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Archive for May, 2010

LEG REG REVIEW 2010, 14th Issue May 24

May 26

Posted by GPAHUAdmin in Legislative | No Comments

LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol.  It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities.  It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU) or Manufacturers Association of South Central PA (MASCPA).  Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/728-1164 or e-mail to xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from this list.

GOVERNOR ISSUES HEALTH IMPLEMENTATION ORDER

On May 19, Governor Ed Rendell issued Executive Order 2010-2 to establish an inter-agency working group to oversee the implementation of the federal Patient Protection and Affordable Health Care Act in Pennsylvania.  It also established a stakeholders’ group (Commonwealth Health Care Implementation Advisory Committee) to provide input including doctors, hospitals, insurance companies but no agents.  Objectives will include shaping the federally mandated Risk Pool, designing a model for the new Exchanges effective in 2014, and establishing a Strategic Plan for implementation.

An issue to note is whether or not legislation is needed to implement the Risk Pool for those medically uninsurable individuals who have been without insurance for six months.  The General Assembly is considering enabling legislation through Senate Bill 507 (Folmer-R-Lebanon) which passed the Senate and is now before the House and a new bill, House Bill 2514 advanced by Rep. Nick Kotik (D-Allegheny). A key difference between the Senate and House bills is that SB 507 expressly allows non-agents to market the Risk Pool.  PAHU has proposed language to require that Risk Pools be marketed in accord with Act 147, the Producer Licensing Law.  Text of both bills is available at www.legis.state.pa.us .

PRIMARY OUTCOMES TO NOTE

Now that the 2010 primary is over, it is time to note some outcomes of interest to those interested in the General Assembly.  Rep. Scott Conklin (D-Centre) is at press time the front-runner for the Democratic nominee for Lt. Governor.  In the Senate, there were three open seats out of 25 being elected this year and two incumbents faced and survived primary challenges.  In the House, 183 incumbents ran for re-election. Of those incumbents, only 16 Democrats and 9 Republicans had primary opponents.

  • One incumbent Karen Beyer (R-Lehigh) lost to political newcomer Justin Simmons.
  • Open races will see a number of House members seeking a move up to the state Senate:

-       Rep. Tim Solobay (D-Washington) is the Democratic nominee to succeed retiring Sen. Barry Stout

-       Rep. John Yudichak (D-Luzerne) is the Democratic nominee to succeed retiring Sen. Raphael Musto

-       Rep. Jim Wansacz (D-Allegheny) was unsuccessful in the primary contest to succeed retiring Sen. Bob Mellow (D-Lackawanna).

  • There were three special elections to fill vacancies.  The outcomes do not change the balance of power in the House.  These were:

-       Democrat Adam Ravenstahl was elected to fill out Rep. Dan Walko’s term from Allegheny County.

-       Republican Marcia Hahn was elected to complete the term of Craig Dally (R-Northampton).

-       Republican Marcy Toepel will complete the term of Bob Mensch from Montgomery County. Mensch had previously won a special election to complete former Senator Rob Wonderling’s term.

  • One seat remains vacant. Rep. Mario Civera (R-Delaware) resigned because he won a race for Delaware County Council.  A date for that election has not yet been set.

IMPLEMENTATION LEGISLATIVE UPDATES

Rep. Josh Shapiro (D-Montgomery) introduced House Bill 2462 to establish a framework for implementing the Patient Protection and Affordable Health Care Act.  It mirrors in many ways the Executive Order described above although the Governor and Shapiro appear to be on the same page since both spoke at the Governor’s press conference.  In addition, there are two House hearings on implementation scheduled for this week including:

-       May 25 Informational Briefing by the House Health & Human Services Committee

-       May 27 hearing by the House Insurance Committee

REGULATORY UPDATE

  • The Joint Underwriting Association (JUA), the insurer of last resort for medical malpractice insurance has proposed a 9.3% overall rate decrease effective January 1, 2011 unless administrative action to the contrary is taken by the Insurance Department before June 29, 2010.
  • The 2010 statewide average weekly wage for Workers’ Compensation purposes is $845.00 per week.
  • Stock casualty company North Pointe Insurance Company has asked for permission to redomesticate from Michigan to PA.
  • An application has been received by the Insurance Department to approve a merger of Eastern Life & Health Insurance Company into the Security Life Insurance Company.

US ISSUES GUIDANCE ON D26

The U.S. government has issued a number of guidance items relating to the new requirement that dependent coverage includes those up to age 26.  Previously the Blues and most other major carriers bumped up the effective date from September 23 to June 1 to prevent those just graduating from being cancelled and then reinstated in September. Following are the new resources:

-       Interim Final Rules offered by the US Department of Labor Employee Benefits Security Administration, the Department of the Treasury (IRS) and HHS.  This is found in the May 13 Federal Register volume 75, number 92 (www.regulations.gov)

-       Notice 2010-38 from the IRS which discusses tax treatment for dependent up to age 27 (www.irs.gov)

-       The Department of Labor issued a fact sheet http://www.dol.gov/ebsa/newsroom/fsdependentcoverage.html

IRS PROVIDES MORE ON SMALL BUSINESS TAX CREDIT

On May 14 the IRS also issued Notice 2010-44 providing further details on the small business health insurance premium tax credit available at www.irs.gov.  Of strong interest to many is the large number of examples designed to clarify the credit.  In addition, the IRS provided information on how to get feedback to the agency as excerpted below:

Comments should be submitted on or before September 1, 2010, and should reference Notice 2010-44. Send submissions to CC:PA:LPD:PR (Notice2010-44), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044 or sent electronically, via the following e-mail address:

Notice.comments@irscounsel.treas.gov. Please include “Notice 2010-44” in the subject line of any electronic communication. All material submitted will be available for public inspection and copying.  The principal author of this notice is Mireille Khoury of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). (202) 622-6080.

ARE YOU and your business clients CONFUSED ABOUT THE NEW FEDERAL HEALTH REFORM LAW?  Vince Phillips has made dozens of presentations to business and insurance groups on the new law and its implementation timetable as it relates to Pennsylvania.  If interested in such a program please contact Vince Phillips via Joan Troutman at 717/732-7255 jtrout2792@aol.com.

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LEG REG REVIEW 2010, 13th Issue May 17

May 17

Posted by GPAHUAdmin in Legislative | No Comments

LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol.  It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities.  It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU) or Manufacturers Association of South Central PA (MASCPA).  Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/728-1164 or e-mail to xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from this list.

TUESDAY IS PRIMARY ELECTION DAY

May 18 is show-time for hundreds of PA state legislative candidates and the state contests for Congress, Governor and Lt. Governor, partially overshadowed by the Senate Democratic contest between incumbent Arlen Specter and challenger Rep. Joe Sestak. An unsettled mood seems to have gripped the electorate and this does not bode well for some incumbents such as Specter as shown by polls. Despite polls, the only poll that really counts is the one you decide with your vote on Election Day. Please exercise your right to vote!

WHILE THEY’RE ON BREAK, CATCH UP ON NEWS…

The General Assembly is on break because of the Primary election but there are a number of legislative items of interest to help bring you up to speed when they return.

  • Risk pool legislation went through the Senate 49-1.  Senate Bill 507 (Folmer-R-Lebanon) was amended to meet new federal requirements of the Patient Protection and Affordable Care Act such as having a six-month no insurance period prior to getting into the Risk Pool. This is a program for the medically uninsurable that will last until 2014. Although Pennsylvania is opting to have a risk pool, 18 states including neighbor Delaware have chosen to let the federal government operate a risk pool instead of the state doing it since, if the program exceeds premium revenues, the Federal Government would be on the hook rather than the state. SB 507 may have competition from a House bill being drafted now. Of interest to agents is the provision that referral fees could be paid to non-licensed persons in addition to licensed insurance agents who place people in the Risk Pool
  • PEO hearing was held by the House Labor Relations Committee on House Bill 2450 (Brennan-D-Lehigh).  This legislation would recognize Professional Employer Organizations as a pooling of small businesses’ employees who would be covered by master contract for health benefits and Workers’ Compensation. Employees remain under direction and control of the small business but legally would be employed by the PEO. Pennsylvania Association of Health Underwriters (PAHU) submitted a statement criticizing PEOs as vulnerable to Workers’ Compensation fraud and as being destructive to the employer-broker relationships at the local level.
  • HB 2392 (Shapiro-D-Montgomery) extends mini-COBRA insurance coverage to 15 months instead of the current nine months. This would enable addition Federal ARRA 65% subsidy money to flow to those former employees.  HB 2392 also requires reverting to nine months for mini-COBRA when the Federal subsidy ends. This has passed the House and sits in the Senate Banking & Insurance Committee.
  • The House Insurance Committee convened its hearing on the Community Health Reinvestment Agreement (CHRA) legislation (HB 2455-Eachus-D-luzerne) pointing to differences between the Blues versus the House Majority Leader and Insurance Commissioner Ario.  HB 2455 would extend the CHRA and dedicate an increased part of the Blues’ reserves to fund the adultBasic program until 2014. The Blues maintained that they had already contributed significantly and asked lawmakers to appreciate the tightened economic conditions facing the Blues now.
  • A cell phone and texting while driving ban (HB 2070 sponsored by Rep. Joe Markosek-D-Westmoreland) passed the House, was amended in the Senate Transportation Committee and awaits full Senate consideration.
  • Senate Bill 237 (Corman-R-Centre) was signed into law as Act 14 of 2010.  The law does a number of things including:

-       Updating Pennsylvania’s Surplus lines Law

-       Setting suitability standards for annuities

-       Protecting insurers’ confidential actuarial analyses submitted to the Insurance Department from public scrutiny

-       CHIP is extended through 2013

  • Also signed into law by the Governor was House Bill 526 (DeLuca-D-Allegheny) as Act 17. This ensures a refund of unearned credit insurance premium to consumers who pay off loans early. This was a priority of the PA Financial Services Association.

FEDERAL IMPLEMENTATION ACCELERATED

In addition to specific PA legislation required by the new federal law (Risk Pool, Insurance Ombudsman, etc.) the Federal Government has moved ahead with a number of implementations ahead of the statutory deadlines.

Some of these include:

-       Ban on company rescissions from HHS (now accepted by companies; original deadline Sept. 23))

-       FAQs on the new small business health insurance tax credits from the IRS

-       Descriptive rules on the age 26 dependent provision of the new law by HHS, IRS and the US Department of Labor (May 10; original deadline Sept. 23 with Blues and other major carriers agreeing to keep graduating young adults as dependents June 1 rather than canceling them out and reinstating them in September)

-       Early compliance by companies for the September requirement that there be no pre-existing conditions for children (March 29)

-       Early retiree insurance program offers claim reimbursements to companies that will offer medical insurance for retirees aged 55-64 (May 4)

-       Closing the Medicare Donut Hole: HHS says that the first $250 checks will go out to seniors June 15.

-       Medical Loss Ratio (MLR) methodology by June 1 instead of end of year

MEDICAL LOSS RATIO DECISION ACCELERATED

One important new requirement is that insurers must meet a Medical Loss Ratio (MLR). This MLR methodology (what constitutes a claim versus non-claim insurer overhead) was originally set for December 31, 2010.  Now, HHS has said that NAIC must submit its findings by June 1.  The MLR for large groups is 85% and 80% in the small group market.  If carriers violate the MLR they would have to issue refunds for the difference to customers.  On May 14, the NAIC issued a press release stating that a preliminary letter had been sent to HHS regarding its efforts thus far.  Also noted in the press release was an NAIC letter to HHS regarding HHS’ new authority to review health insurer premium increases as a major expansion of federal authority into the traditionally state-regulated area of rate review. (www.naic.org)

ARE YOU and your business clients CONFUSED ABOUT THE NEW FEDERAL HEALTH REFORM LAW?  Vince Phillips has made dozens of presentations to business and insurance groups on the new law and its implementation timetable as it relates to Pennsylvania.  If interested in such a program please contact Vince Phillips via Joan Troutman at 717/732-7255 jtrout2792@aol.com.

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LEG REG REVIEW 2010, 12th Issue May 3

May 4

Posted by GPAHUAdmin in Legislative | No Comments

LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol.  It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities.  It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU) or Manufacturers Association of South Central PA (MASCPA).  Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/728-1164 or e-mail to xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from this list.

INSURANCE HEARING ON BLUES May 4

The House Insurance Committee plans a hearing May 4 on the renewal of the Community Reinvestment Agreement (CRA) that the Rendell Administration negotiated with the Blues several years ago to tap their resources to explicit support public sector programs such as the adultBasic program.  CRA expires this year and House Bill 2455 (Eachus-D-Luzerne) would renew it and ensure more funding going to adultBasic.  Only one of the bill’s 45 sponsors is Republican.  HB 2455 would expire in 2014 when Exchanges begin per Federal law.

MINI-COBRA SENT TO SENATE

On April 27, HB 2392 (Shapiro-D-Montgomery) extending mini-COBRA benefits from nine to 15 months was sent to the Senate where it was referred to the Senate Banking & Insurance Committee.  The bill is designed to enable unemployed Pennsylvanians from businesses 2-19 in size to qualify for the extension of the Federal 65% health premium subsidy.  It also reverts back to the original nine months after the Federal subsidy expires.

WHISTLEBLOWER BILL ADVANCES

The House voted 187-0 for House Bill 2108 on April 26 to protect employees from reprisals if they report a violation of a local, state, or Federal law.  Sponsored by Rep. Brian Ellis (R-Butler), the bill has 101 sponsors from both parties and represents an ideological span across the political spectrum.  It was amended to specifically include whistleblower protection for employees of the General Assembly itself.  It joins House Bill 2365 (Drucker-D-Montgomery) which also protects whistleblowers.  HB 2365 passed the House April 20.

PEO LEGISLATION SURFACES

Legislation regulating the functioning of Professional Employer Organizations (PEOs) is the subject of a House Labor Relations Committee hearing May 5.  PEOs are business entities that transfer small businesses’ employees in to a large group while still allowing control and direction to the original business owner.  Proponents say that PEOs create an economy of scale with a large group re Workers’ Compensation and employee benefits.  Detractors suggest that PEOs also invite Workers’ Compensation job classification issues and impedes a local insurance agency from adequately servicing the needs of his/her small business client since the employees will technically be employed by a large national concern in another state.  The specific legislation is HB 2450 (Brennan-D-Lehigh) introduced April 29.  There may also be questions regarding how jurisdictional authority may work regarding health insurance across state lines.

FEDERAL FLOOD SEES SOME PROGRESS

Last week the US House Financial Services Committee reported out HR 5114 to reauthorize the National Flood Insurance Program for five years.  In addition, it would delay higher rates for homeowners who are newly included in flood zones because of the new rate maps.  It must still pass the House and Senate before being enacted.

DEPARTMENT TAKES ‘GREEN’ ACTION

On April 29, the Insurance Department issued a press release announcing its approval of a homeowner’s five-percent insurance premium discount if the structure is LEED certified.  LEED stands for the Leadership in Energy and Environmental Design, a building standard that incorporates ‘Green’ building materials and construction techniques (www.usgbc.org).  Although the discount was specifically approved for Traveler’s, other such approvals may not be too far behind.  The decision also recognizes additional costs associated with LEED compliant construction.  The press release was silent on other similar ‘Green’ construction standards such as the National Green Building Program offered by the National Association of Home Builders (www.nahb.org).  Discounts take effect June 20 for new policies and August 26 for renewed policies.  In a related area, the Department previously approved discounts for homeowners using solar or geothermal energy but this is the first ‘Green’ construction insurance premium discount in PA.

ACTIONS BY THE GOVERNOR

  • Governor Rendell signed five bills into law April 29.  One, House Bill 602 (Pashinski-D-Luzerne), expands duties of dental assistants with the goal of reducing health care costs.
  • The Governor has nominated Tom Gluck to be his next Secretary of Education.  Gluck has been serving in an acting capacity and served former state Senator (now congresswoman) Allyson Schwartz (D-Montgomery) in the General Assembly.
  • May has been proclaimed as ‘Older Pennsylvanians Month’.

PENNSYLVANIA SAYS YES TO RISK POOL

Pennsylvania has joined 28 states that have notified the US Department of Health & Human Services that they intend to have state Risk Pools for those individuals who are medically uninsurable.  (15 states have said that they will have HHS implement a risk pool for their residents.)  Legislation must still be enacted by July to make a Risk Pool operational in Pennsylvania.  Currently, the PA Senate is considering Senate Bill 507 (Folmer-R-Lebanon).  Comparable House legislation has not yet been introduced.

UPCOMING

  • The Independent Regulatory Review Commission (IRRC) will meet May 13 in Harrisburg
  • The PA Office of Financial Education (Banking Department) hosts the Common Wealth Symposium in Grantville May 11-12.  It focuses on providing educators with tools to better educate their students on financial literacy.  Details: 717/783-2498

HITECH UPDATE

In February 2010 the new Business Associates compliance rules went into effect to strengthen privacy protections within HIPAA and to expand the liability of Business Associates (thanks to the ARRA legislation.)  The HIPAA Survival Guide has just issued its May newsletter which focuses on the Business Associate issue.  http://www.hipaasurvivalguide.com/

TAX AMNESTY BEGINS

The new PA Tax Amnesty Program which waives penalties and half of the interest has opened in PA for those wishing to settle delinquent tax accounts.  The Commonwealth hopes to raise $100 million from this one-time program, especially important given the glum news last week that tax collections for the fiscal year ending June 30, 2010 will be at least $1 billion short of expectations.  Details: www.PATaxPayUp.com

ARE YOU CONFUSED ABOUT THE NEW FEDERAL HEALTH REFORM LAW?  Vince Phillips has made dozens of presentations to business and insurance groups on the new law and its implementation timetable as it relates to Pennsylvania.  If interested in such a program please contact Vince Phillips via Joan Troutman at 717/732-7255 jtrout2792@aol.com.

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