyecare for adults in California. We are surprised and shocked the Governor vetoed AB 1877.”

Supporters had viewed the bill as a way to ensure access to vision care for adults who sign up for health insurance via the state’s health insurance exchange, Covered California, because the ACA requires that the exchange sell only pediatric vision care as one of the essential health benefits. Following the Governor’s veto, next steps are in discussion, a VSP spokesperson told VMail.

In addition to being denied access to sell adult vision insurance via the state health care exchanges, stand-alone vision plans also object to the fact that they are required to pay a tax that is assessed on providers of health insurance as legislated by the ACA as a means of paying for subsidies for the impoverished uninsured. Julian Roberts, executive director of the National Association of Vision Care Plans (NAVCP), estimates that this tax amounts to about 2 percent to 2.5 percent of a company’s annual premiums.

Roberts told VMail, “We as an organization fought against this while regulations were being developed by participating in a hearing and giving testimony to the IRS about a year and a half ago.”

To object to being required to pay a tax for patients to whom it has no access, VSP plans to request a refund of the $25 million that it has already paid to the Internal Revenue Service. “We don’t have an issue with the Affordable Care Act,” said Jim McGrann, president of VSP Vision Care. “We don’t even have a problem paying the tax. We just want to participate.”

While Roberts doesn’t expect another IRS hearing, “We will continue to fight,” he told VMail. “We’ll continue to have discussions with the IRS and HHS, but it will likely require a legislative fix to have this addressed.”