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.

GENERAL ASSEMBLY SWORN IN

On January 4, the 2011-12 session of the PA General Assembly officially began with the swearing in of members and election of Rep. Sam Smith as House Speaker and Joseph Scarnati as Senate President Pro Tempore.  Another development marking a huge change for the Senate is the retirement January 6 of Steve MacNett, the long-tenured counsel who guided the Senate for decades.

One other development marking the early days of the new Senate session is the date of March 15 to fill the vacancy created by the untimely December death of Senator Michael O’Pake (D-Berks).  Neither party has selected their nominee as of this writing.  O’Pake’s term would have run through 2012.

Senate Republicans also picked majority committee chairmen for the new session.  Leg Reg Review will print the complete list when the Senate Democrats finalize their selection.  Some key Republican changes are the move of Agriculture & Rural Affairs chair Mike Brubaker to chair the Finance Committee.  New Agriculture & Rural Affairs chair is Elder Vogel (Westmoreland).  A new committee was established, Inter-Governmental Affairs to be chaired by Lloyd Smucker from Lancaster County.

CORBETT ADMINISTRATION UPDATE

  • Tapped as Secretary of Health is New Yorker Eli Avila who is now Suffolk County Chief Deputy Commissioner Dept. of Health Services where he oversees a staff of more than 1,600 and an annual budget of more than $400 million.  This requires Senate confirmation.
  • Chief of Staff will be William F. Ward from Pittsburgh law office Ward McGough, LLC.  He had previously worked for Tom Corbett in the Attorney General’s office, the state’s Probation Board, and Solicitor of the Pittsburgh Citizen Police Review Board. This does not need legislative approval.

NONDISCRIMINATION Section 105(h) RULE DELAYED

Per Notice 2011-1, the IRS announced that it is not going to force compliance with the provision of the Patient Protection Affordable Care Act that prohibits discrimination in favor of highly compensated individuals right now pending further guidance on how to comply from the agency.  This provision was effective for new plan years after September 23, 2010 for non-grandfathered plans but is now on hold.  IRS had earlier issued Notice 2010-63 requesting public comments on how 105(h) could be implemented.

In the new Notice, the IRS asked for additional public comments on:

-          Whether the rate of employer contributions should be tested as a nondiscriminatory benefit

-          Whether application of nondiscrimination standards should be conducted on a geographic basis

-          What should a potential ‘safe harbor’ plan design look like

Comments are due by March 11, 2011 either in writing or by e-mail.  Please refer to this link  the Notice for the IRS text and details on how to submit comments.

DEP ISSUES MINE SUBSIDENCE and MINE SUBSIDENCE INSURANCE STUDY

On January 4, Department of Environmental Protection (DEP) issued a University of Pittsburgh report documenting mine subsidence from 2003-2008 over ten SW PA counties going as far as Indiana and Cambria Counties.  It showed 1,247 “effects” or mine subsidence incidents reported to DEP, a 14 percent increase over the previous five-year reporting period with most centered in Greene and Washington Counties.  There are only 58,000 policies in force out of an estimated one million homes potentially affected by mine subsidence.  Insurance agents are able to market mine subsidence insurance due to a 2002 law.  Details: 717/787-1323

REVENUE PICTURE IMPROVES AT BUDGET HALF-WAY MARK

Current doom and gloom over the Budget is tempered somewhat by revenue numbers which have picked up slightly over projections.  January 3, 2011 Revenue Department numbers for December showed a 1.7 percent year-to-date collection over projections.  This marks the half-way point in the state’s fiscal year with $11.5 billion collected so far.  This is the first time since 2007 that half-year receipts exceeded estimates but falls short of the needed $28 billion or so needed to balance the Budget for this FY.  Corporate taxes for December were above estimate by 8.1%; Sales tax was 4.9% over estimate; Personal Income Tax for December was 12.2% over estimate. Other taxing categories: Inheritance taxes were over estimate but real estate transfer tax collections continued to be below projections year to date despite a slight increase over estimate in December.

REGULATORY UPDATE

  • The PA Insurance Department has increased the Accident Surcharge Dollar threshold to $1,450.00 per Notice 2011-01. This threshold is revised at least once every three years.  The old cap of $1,350.00 was effective July 1, 2008.  This means that effective July 1, 2011, an insurer will not by law penalize their policyholders by cancelling or imposing a surcharge on a personal automobile policy where an accident has occurred with damages less than $1,450.00.
  • The PA Health Care Cost Containment Council (PHC4) is meeting January 13. Details: 717/232-6787
  • The PA Bulletin for January 1, 2011 (Vol. 41, No. 1) Part II contains an index of 2010 Notices issued by the Insurance Department, Banking Department, and other state agencies sorted by topic.
  • PA Department of Transportation issued a correction to a regulation previously issued October 9 relevant to denial of a driver’s license due to medical, vision, and mental standards.  Details: www.pabulletin.com

WINTER DRIVING HOME REMEDIES (Courtesy of PA Moving & Storage Associates)

- Keep your headlights clear with car wax Just wipe ordinary car wax on your

headlights. It contains special water repellents that will prevent that messy mixture

from accumulating on your lights – lasts 6 weeks.

- Squeak-proof your wipers with rubbing alcohol Wipe wipers with a cloth

saturated with rubbing alcohol or ammonia. This one trick can make badly streaking

& squeaking wipers change to near perfect silence & clarity.

- Ice-proof your windows with vinegar Frost on its way? Just fill a spray bottle with three

parts vinegar to one part water and spritz it on all your windows at night. In the

morning, they’ll be clear of icy mess. Vinegar contains acetic acid, which raises the

melting point of water—preventing water from freezing!

- De-ice your lock in seconds with hand sanitizer Just put some hand sanitizer gel on

the key & the lock and the problem is solved!

CORRECTION: Leg Reg Review for December 29, 2010 contained an inaccuracy regarding the Top 25 Fastest Growing Independent Insurance Agencies in the United States.  The substance of the article was correct. Keystone Insurors Group won that distinction of being second from 2008-2009 but the citation was wrong.  The correct citation should have been Insurance Journal National Region edition for December 6, 2010.