COMPLIANCE REVIEW REPORT 

CALIFORNIA HEALTH BENEFIT EXCHANGE 
Compliance Review Unit State Personnel Board November 30, 2016 
TABLE OF CONTENTS 

Introduction ..................................................................................................................... 1 
Executive Summary ........................................................................................................ 1 
Background ..................................................................................................................... 2 
Scope and Methodology.................................................................................................. 3 
Findings and Recommendations ..................................................................................... 4 
Examinations ............................................................................................................. 4 
Appointments ............................................................................................................. 5 
Equal Employment Opportunity ............................................................................... 12 
Mandated Training ................................................................................................... 13 
Departmental Response................................................................................................ 16 
SPB Reply ..................................................................................................................... 16 

INTRODUCTION 

Established by the California Constitution, the State Personnel Board (the SPB or Board) is charged with enforcing and administering the civil service statutes, prescribing probationary periods and classifications, adopting regulations, and reviewing disciplinary actions and merit-related appeals. The SPB oversees the merit-based recruitment and selection process for the hiring of over 200,000 state employees. These employees provide critical services to the people of California, including but not limited to, protecting life and property, managing emergency operations, providing education, promoting the public health, and preserving the environment. The SPB provide s direction to departments through the Board’s decisions, rules, policies, and consultation. 
Pursuant to Government Code section 18661, the SPB’s Compliance Review Unit (CRU) conducts compliance reviews of appointing authority’s personnel practices in five areas: examinations, appointments, equal employment opportunity (EEO) , personal services contracts (PSC’s), and mandated training, to ensure compliance with civil service laws and board regulations. The purpose of these reviews is to ensure state agencies are in compliance with merit related laws, rules, and policies and to identify and share best practices identified during the reviews. The SPB conducts these reviews on a three-year cycle. 
The CRU may also conduct special investigations in response to a specific request or when the SPB obtains information suggesting a potential merit-related violation. 

EXECUTIVE SUMMARY 
The CRU conducted a routine compliance review of California Health Benefit Exchange (Exchange) personnel practices in the areas of examinations, appointments, EEO, and PSC’s from August 1, 2014, through July 1, 2016, and mandated training from August 1, 2014, through August 1, 2016. The following table summarizes the compliance review findings. 

A color-coded system is used to identify the severity of the violations as follows: 
. Red = Very Serious . Orange = Serious 
. Yellow = Non-serious or Technical 
. Green = In Compliance 

BACKGROUND 
The Exchange, otherwise known as Covered California was established in the fall of 2010, after the enactment of the California Patient Protection and Affordable Care Act. The Exchange is a public entity within state government, with a five-member board appointed by the Governor and Legislature. The Exchange employs approximately 730 Service Center employees, located in Fresno and Rancho Cordova, responsible for providing consumer services, and approximately 400 Headquarters employees in 
Sacramento to support Service Center employees’ ability to provide consumer services. 
The Exchange’s purpose is to improve the health of Californians by ensuring their access to affordable, high-quality healthcare, with the mission of increasing the number of insured Californians, improving health care quality, lowering costs, and reducing health disparities by providing an innovative, competitive marketplace that empowers consumers to choose the health plan and providers that give them the best value. The Exchange has become a vital resource that is part of the broader fabric of ensuring all Californians have access to affordable health insurance, whether through their work, public programs, or the individual market. 

SCOPE AND METHODOLOGY 

The scope of the compliance review was limited to reviewing Exchange’s examinations, appointments, EEO program, PSC’s from August 1, 2014, through July 1, 2016, and mandated training from August 1, 2014, through August 1, 2016. The primary objective of the review was to determine if Exchange’s personnel practices, policies, and procedures complied with state civil service laws and board regulations, and to recommend corrective action where deficiencies were identified. 
A cross-section of the Exchange’s examinations and appointments were selected for review to ensure that samples of various examinations and appointme nt types, classifications, and levels were reviewed. The CRU examined the documentation that the Exchange provided, which included examination plans, examination bulletins, job analyses, 511b’s, scoring results, notice of personnel action (NOPA) forms, vacancy postings, application screening criteria, hiring interview rating criteria, certification lists, transfer movement worksheets, employment history records, correspondence, and probation reports. 
The review of the Exchange’s EEO program included examining written EEO policies and procedures; the EEO Officer’s role, duties, and reporting relationship; the internal discrimination complaint process; the upward mobility program; the reasonable accommodation program; the discrimination complaint process; and the Disability Advisory Committee (DAC). 
The Exchange did not execute any PSC’s subject to the Department of General Services approval and thus our procedural review during the compliance review period. 
In addition, the Exchange mandated training program was reviewed to ensure all employees required to file statements of economic interest were provided ethics training, and that all supervisors were provided supervisory and sexual harassment prevention training within statutory timelines. 
On November 10, 2016, an exit conference was held with the Exchange explain and discuss the CRU’s initial findings and recommendations. The CRU received and carefully reviewed the Exchange written response on November 17, 2016, which is attached to this final compliance review report. 

FINDINGS AND RECOMMENDATIONS 

Examinations 
Examinations to establish an eligible list must be competitive and of such character as fairly to test and determine the qualifications, fitness, and ability of competitors to perform the duties of the class of position for which he or she seeks appointment. (Gov. Code, § 18930.) Examinations may be assembled or unassembled, written or oral, or in the form of a demonstration of skills, or any combination of those tests. ( Ibid.) The Board establishes minimum qualifications for determining the fitness and qualifications of employees for each class of position and for applicants for examinations. (Gov. Code, § 18931.) Within a reasonable time before the scheduled date for the examination, the designated appointing power shall announce or advertise the examination for the establishment of eligible lists. (Gov. Code, § 18933, subd. (a).) the advertisement shall contain such information as the date and place of the examination and the nature of the minimum qualifications. (Ibid.) Every applicant for examination shall file an application in the office of the department or a designated appointing power as directed by the examination announcement. (Gov. Code, § 18934.) Generally, the final earned ratin g of each person competing in any examination is to be determined by the weighted average of the earned ratings on all phases of the examination. (Gov. Code, § 18936.) Each competitor shall be notified in writing of the results of the examination when the employment list resulting from the examination is established. (Gov. Code, § 18938.5.) 
During the period under review, the Exchange conducted four examinations. The CRU reviewed three of those examinations, which are listed below: 
Classification  Exam Type  Exam Components  Final File Date  No. of Apps  
Health Program Specialist I  Open Continuous  Statement of Qualifications (SOQ)1  6/30/2015  21  
Health Program Specialist I  Open Continuous  SOQ  8/25/2015  17  
Health Program Specialist I  Open Continuous  SOQ  1/15/2016  26  

In a statement of qualifications (SOQ’s) examination, applicants submit a written summary of their qualifications and experience related to a published list of desired qualifications. Raters, typically subject matter experts, evaluate the responses according to a predetermined rating scale designed to assess their ability to perform in a job classification, assign scores and rank the competitors in a list. 
FINDING NO. 1 – Examinations Complied with Civil Service Laws and Board Rules 
The CRU reviewed three open examinations, which the Exchange administered in order to create eligible lists from which to make appointments. The Exchange published and distributed examination bulletins containing the required information for all examinations. Applications received by the Exchange were accepted prior to the final filing date and were thereafter properly assessed to determine whether applican ts met the minimum qualifications for admittance to the examinations. The Exchange notified applicants as to whether they qualified to take the examination, and those applicants who met the minimum qualifications were also notified about the next phase of the examination process. After all phases of the examination process were completed, the score of each competitor was computed, and a list of eligible candidates was established. The examination results listed the names of all successful competitors arranged in order of the score received by rank. Competitors were then notified of their final scores. 
The CRU found no deficiencies in the examinations that the Exchange conducted during the compliance review period. Accordingly, the Exchange fulfilled its responsibilities to administer those examinations in compliance with civil service laws and board rules. 
Appointments 
In all cases not excepted or exempted by Article VII of the California Constitution, the appointing power must fill positions by appointment, including cases of transfers, reinstatements, promotions, and demotions in strict accordance with the Civil Service Act and Board rules. (Gov. Code, § 19050.) Appointments made from eligible lists, by way of transfer, or by way of reinstatement, must be made on the basis of merit and fitness, which requires consideration of each individual’s job-related qualifications for a position, including his or her knowledge, skills, abilities, experience, and physical and mental fitness. (Cal. Code Regs., tit. 2, § 250, subd. (a).) 
During the compliance review period, the Exchange made 870 appointments. The CRU reviewed 103 of those appointments, which are listed below: 
Classification  Appointment Type  Tenure  Time Base  No. of Appts  
Accountant Trainee  List Appointment  Permanent  Full Time  1  

Assistant Information Systems Analyst  List Appointment  Permanent  Full Time  2  
Associate Governmental Program Analyst  List Appointment  Permanent  Full Time  15  
Associate Management Auditor  List Appointment  Permanent  Full Time  1  
Career Executive Assignment A, Deputy Director  List Appointment  Permanent  Full Time  1  
Career Executive Assignment B, Director  List Appointment  Permanent  Full Time  1  
Executive Assistant  List Appointment  Permanent  Full Time  1  
Health Program Manager III  List Appointment  Permanent  Full Time  1  
Health Program Specialist I  List Appointment  Permanent  Full Time  3  
Health Program Specialist II  List Appointment  Permanent  Full Time  1  
Marketing Specialist I, California State Lottery  List Appointment  Permanent  Full Time  1  
Office Assistant (Typing)  List Appointment  Permanent  Full Time  7  
Office Technician (Typing)  List Appointment  Permanent  Full Time  1  
Personnel Specialist  List Appointment  Limited Term  Full Time  1  
Personnel Specialist  List Appointment  Permanent  Full Time  1  
Program Technician II  List Appointment  Permanent  Intermittent  5  
Program Technician III  List Appointment  Permanent  Full Time  1  
Program Technician III  List Appointment  Permanent  Intermittent  5  
Senior Information Systems Analyst (Specialist)  List Appointment  Permanent  Full Time  2  
Senior Information Systems Analyst (Supervisor)  List Appointment  Permanent  Full Time  1  
Staff Programmer Analyst (Specialist)  List Appointment  Permanent  Full Time  1  
Staff Services Analyst (General)  List Appointment  Permanent  Full Time  7  
Staff Services Management Auditor  List Appointment  Permanent  Full Time  1  
Staff Services Manager I  List Appointment  Permanent  Full Time  1  
Staff Services Manager III  List Appointment  Permanent  Full Time  3  

Supervising Program Technician III  List Appointment  Permanent  Full Time  2  
Systems Software Specialist I (Technical)  List Appointment  Permanent  Full Time  1  
Associate Governmental Program Analyst  Mandatory Reinstatement  Permanent  Full Time  1  
Office Assistant (Typing) LEAP  Mandatory Reinstatement  Permanent  Full Time  1  
Program Technician II  Mandatory Reinstatement  Permanent  Full Time  3  
Senior Accounting Officer (Specialist)  Mandatory Reinstatement  Permanent  Full Time  1  
Supervising Program Technician III  Mandatory Reinstatement  Permanent  Full Time  2  
Program Technician II  Permissive Reinstatement  Permanent  Full Time  1  
Executive Assistant  Training & Development  Permanent  Full Time  2  
Supervising Program Technician III  Training & Development  Permanent  Full Time  1  
Staff Services Manager II (Managerial)  Temporary Authorization Utilization (TAU)  Temporary  Full Time  1  
Associate Government Program Analyst  Retired Annuitant  Temporary  Intermittent  1  
Business Services Officer II (Specialist)  Retired Annuitant  Temporary  Intermittent  1  
Senior Administrative Analyst (Accounting Systems)  Retired Annuitant  Temporary  Intermittent  1  
Staff Services Analyst (General)  Retired Annuitant  Temporary  Intermittent  1  
Associate Management Auditor  Transfer  Permanent  Full Time  1  
Associate Personnel Analyst  Transfer  Permanent  Full Time  1  
Health Program Manager I  Transfer  Permanent  Full Time  2  
Health Program Specialist I  Transfer  Permanent  Full Time  2  
Information Officer I (Specialist  Transfer  Permanent  Full Time  1  
Office Technician (Typing)  Transfer  Permanent  Full Time  1  
Personnel Specialist  Transfer  Permanent  Full Time  1  

Research Program Specialist I  Transfer  Permanent  Full Time  1  
Senior Marketing Specialist, California State Lottery  Transfer  Permanent  Full Time  1  
Senior Personnel Specialist  Transfer  Permanent  Full Time  1  
Staff Services Analyst (General)  Transfer  Permanent  Full Time  2  
Staff Services Manager I  Transfer  Permanent  Full Time  3  
Staff Services Manager III  Transfer  Permanent  Full Time  1  

FINDING NO. 2 – Equal Employment Opportunity Questionnaires Were Not Separated From Applications 
Summary: 	Out of 103 appointments reviewed, 10 appointment files included applications where EEO questionnaires were not separated from the STD 678 employment application. Specifically, 134 of the 2,535 applications reviewed included EEO questionnaires that were not separated from the STD 678 employment application. 
Criteria: 	Government Code section 19704 makes it unlawful for a hiring department to require or permit any notation or entry to be made on any application indicating or in any way suggesting or pertaining to any protected category listed in Government Code section 12940, subdivision (a) (e.g., a person's race, religious creed, color, national origin, age, or sexual orientation). Applicants for employment in state civil service are asked to provide voluntarily ethnic data about themselves where such data is determined by the California Department of Human Resources (CalHR) to be necessary to an assessment of the ethnic and sex fairness of the selection process and to the planning and monitoring of affirmative action efforts. (Gov. Code, § 19705.) The EEO questionnaire of the state application form (STD 678) states, “This questionnaire will be separated from the application prior to the examination and will not be used in any employment decisions.” 
Severity: 	Very Serious. The applicants’ protected classes were visible, subjecting the agency to potential liability. 
Cause: 	The Exchange states that this finding was the result of human oversight versus procedural error. 
Action: 	It is recommended that within 60 days of the Executive Officer’s approval of these findings and recommendations, the Exchange submit to the CRU a written corrective action plan that the department will implement to ensure conformity with in the future that EEO questionnaires are separated from all applications. Copies of any relevant documentation should be included with the plan. 

FINDING NO. 3 – Probationary Evaluations Were Not Provided for All Appointments Reviewed 
Summary: The Exchange did not prepare, complete, and/or retain 89 required probationary reports of performance. 
Classification  Appointment Type  No. of Appointments  No. of Uncompleted Prob. Reports  
Associate Governmental Program Analyst  List Appointment  8  20  
Executive Assistant  List Appointment  1  2  
Health Program Manager III  List Appointment  1  3  
Health Program Specialist I  List Appointment  3  7  
Health Program Specialist II  List Appointment  1  1  
Marketing Specialist, California State Lottery  List Appointment  1  1  
Office Assistant (Typing)  List Appointment  4  7  
Office Technician (Typing)  List Appointment  1  1  
Personnel Specialist  List Appointment  1  2  
Program Technician II  List Appointment  4  10  
Program Technician III  List Appointment  5  10  
Senior Information Systems Analyst (Specialist)  List Appointment  2  5  
Staff Services Manager III  List Appointment  2  4  
Supervising Program Technician III  List Appointment  1  3  

Classification  Appointment Type  No. of Appointments  No. of Uncompleted Prob. Reports  
Systems Software Specialist (Technical)  List Appointment  1  1  
Program Technician II  Permissive Reinstatement  1  3  
Information Officer I (Specialist)  Transfer  1  3  
Office Technician (Typing)  Transfer  1  2  
Senior Personnel Specialist  Transfer  1  2  
Staff Services Manager I  Transfer  1  2  
Total  41  89  

Criteria: 	A new probationary period is not required when an employee is appointed by reinstatement with a right of return. (Cal. Code Regs., tit. 2, § 322, subd. (d)(2).) However, the service of a probationary period is required when an employee enters state civil service by permanent appointment from an employment list. (Cal. Code Regs., tit. 2, § 322, subd. (a).) In addition, unless waived by the appointing power, a new probationary period is required when an employee is appointed to a position under the following circumstances: (1) without a break in service in the same class in which the employee has completed the probationary period, but under a different appointing power; and (2) without a break in service to a class with substantially the same or lower level of duties and responsibilities and salary range as a class in which the employee has completed the probationary period. (Cal. Code Regs., tit. 2, § 322, subd. (c)(1) & (2).) 
During the probationary period, the appointing power is required to evaluate the work and efficiency of a probationer at sufficiently frequent intervals to keep the employee adequately informed of progress on the job. (Gov. Code, § 19172; Cal. Code Regs., tit. 2, § 599.795.) The appointing power must prepare a written appraisal of performance each one-third of the probationary period. (Cal. Code Regs., tit. 2, § 599.795.) 
Severity: 	Serious. The probationary period is the final step in the selection process to ensure that the individual selected can successfully perform the full scope of their job duties. Failing to use the probationary period to assist an employee in improving his or her performance or terminating the appointment upon determination that the appointment is not a good job/person match is unfair to the employee and serves to erode the quality of state government. 
Cause: 	The Exchange states that this finding was due to the unprecedented nature of work and severe time constraints placed on supervisors involved with establishing the Exchange under the Affordable Care Act. 
Action: 	It is recommended that within 60 days of the Executive Officer’s approval of these findings and recommendations, the Exchange submit to the CRU a written corrective action plan that addresses the corrections the department will implement to ensure conformity with the probationary requirements of Government Code section 19172. 

FINDING NO. 4 – Appointment Documentation Was Not Kept for the Appropriate Amount of Time 
Summary: 	The Exchange failed to retain personnel records such as NOPA’s, and applications. Specifically, of the 103 appointments reviewed, the Exchange did not retain six NOPA’s. Additionally, 10 appointment files reviewed were missing all applications for recruitment, except the appointee’s. 
Criteria: 	As specified in California Code of Regulations, title 2, section 26 (Rule 26), appointing powers are required to retain records related to affirmative action, equal employment opportunity, examinations, merit, selection, and appointments for a minimum peri od of five years from the date the record is created. These records are required to be readily accessible and retained in an orderly and systematic manner. (Cal. Code Reg., tit. 2, § 26.) 
Severity: 	Serious. Without documentation, the CRU could not verify if the appointments were properly conducted. 
Cause: 	The Exchange states that this finding is a result of appointment documentation being retained by hiring supervisors versus in the human resources division. 
Action: 	It is recommended that within 60 days of the Executive Officer’s approval of these findings and recommendations, the Exchange submit to the CRU a written corrective action plan that addresses the corrections the department will implement to ensure conformity with the record retention requirements of California Code of Regulations title 2, section 26. Copies of any relevant documentation should be included with the plan. 
Equal Employment Opportunity 
Each state agency is responsible for an effective EEO program. (Gov. Code, § 19790.) The appointing power for each state agency has the major responsibility for monitoring the effectiveness of its EEO program. (Gov. Code, § 19794.) To that end, the appointing power must issue a policy statement committed to EEO; issue procedures for filing, processing, and resolving discrimination complaints; issue procedures for providing equal upward mobility and promotional opportunities; and cooperate with the California Department of Human Resources by providing access to all required files, documents and data. (Ibid.) In addition, the appointing power must appoint, at the managerial level, an EEO Officer, who shall report directly to, and be under the supervision of, the director of the department to develop, implement, coordinate, and monitor the 
department’s EEO program. (Gov. Code, § 19795.) 
Because the EEO Officer investigates and ensures proper handling of discrimination, sexual harassment and other employee complaints, the position requires separation from the regular chain of command, as well as regular and unencumbered access to the head of the organization. 
Each state agency must establish a separate committee of employees who are individuals with a disability, or who have an interest in disability issues, to advise the head of the agency on issues of concern to employees with disabilities. (Gov. Code, § 19795, subd. (b)(1).) The department must invite all employees to serve on the committee and take appropriate steps to ensure that the final committee is comprised of members who have disabilities or who have an interest in disability issues . (Gov. Code, § 19795, subd. (b)(2).) 
The CRU reviewed the Exchange’s EEO program that was in effect during the compliance review period. 

FINDING NO. 5 – Equal Employment Opportunity Program Complied with Civil Service Laws and Board Rules 
After reviewing the policies, procedures, and programs necessary for compliance with the EEO program’s role and responsibilities according to statutory and regulatory guidelines, the CRU determined that the Exchange EEO program provided employees with information and guidance on the EEO process including instructions on how to file discrimination claims. Furthermore, the EEO program outlines the roles and responsibilities of the EEO Officer, as well as supervisors and managers. The EEO Officer, who is at a managerial level, reports directly to the Director of the Exchange. In addition, the Exchange has an established DAC which reports to the Director on issues affecting persons with disabilities. The Exchange also provided evidence of its efforts to promote EEO in its hiring and employment practices, to increase its hiring of persons with disabilities, and to offer upward mobility opportunities for its entry-level staff. Accordingly, the Exchange EEO program complied with civil service laws and board rules. 
Mandated Training 
Each member, officer, or designated employee of a state agency who is required to file 
a statement of economic interest (referred to as “filers”) because of the position he or 
she holds with the agency is required to take an orientation course on the relevant ethics statutes and regulations that govern the official conduct of state officials. (Gov. Code, §§ 11146 & 11146.1.) State agencies are required to offer filers the orientation course on a semi-annual basis. (Gov. Code, § 11146.1.) New filers must be trained within six months of appointment and at least once during each consecutive period of two calendar years, commencing on the first odd-numbered year thereafter. (Gov. Code, § 11146.3.) 
Upon the initial appointment of any employee designated in a supervisory position, the employee shall be provided a minimum of 80 hours of training, as prescribed by the California Department of Human Resources (CalHR). (Gov. Code, § 19995.4, subd. (b).) The training addresses such topics as the role of the supervisor, techniques of supervision, performance standards, and sexual harassment and abusive conduct prevention. (Gov. Code, §§ 12950.1, subds. (a), (b), & (c), & 19995.4, subd. (b).) The training must be successfully completed within the term of the employee’s probationary period or within six months of the initial appointment, unless it is demonstrated that to do so creates additional costs or that the training cannot be completed during this time period due to limited availability of supervisory training courses. (Gov. Code, § 19995.4, subd. (c).) As to the sexual harassment and abusive-conduct prevention component, the training must thereafter be provided to supervisors once every two years. (Gov. Code, § 12950.1.) 
Within 12 months of the initial appointment of an employee to a management or career executive assignment (CEA) position, the employee shall be provided leadership training and development, as prescribed by CalHR. (Gov. Code, §§ 19995.4, subds. (d) & (e).) For management employees the training must be a minimum of 40 hours and for CEAs the training must be a minimum of 20 hours. (Ibid.) Thereafter, for both categories of appointment, the employee must be provided a minimum of 20 hou rs of leadership training on a biannual basis. (Ibid.) 
The Board may conduct reviews of any appointing power’s personnel practices to 
ensure compliance with civil service laws and Board regulations. (Gov. Code, § 18661, subd. (a).) In particular, the Board may audit personnel practices related to such matters as selection and examination procedures, appointments, promotions, the management of probationary periods, and any other area related to the operation of the merit principle in state civil service. (Ibid.) Accordingly, the CRU reviews documents and records related to training that appointing powers are required by the afore-cited laws to provide its employees. 
The CRU reviewed the Exchange’s mandated training program that was in effect during the compliance review period. While the Exchange supervisory training was found to be in compliance, the ethics training and sexual harassment prevention training were found to be out of compliance. 

FINDING NO. 6 – Ethics Training Was Not Provided for All Filers 

Summary:  The Exchange did not provide ethics training to 13 of 207 existing filers. In addition, the Exchange did not provide ethics training to nine of 177 new filers within six months of their appointment.  
Criteria:  New filers must be provided ethics training within six months of appointment. Exiting filers must be trained least once during each consecutive period of two calendar years commencing on the first odd-numbered year thereafter. (Gov. Code, § 11146.3, subd. (b).) Course content must be approved by the Fair Political Practices  

Commission and the Attorney General. (Gov. Code, § 11146.1, subd. (c).) 
Severity: 	Very Serious. The department does not ensure its filers are aware of prohibitions related to his or her official position and influence. 
Cause: 	The Exchange states that it does not have an automated tracking system for training and due to the manual process, the training was not scheduled in a timely manner. 
Action: 	The Exchange must take appropriate steps to ensure that filers are provided ethics training within the time periods prescribed. 
It is therefore recommended that no later than 60 days after the 
SPB’s Executive 	Officer’s approval of these findings and 
recommendations, the Exchange must establish a plan to ensure compliance with ethics training mandates and submit to the SPB a written report of compliance. 

FINDING NO. 7 – Sexual Harassment Prevention Training Was Not Provided for All Supervisors 
Summary: 	The Exchange did not provide sexual harassment prevention training to 33 of 94 new supervisors within six months of their appointment. In addition, the Exchange did not provide sexual harassment prevention training to 102 of 143 existing supervisors every two years. 
Criteria: 	Each department must provide its supervisors two hours of sexual harassment prevention training every two years. New supervisors must be provided sexual harassment prevention training within six months of appointment. (Gov. Code, § 12950.1, subd. (a).) 
Severity: 	Very Serious. The department does not ensure its new supervisors are properly trained to respond to sexual harassment or unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. This limits the department’s ability to retain a quality workforce, impacts employee morale and productivity, and subjects the department to litigation. 
Cause: 	The Exchange states that this finding is due to severe time constraints involved with establishing the Exchange and not having mechanisms in place through the learning management system to generate electronic reminders and compliance reports. 
Action: 	The Exchange must take appropriate steps to ensure that its supervisors are provided sexual harassment prevention training within the time periods prescribed. 
It is therefore recommended that no later than 60 days after the 
SPB’s Executive 	Officer’s approval of these findings and 
recommendations, the Exchange must establish a plan to ensure compliance with sexual harassment training mandates and submit to the SPB a written report of compliance. 

DEPARTMENTAL RESPONSE 
The Exchange’s response is attached as Attachment 1. 

SPB REPLY 
Based upon the Exchange’s written response, the Exchange will comply with the CRU recommendations and findings and provide the CRU a corrective action plan. 
It is further recommended that the Exchange comply with the afore-stated recommendations within 60 days of the Executive Officer’s approval and submit to the CRU a written report of compliance. 

COV E 
CALIFORNIA 
November 17, 2016 
Suzanne Ambrose 
Executive Officer 
State Personnel Board 
801 Capitol Mall 
Sacramento, CA 95814 
Dear Ms. Ambrose, 
This letter is in response to the State Personnel Board's (SPB), Compliance Review of 
the California Health Benefit Exchange/Covered California's examinations, 
appointments, Equal Employment Opportunity (EEO) Program, and mandated training 
program during August 1, 2014, through July 1, 2016. Covered California would like to 
thank SPB's Compliance Review Unit (CRU) for their oversight and thoroughness in 
conducting our compliance review. The CRU's review afforded us the opportunity to 
work collaboratively with SPB to explore opportunities for enhancements to our hiring 
process, EEO Program, and administration of mandated training. 
The following are in response to SPB's Compliance Review Report. 
Finding No. 1 -Examinations Complied with Civil Service Laws and Board Rules: 
The SPB, CRU requires no response or action to this finding. 
Finding No. 2 -Equal Employment Opportunity Questionnaires Were Not Separated from Applications: 
Covered California recognizes the importance of protecting and ensuring confidentiality of EEO information during the hiring process. It is standard practice for the Human Resources Branch (HRB) to remove all EEO Questionnaires from employment applications. We are confident this finding is a result of human, versus procedural, error. With implementation of the Statewide Examination and Certification Online System (ECOS), EEO Questionnaires will no longer be accessible to hiring supervisors. Additionally, we have since reiterated the importance of and advised all HRB personnel to remove the EEO Questionnaire from all paper employment applications received. 
COVERED CALIFORNIA'" 1601 EXPOSITION BOULEVARD, SACRAMENTO, CA 95815 WWW.COVEREDCA.COM 
BOARD MEMBERS Diana S. Dooley, Chair Paul Fearer Genoveva Islas Marty Morgenstern Art Torres EXEC. DIRECTOR Peter V. Lee 

November 17, 2016 Page 2 
Finding No. 3 -Probationary Evaluations Were Not Provided for All Appointments Reviewed: 
In 2011, Covered California established the first Health Benefit Exchange under the Affordable Care Act. Due to the unprecedented nature of the work involved, there were severe time constraints placed upon supervisory staff that may have hindered their ability to perform some administrative tasks. In support of our commitment to provide all employee's performance feedback, HRB personnel developed and began providing annual training on When and How to Complete Probationary Period Reports in 2016. Additionally, we are in the process of implementing a probationary period tracking and reporting procedure for release in 2017. 
Finding No. 4-Appointment Documentation Was Not Kept for the Appropriate 
Amount nf Time~ 
Covered California recognizes the importance of maintaining and retaining appointment documentation and began revising our processes prior to SPB's Compliance Review. As of September 2016, HRB's Employment and Classification Services Unit revised our hiring process by implementing a new handbook and providing mandatory training to all hiring supervisors, HR liaisons, and HRB personnel. This process requires all hiring documents be processed by and retained within HRB. Retention of appointment documentation prior to implementation of our new hiring process is attributed to human error as applications were previously maintained by hiring supervisors. Through implementation of ECOS, ongoing training of HRB personnel, and requiring adherence to our new hiring process, we are committed to ensuring appointment documents are properly maintained. 
Finding No.5-Equal Employment Opportunity Program Complied with Civil Service Laws and board Rules: 
The SPB , CRU requires no response or action to this finding. 
Finding No. 6 -Ethics Training Was Not Provided for All Filers: 
Covered California currently requires completion of Ethics training by all Conflict of Interest {COl) filers through the Department of Justice's online tiaining. Though l;thics training is offered to and completion is required by ail COl filers, submission of training certificates is not consistently followed up on. This is a result of manual tracking in which we are taking steps to ~orrect by requiring all employees complete Ethics training through our Covered California University's (CCU) Learning Management System (LMS). The LMS will administer and track completion of Ethics training for all employees and generate electronic reminders and compliance reports for executive management. 
November 17, 2016 Page 3 
Finding No. 7 -Sexual Harassment Prevention Training Was Not Provided for All 
Supervisors: 
Covered California acknowledges the importance of providing and requiring compietion of Sexual Harassment Prevention (SHP) training for all employees including fulfillment of the two hour supervisory requirement through Basic Supervision. CCU notifies all supervisors of the Basic Supervision training requirements, which includes SHP training, and makes available to all supervisors through the California Department of Human Resources and Sacramento State College of Continuing Education. Though SHP training is made available, CCU is committed to ensuring compliance with completion and is~ in the process of utilizing LMS to generate electronic reminders and compliance reports for executive management. Supervisor'~ not having completed SHP training is attributed to the unprecedented nature of the work involved, wherein severe time constraints placed upon supervisory staff may have hindered their ability to do so, and mechanisms not being in place through LMS to generate electronic reminders and compliance reports. 
In response to SPB's Compliance Review, we acknowledge there are continual opportunities to build upon our appointment process and completion of mandated training. Through this process, we are confident we have established and communicated practices to ensure compliance with laws and rules governing our appointments and mandated training. 

sFcerely,n n 
I • 

~ilia VGtC)I'-­
sources Branch Chief