GPAHU – Supporting Quality Healthcare Solutions for All Pennsylvanians

Archive for June, 2011

LEG REG REVIEW 2011, 22d Issue June 27, 2011

Jun 29

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.

FAIR SHARE ACT DOMINATES INSURANCE, BUSINESS AGENDA

On June 21, the PA Senate sent Senate Bill 1131 on to the House, which, if it concurs, paves the way for a Corbett signing.  The legislation had been amended in the Senate Judiciary Committee to expand exemptions to comparative negligence.  This amendment was regarded by business and insurance advocates as a major watering down of the bill so Senator Jake Corman (R-Centre) proposed an amendment which was adopted 28-22 by the full Senate restoring the original language (Senator Dinniman was the only Democrat to vote for the Corman amendment.).  The original language provides exemptions for liquor liability and toxic substances.  Otherwise, SB 1131 replaces the doctrine of joint and several liability where any party could be potentially liable for 100% of a jury award to a standard of comparative negligence which allows for proportional payment based on the degree of responsibility.  House consideration is certain this coming week.  The final Senate vote was 32-18 and included three Democrats, Senators Boscola (Northampton), Dinniman (Chester), and Schwank (Berks).  Two Republicans broke ranks to vote no in the Senate, Senators Greenleaf (Montgomery) and Yaw (Lycoming.

Over 100 business groups led by the PA Chamber of Business & Industry sent a joint letter to House members expressing support for SB 1131.  PAHU and MASCPA sent a separate letter to the House.  Fathering the process, on June 23, the House Judiciary Committee voted for the bill and paved the way for a House vote on SB 1131 this week.

BILLS EN ROUTE TO GOVERNOR

  • Surplus lines legislation went to the Governor on June 26.  Senate Bills 1096 and 1097 (D. White-R-Indiana) breezed through the final step, a House vote, by 193-0.  A last minute threat to amend the bill with a number of health insurance mandated benefits was blocked when backers withdrew the amendments.

SB 1096 and SB 1097 bring PA into July compliance with the provision of last year’s federal Dodd-Frank Act dealing with Surplus & Excess insurance lines.  The legislation resolves the question of how surplus lines premium taxes are paid. This has long an issue for surplus lines licensees who write an account covering several states and have to pay the premium tax to each state even though the basis of the taxation is inconsistent.  The Non-Admitted and Reinsurance Act of 2010 was designed to reduce conflicts between states applying to a surplus lines insurance transaction which involves a business in more than one state.  It says that the business’ home state provides the basis for taxation.  It also stipulates that other states may not require a non-resident license for the surplus lines licensee in the business client’s home state.

  • On June 24, the House approved House Bill 440 (Mustio-R-Allegheny) 195-0 which authorizes insurers including the State Workers Insurance Fund (SWIF) to provide on a voluntary basis Workers ’ Compensation insurance to sole proprietors, partners of a partnership or members of a limited liability company.  It went to Governor Corbett for his signature June 26.

LOTS AND LOTS OF LEGISLATIVE ACTION

As the General Assembly gets ready to vote on a Budget and leave for its summer recess at the end of this week, the tempo of legislation has accelerated with these happenings:

  • A bill classifying a Group One carcinogen as an occupational disease for firefighters governed by the Workers’ Compensation Act is ready for final House action after a June 26 vote by the House Appropriations Committee to move the bill.  If approved, House Bill 797 (Farry-R-Bucks) will go to Governor Corbett for his signature.  The legislation says that a four year or more firefighter who can establish direct exposure to a Group One carcinogen as recognized by the International Agency for Research on Cancer is covered by WC if he/she passed a physical exam showing no cancer before the exposure occurred.  The time frame for filing Workers’ Compensation claims is 600 weeks after the last date of employment.
  • Flood disclosure history must be provided to lessees of residential property per Senate Bill 148 sponsored by Senator Stewart Greenleaf (R-Montgomery). It passed the House Rules Committee June 26 per a report from PA Legislative Service. (NOTE: The General Assembly Electronic Bill Room does not show any activity on the bill since January 12 when it was referred to the Senate Urban Affairs & Housing Committee.)
  • House-passed House Bill 424 (Godshall-R-Montgomery) is now in the Senate Banking & Insurance Committee.  It amends the Public Adjuster Law to strengthen regulatory oversight and allows for consumers to rescind a contract with a public adjuster.
  • Senate Bill 3 (D. White-R-Indiana) moved through the House Insurance Committee June 22.  It prohibits PPACA’s Health Insurance Exchanges from covering abortions; something which opponents say is already covered by the Patient Protection Affordable Care Act (PPACA).  The vote was 22-2 with one not voting. The two no votes were Representatives Josh Shapiro (Montgomery) and Matthew Smith (Allegheny).
  • UC LAW UDATE: The Act number was unknown at the time of printing Leg Reg Review Issue 21 of 2011 (June 20) for the Unemployment Compensation bill signed into law by Governor Corbett June 17.  Senate Bill 1030 is now Act 6 of 2011.
  • The Senate confirmed Julia Hearthway as Secretary of Labor & Industry. She oversees the state’s Worker’s Compensation and Unemployment Compensation systems.  Prior to her nomination by Governor Corbett, she led the Attorney General’s efforts to combat insurance fraud.
  • May’s collections continue the upward trend of tax revenues exceeding estimates.  Brought in was $1.8 billion which was $33.9 more than projected.  The $539 million year to date “surplus” is the matter of Budget discord as Democrats in both House and Senate try to attach those monies to reduced or eliminated programs.  Last week, some Democrats were projecting as much as $700 million that could be allocated by the General Assembly as “found money” to fund education or social services.  Republicans maintain that the money should be used to replenish the Rainy Fund rather than be spent.
  • Passing the Senate June 21 was Senate Bill 388 (Vance-R-Cumberland) amends the Dental Law providing for proof of professional liability insurance as a condition of licensure. SB 388 language calls for $1 million per occurrence, $3 million aggregate.

TRANSPORTATION COMMITTEES MOVE TWO DRIVER BILLS The House Transportation Committee moved Senate Bill 314 (Tomlinson-R-Bucks) affecting distracted [texting, hand-held devices] drivers on June 22 while the House Transportation Committee moved House Bill 9 (Watson-R-Bucks) to enhance the state’s Graduated Driver’s Licensing program for junior drivers.  Both bills are ready for a vote by the House (SB 314) and Senate (HB 9) which, if they occur, virtually guarantee passage by the start of the summer recess.

Tags: , , , , , , , ,

LEG REG REVIEW 2011, 21st Issue June 20, 2011

Jun 22

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.

SESSION DAYS in JUNE

House and Senate meet:         20, 21, 22, 23, 24, 27, 28, 29, 30

UC BILL SIGNED INTO LAW

Senate Bill 1030 (R-Gordner) was signed into law by Governor Tom Corbett in an effort to continue Unemployment Compensation benefits for approximately 45,000 unemployed Pennsylvanians.  After a House Republican backlash in favor of the more stringent reforms in House Bill 916 (Perry-R-York), the House finally amended SB 1030 with some of the Perry language and sent it back to the Senate.  The Senate concurred in an unusual Friday session and Governor Corbett signed the legislation into law on June 17.  The legislative gauntlet involved six different versions of the bill. The Governor’s Office projects a savings of $133 million a year.  SB 1030:

-          Allows for a 13-week extension of UC benefits

-          Slows benefit cost increases by capping increases in weekly benefits

-          Requires tapping into larger severance packages before using the UC system

-          Allows for employers to share work with reduced hours in order to stave off a layoff and allows for pro rata UC benefits.

SENATE VOTES for SURPLUS LINES

The Senate approved SB 1096 and 1097 (D. White-R-Indiana) on June 15 to bring PA into July compliance with the provision of last year’s federal Dodd-Frank Act dealing with Surplus & Excess insurance lines.  Of core interest is how surplus lines premium taxes are paid. This has long an issue for surplus lines licensees who write an account covering several states and have to pay the premium tax to each state even though the basis of the taxation is inconsistent.  The Non-Admitted and Reinsurance Act of 2010 was designed to reduce conflicts between states applying to a surplus lines insurance transaction which involves a business in more than one state.  It says that the business’ home state provides the basis for taxation.  It also stipulates that other states may not require a non-resident license for the surplus lines licensee in the business client’s home state.  The House counterparts are House Bills 1599 and 1601 (Godshall-R-Montgomery) which passed the House Insurance Committee and are currently in the House Rules Committee.

BIG WEEK FOR TORT REFORM COMING UP

This may be the showdown week for advocates and detractors of the Fair Share Act after amendments to SB 1131 allowed it to move through the Senate Judiciary Committee, chaired by opponent Sen. Stewart Greenleaf (R-Montgomery).  The Fair Share Act (now SB 1131, originally Senate Bill 2) would replace the doctrine of joint and several liability where any party could be potentially liable for 100% of a jury award to a standard of comparative negligence which allows for proportional payment based on the degree of responsibility.  The amendment expands exemptions to comparative negligence and triggered a reaction that will seek to amend the bill back to its original form on the Senate floor. The House has already voted for the original version of the Fair Share Act (House Bill 1).  Passage is the Number One priority of both the business and insurance communities.

OTHER LEGISLATIVE NEWS

  • The House passed House Bill 424 (Godshall-R-Montgomery) to amend the Public Adjuster Law.  It strengthens regulatory oversight and allows for consumers to rescind a contract with a public adjuster.
  • Senate Bill 388 (Vance-R-Cumberland) amends the Dental Law providing for proof of professional liability insurance as a condition of licensure. SB 388 language calls for $1 million per occurrence, $3 million aggregate had second consideration by the Senate on June 14.  This means that it could be voted on by the Senate this week.
  • On June 14, the Senate Labor & Industry Committee approved House Bill 440 (Mustio-R-Allegheny) which authorizes insurers including the State Workers Insurance Fund (SWIF) to provide on a voluntary basis Workers ’ Compensation insurance to sole proprietors, partners of a partnership or members of a limited liability company.

BUDGET DELIBERATIONS

This week will likely see the Senate Republican version of the FY 2011-12 State Budget come to light, setting the stage for an eventual House decision on whether or not to concur as both chambers strive to meet the June 30 constitutional deadline.  Adding some fuel to the fire was a pronouncement by Revenue Secretary Dan Meuser that attempted to rebut claims that PA’s revenue in excess of projections should be called a surplus.  The Secretary said that the $539 million is not really a surplus since $260 million came from non-recurring revenue and that PA should stick to Governor Corbett’s original $27.3 billion Budget proposal instead of trying to use the “surplus” to increase spending past the Governor’s amount.

COMMITTEE WORK

  • On June 21 the House Health Committee convenes a hearing on managed care plans for Medical Assistance recipients.
  • Also on June 21, the House State Government Committee takes up Senate Bill 9 (Scarnati-R-Jefferson), a measure that denies most state benefits to individuals who cannot prove their citizenship or eligibility.
  • Busy day: On June 21 the House Judiciary Committee considers House Bill 1620 (Grell-R-Cumberland) to amend the MCARE law to include assisted living residences and home health care agencies.
  • House Bill 511 (Hennessey-R-Chester) was re-referred to the House Appropriations Committee. It would prevent health insurers from requiring participation in mail-order pharmacies.

ANOTHER EXCHANGE HEARING

On June 23, the House Insurance Committee will hold its third hearing on PPACA Health Insurance Exchanges.  Testifying remotely this week will be Dr. Jon Kingsdale who will discuss the effectiveness of the Massachusetts Connector program. Earlier the committee heard testimony from the National Association of Insurance Commissioners (NAIC) and the Heritage Foundation, a conservative think tank

ROBERT WOODS JOHNSON SEE MEDICARE ADVANTAGE DROP

The Robert Woods Johnson Foundation and Health Affairs issued a report that says that Medicare Advantage plans are more expensive to the taxpayers than traditional Medicare. Enrollment in Medicare Advantage plans more than doubled from 2005 to 2010 to comprise about ¼ of all Medicare recipients, largely due to their added features, including lower premiums, reduced cost-sharing and additional benefits, such as dental or vision care. Because of these additional benefits, private MA health plans cost the federal government about 10 percent more than the traditional Medicare fee-for-service program, causing the federal government to look for ways to reduce the cost of these plans.  Under the Patient Protection Affordable Care Act (PPACA), federal payments to MA plans are to decrease over time, bringing them closer to matching traditional Medicare program costs. The Congressional Budget Office estimates that this change will cause MA plan enrollment in 2019 to drop to 9.1 million from a projected 13.9 million enrollment prior to PPACA’s passage.  Details: http://www.rwjf.org/coverage/product.jsp?id=72510&cid=XEM_749842

Tags: , , , , , , ,

LEG REG REVIEW 2011, 19th Issue June 6, 2011

Jun 9

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.

SESSION DAYS in JUNE

House and Senate meet:         6, 7. 8, 13, 14, 15, 20, 21, 22, 23, 24, 27, 28, 29, 30

BUDGET DOMINATES LEGISLATIVE MOOD

The Fiscal Year 2011-12 Budget will dominate much of the thinking in Harrisburg this week with the pre Memorial Day House passage of House Bill 1485 (Adolph-R-Delaware).  It is now the Senate’s role to review changes made by House Republicans to the original Corbett Budget proposal presented to the General Assembly March 8.  The House GOP restored some of the educational cuts envisioned by the Governor by paring back on the Department of Public Welfare budget.  Some issues to note:

  • The Governor is holding firm to his $27.3 spending figure.  Some in the Senate see a case for an increase from the Corbett cap.
  • Monies for this fiscal year continue to come in better than expected. The year-to-date income over expectations was $505 million as of April 30. May revenues put that figure even higher to $539.4 million.  What this means is that some interests whose budgets were cuts see a glimmer of hope that their funds will be restored out of this “found” money.  Others would like it to go for replenishing the Rainy Day Fund and keep to the $27.3 billion cap.
  • Marcellus Shale taxing becomes a wild card with Democrats seeing it as a way to restore cuts versus Republicans such as Senate President Pro Tempore Joe Scarnati (R-Jefferson) who signed a no tax pledge. He wants an impact fee on Marcellus Shale that would go to affected local communities.  Another approach surfaced from Senate Majority Leader Dominic Pileggi (R-Chester) who suggested that a Marcellus Shale tax should provide senior citizen property tax relief.
  • The Crop Insurance Premium Subsidy program was zeroed out by Corbett and not restored by House Republicans.  So, its fate is still in limbo.
  • Lost job slots at the Insurance Department have grown from nine in the original Corbett Budget proposal to 15 lost job slots.

HOUSE and SENATE INSURANCE COMMITTEES TO MEET

Both House and Senate committees governing insurance are meeting this week.

HOUSE INSURANCE COMMITTEE

The House Insurance Committee plans a June 8 meeting to consider two bills dealing with the Excess & Surplus Lines market (insurance coverage not available in the standard market).  This legislation is designed to bring Pennsylvania into compliance with the Federal Non-Admitted and Reinsurance Act of 2010.  Among other things, the national law is designed to reduce the conflicts between states applying to a surplus lines insurance transaction which involves a business in more than one state.  House Bill 1599 provides that the Commonwealth will not impose premium taxes on surplus lines transactions unless PA is the home state.  House Bill 1601 says that the home state has sole regulatory authority over a surplus line or independently procured transaction. Both bills are sponsored by Rep. Bob Godshall (R-Montgomery).

House Bill 1601 also:

-          Specifies that HB 1601 does not impact risk retention groups.

-          Loosens the ‘diligent search’ three declinations section of law to say that it is not needed if the surplus lines licensee notifies an ‘exempt commercial purchaser’ that standard coverage is available and the risk requests in writing that it wants SL coverage to be procured.

-          ‘Exempt commercial purchaser’ is any business meeting all of the following requirements: the business employs a qualified risk manager (defined in the bill) and has aggregate commercial P/C premiums over $100,000 in the preceding 12 months.  In addition, the exempt commercial purchaser must meet one of the following: net worth of over 20 million dollars; annual revenues above $50 million; more than 500 employees; a non-profit or public entity with an annual operating budget of at least $30 million; or a municipality with population over 50,000.

SENATE BANKING & INSURANCE COMMITTEE

The Senate Banking & Insurance Committee meets June 7 on four bills:

  • Senate Bill 388 (Vance-R-Cumberland) amends the Dental Law providing for proof of professional liability insurance as a condition of licensure.  Although there is an amendment that will be considered by the committee, SB 388 language calls for $1 million per occurrence, $3 million aggregate, or a self insurance affirmation by the dentist.
  • Senate Bill 896 (Stack-D-Phila.) provides for English as the controlling language regarding insurance materials.
  • Senate Bill 1096 and 1097 (D. White-R-Indiana) govern PA Surplus Lines law changes required by the Federal Non-Admitted & Reinsurance Act of 2010.

HB 1336 MOVES TO SENATE

Before leaving for the Memorial Day recess, the House approved House Bill 1336 (Godshall-R-Montgomery) 201-0, insurance legislation which did not go through either the Insurance or the Labor & Industry Committees. Rather, it went through the House Consumer Affairs Committee which Godshall chairs. It amends the law governing registration and regulation of home improvement contractors.

It appears to relax the requirement for insurance somewhat with a simple assertion by the contractor that there is coverage on a Department form. The form attests that the contractor is self insuring. For those supplying materials for residential contractors (“home improvement retailer”) such as Lowe’s, HB 1330 gives recourse to consumers to draw upon the home improvement retailer’s letter of credit if a complaint is filed. This letter of credit is in the amount of $100,000 per store location but would not exceed $2 million for a retailer with multiple store locations.  The retailers must also meet proof of insurance standards.

MARKET NEWS

  • According to the Insurance Research Council, in 2009 the national average of uninsured drivers was 13.8 percent.  Highest was Mississippi at 28% and New Mexico with 26%.  Pennsylvania had seven percent and New York was even lower at five percent.
  • At least 15 on the Insurance Journal Demotech list of Super Regional Insurers do business in PA including some such as: Brethren Mutual, Cumberland Mutual, Donegal Mutual, Grange Mutual Casualty Company, Harleysville; Merchants Mutual; Pennsylvania Lumbermens Mutual, Pennsylvania National; Utica Mutual; Westfield, etc. In addition, Hartford Steam & Boiler was reclassified by Demotech as a Coverage Specialist instead of 2010’s designation as a Super Regional Company
  • A study by Property Casualty Insurers Association of America (PCI) estimates that current Flood Insurance rates are only about one-third of the true risk in many parts of the U.S.   PCI notes that the National Flood Insurance Program (NFIP) is $17.75 billion in debt.  It supports HR 1309 which seeks to move NFIP to “more adequate rates”.  HR 1309 was approved by the House Financial Services Committee 54-0 in May. (Text at www.thomas.gov).

Tags: , , , , , , , ,