Item 6. California LifeLine Presentation LIOB July 2012

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California LifeLine Program

Overview and Update

Low Income Oversight Board

July 10, 2012

Background

The Universal Lifeline Telephone Service (ULTS) began with the

1984 Moore Act (Assembly Bill 1348)

Goal: to promote universal service

Carriers required to offer basic residential service at ½ of the lowest rate in California

Decision 96-10-066 quantified rules for the program

Carriers responsible for administering the program

Customers self-certified income eligibility

Carriers submitted claims for reimbursement

 In 2004 the FCC (04-87) required third party verification

Income eligibility in the program must be verified.

Customers can alternatively qualify based on participation in approved public assistance programs

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Background

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continued

The Commission established a centralized customer enrollment process

 D. 07-05-030 required a third party vendor to perform the California

LifeLine Administrator’s duties.

The California LifeLine Administrator’s primary duties:

Reviews application and renewal forms

Determines eligibility and notifies applicants

Audits 3% of program participants

Notifies program participants and carriers of the status of eligibility and enrollment.

 Current contractor: Xerox State and Local Solutions, Inc. (6/1/12)

3

Background

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continued

Commission required pre-qualification for California LifeLine effective July 1, 2009, D. 08-08-029

Pre-Qualification required applicants to pay regular rates for Basic

Service until approved for LifeLine.

Subscribers receive a bill credit or check (if requested) for the difference between the regular rates and California LifeLine discounted rates (retroactive to the date of the initial request for

California LifeLine).

Customers are no longer subject to back billing of regular charges if disqualified for California LifeLine.

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Recent Changes: Specific Support Amount

D. 10-11-033 (Resolution T-17321) established a new subsidy mechanism for the California LifeLine, effective December 1, 2011

Set a Specific Support Amount (SSA) of $11.50 per month per LifeLine subscriber.

Carriers reimbursed based on monthly weighted average subscriber count.

SSA subsidy updated annually based on 55% of highest Carrier of Last Resort

(COLR)* Basic Service rate.

Administrative Cost reimbursement capped at $0.50, if supported, otherwise

$0.03 per weighted average subscriber.

Administrative Cost cap reviewed annually, increases capped at CPI-U rate of inflation.

Bad debt reimbursement ended December 2011.

$6.84 maximum LifeLine Rate until 12/31/12 .

$5.00 LifeLine Rate floor until 12/31/12 .

* Uniform Regulatory Framework Carriers

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Recent Changes: FCC 12-11

In February 2012, the FCC made fundamental changes to the

Lifeline program

New Customer eligibility requirements strengthened:

Proof of eligibility required for all applicants

Last four digits of SS# and Date of Birth required

Yearly self-certification of eligibility under penalty of perjury

Federal 4-Tier subsidy replaced with flat rate subsidy: $9.25

Connection (Linkup) subsidy eliminated except for Enhanced Lifeline

Toll Limitation Service support reduced

Definition of “household” revised to allow multiple “households” at same address

Other administrative changes

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Application Process

California LifeLine Application Process:

Customer requests LifeLine service with carrier

Applicant pays regular rates until approved (pre-qualification)

The LifeLine Administrator checks customer data for duplicate LifeLine discounts and mails application form (pink envelope)

Applicant fills out form (paper or online at www.californialifeline.com

) and submits proof of eligibility

Proof of participation in a means-tested program

Proof of income eligibility

The Administrator reviews the form and support; determines eligibility; notifies the customer and carrier

If approved, the LifeLine benefits are backdated to customer’s request date

If denied, customer continues to pay regular rates.

 Customer may appeal the denial to the CPUC

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California LifeLine Rates

 December 1, 2011 to December 31, 2012

LifeLine Rates may not exceed $6.84 nor be less than $5.00

LifeLine Rates will vary by carrier

LifeLine Rate is equal to the retail rate less federal subsidy less

SSA, subject to cap and floor

 Beginning January 1, 2013

LifeLine Rates may not exceed ½ of the carrier’s basic rate, with no price floor

LifeLine Rates will vary by carrier

LifeLine Rate is equal to the retail rate less federal subsidy less

SSA.

Subsidy will be calculated assuming no less than $5.00 LifeLine

Rate.

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Wireless – federal Lifeline

 The Commission approved wireless carriers to offer federal Lifeline

 Cricket, Nexus, Telscape, and Virgin Mobile (pending on launch)

 April 2012 - 115,405 wireless federal Lifeline participants

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California LifeLine Subscribership

Declined Since 2006

July 2006 3,134,139

April 2012* 1,547,978

*Note: does not included federal Lifeline participants.

 Likely reasons for decline:

Implementation of 3 rd party enrollment process

Subscribers not renewing their eligibility

Move from wireline to wireless/VoIP/alternate providers

Lack of interest in program

Privacy concerns, fear of dealing with government

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California LifeLine Budget – 2012/2013:

$355 million

Carrier Claims -

LifeLine Administrator -

Outreach Contract -

Staff Costs -

Other Costs -

Total

$330 million

$ 14 million

$ 6 million

$ 1 million

$ 4 million

$355 million

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Current Eligibility Requirements – Method 1

Program-Based:

Medicaid/Medi-Cal

Low Income Home Energy Assistance Program (LIHEAP)

Supplemental Security Income (SSI)

Federal Public Housing Assistance or Section 8

CalFresh, Food Stamps or Supplemental Nutrition Assistance Program (SNAP)

Healthy Families Category A

National School Lunch Program (NSLP)

Tribal TANF

Bureau of Indian Affairs General Assistance

Women, Infants and Children Program (WIC)

Head Start Income Eligible (Tribal Only)

Temporary Assistance for Needy Families (TANF)

 California and Stanislaus County Work Opportunity and Responsibility to Kids

(CalWORKS) / (StanWORKS), Welfare-to-Work (WTW), and Greater

Avenues for Independence (GAIN)

Federal Distribution Program on Indian Reservations (FDPIR)

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Current Eligibility Requirements – Method 2

 Income-Based:

Household Size LifeLine Annual Income Limits (06/01/12)

1-2 members $24,700

3 members $28,800

4 members $34,800

Each additional member add $6,000

 Other Eligibility Information

One discount per household; 2 nd discount only for TTY

Applicant not claimed as a dependent on tax return

Discount for primary residence

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Advertising and Outreach (2011)

Advertising Outreach

Creative

Development

Mediums

TV

Educations Presentations Events

Radio

Outdoor

Print

Online

Advertising and Outreach

(Spring and Summer 2011)

Developed new ad campaign, “Hello, Savings!”

Statewide media buy

Collateral: banners, posters, displays, brochures (19 languages), and presentations

Supermarket street marketing

Media interviews

Business and media partnerships

Testimonial videos (5 languages)

Pro-bono newsletters and online links

School outreach

Current Outreach Efforts’ Objectives

Perform at least 160,000 consumer educations

Conduct at least 1,000 presentations

Secure attendance to at least 90 community events

Enlist a minimum of 1,000 new network organizations to distribute collateral materials on a voluntary basis

Recruit between 50 to 70 community-based and/or faithbased organizations to conduct the consumer educations

Arrange for articles and/or online links with a minimum of

30 entities

Target areas in which participation rates are below 75%

Call Center - Public

Primary roles: screen for eligibility, conduct optional survey, collect data, transfer consumers to carrier of choice, and provide general program information

Operates on weekdays from 7 a.m. to 7 p.m.

Serves multiple languages: Chinese, Cambodian,

Laotian, Tagalog, Vietnamese, Hmong, Korean,

Japanese, Spanish, and English (Language Line translation services are available for other languages.)

The Reasons Provided by Consumers for Contacting the California LifeLine Call Center, the Results of their Call, and the Source Informing Them of

California LifeLine

(September 2011 to Feb 2012)

Call Reasons

36% Eligibility Screening

17% Information

17% Application/Renewal

12% Federal Lifeline

8% Non-CA LifeLine Call

Call Results

36% Transferred to Carrier

20% Referred to App/Renewal

Phone Line

18% Information Only

Call by Source

34% Friends/Family

17% LIHEAP/LIEE

6% Flyer/Brochure

Contact Information

Benjamin Schein – LifeLine Implementation

 BDA@cpuc.ca.gov

; (415) 703-1088

Michaela Pangilinan – LifeLine Outreach

 WOW@cpuc.ca.gov

; (415) 703-1890

RHA, Inc. (Outreach Contractor) – Vanessa Anderson

 vanderson@rhainc.com

; (559) 447-7000

Consumer Affairs Branch

 http://www.cpuc.ca.gov/puc/cec/e_complaint/ ; (800) 649-7570

Xerox State and Local Solutions, Inc. (LifeLine Public Call Center)

 https://www.californialifeline.com/en

(866) 272-0349 – English

(866) 272-0350 – Spanish

(866) 272-0351 – Lao/Hmong

(866) 272-0352 – Khmer

(866) 272-0353 – Tagalog

(866) 272-0354

(866) 272-0355

(866) 272-0356

(866) 296-0860

– Korean

– Vietnamese

– Chinese

– Japanese

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