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LEG REG REVIEW 2010, 29th Issue November 15, 2010

Nov 15

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.

HOUSE TO COMPLETE LEGISLATIVE WORK

After an about face decision by House leadership, the PA House is convening to complete action on several bills before finally adjourning.  Since the Senate is not coming back, the House will have only a stripped down list of possibilities.  The one commanding the most attention is a House pension reform bill (HB 2497) that the Senate amended and sent back to the House for concurrence.  This may run onto a rocky road since some Democrats including the Governor believe that a Senate amendment to HB 2497 creating an independent fiscal office is unconstitutional.  Republicans on the other hand might be tempted to force a hold until the New Year, believing that they could craft a stronger reform bill as the majority party than they were able to with a Democratic majority now.  Another possible action is concurrence with a House bill that passed the Senate (HB 1196) delaying implementation of the new sprinkler mandate bill for a year.  Builders had unsuccessfully sought a court stay but were rebuffed.

Insurance bills to watch:

  • House Bill 1231 extends Workers’ Compensation coverage to classify cancer as a covered disease if contracted by firefighters.  There are provisions that exclude a firefighter if he/she is found to have been a smoker for two years and the cancer is tied to smoking as a cause.  It passed the House, passed the Senate and now is before the House Rules Committee
  • House Bill 664 is in the same position, needing only House concurrence in Senate amendments in order to go to the Governor for his signature.  This bill addresses Workers’ Compensation for sole proprietors and extends that coverage to partners and LLC officers.  Amended out of the bill was language specifically addressing loggers as covered by the sole proprietor Workers’ Compensation language.  One provision to note is defining ‘covered employee’ as individuals who have completed Community Emergency Response Team training and are dispatched to assist the first responders. 

HOUSE GOP SELECTS LEADERSHIP; DEMS THIS WEEK

House Republicans selected leadership for the 2011-12 legislative session.  They are:

-       Speaker nominee (to be voted on by the House formally next year) Sam Smith (Jefferson)

-       Majority Leader Mike Turzai (Allegheny)

-       Whip Stan Saylor (York)

-       Policy Committee Chair Dave Reed (R-Indiana)

One change in caucus leadership was in the Secretary post that was held by Rep. Jerry Stern (R-Blair) which will now be assumed by Rep. Mike Vereb from Montgomery County.

House Democrats will see significant changes and possibly a real transfer of power from eastern to western Pennsylvania since their Speaker of the House Keith McCall (Carbon) retired and Majority leader Todd Eachus (Luzerne) was defeated.

Rep. Frank Dermody (Allegheny) may be the new Minority Leader.  One contest to watch is for the position of Appropriations Committee Chair where incumbent Dwight Evans (Phila.) is being challenged by Westmoreland County’s Joe Markosek. Caucus Secretary Mark Cohen (Phila.) is being challenged by Rep. Dan Frankel (Allegheny).

SENATE TO ALSO SELECT LEADERS

Senate GOP leadership remains the same with President Pro Tempore Joe Scarnati and Majority Leader Dominic Pileggi (Delaware) continuing.  On the Democratic side, there is a contest between two powerful Senators, Jay Costa (Allegheny) and Michael Stack (Phila.), for the position of Minority Leader being vacated by Bob Mellow (Lackawanna) who retired.  If Costa wins, that starts off a contest for Democratic Chair of the Senate Appropriations Committee which he now heads.  If Stack wins, there will be a vacancy as Democratic Chair of the Banking & Insurance Committee. Watch Sen. Vincent Hughes (D-Phila.) as a contender.

CE REGULATION GOES TO IRRC

The long-awaited Insurance Department Continuing Education regulation goes to the Independent Regulatory Review Commission (IRRC) for final approval and a final opportunity for comment/approval from the House Insurance Committee and the Senate Banking & Insurance Committee.  As expected, the Department will require training for insurance producers selling long-term care insurance, LTC Partnership policies, and reminds producers selling flood insurance that they must comply with National Flood Insurance Program (NFIP) training requirements.

HEALTH LAW IMPLEMENTATION COMMITTEE TO MEET

The Rendell Administration’s Health Care Reform Implementation Advisory Committee meets November 17 in Harrisburg.  This entity was established by Executive Order to aid the Governor’s Office of Health Care Reform to implement provisions of the Patient Protection Affordable Care Act (PPACA).  Prior to the formal meeting, PAHU will address a subcommittee on the need to utilize insurance producers to market the new Exchanges mandated by PPACA.  PAHU will state that the law (Act 147) requires producers to be used.  Given the makeup of the Advisory Committee, agents may receive only a tepid reception.  It is unclear how much currency the Rendell Advisory Committee’s report will have with the incoming Corbett Administration.

In a related matter, the US Department of Health & Human Services approved a $2 million grant to the PA Insurance Department to prepare for the Exchange component of the PPACA. A second use of the grant is for consumer education and to assist consumers with appeals.  Although not mentioning it by name, this money may be possibly designed to achieve compliance with the insurance ombudsman requirement of PPACA.

REGULATORY UPDATE

  • The Independent Regulatory Review Commission (IRRC) approved Insurance regulation 11-243 Standards to define Insurers Deemed to be in Hazardous Financial Condition
  • IRRC disapproved regulations relative to funeral directors
  • A Insurance Department press release reminds drivers to beware of deer particularly between 7:00 p.m. and midnight.  It also reminds that a deer hitting the car will not result in auto insurance rate impact..
  • PA Compensation Rating Bureau (www.pcrb.com) announced a series of Manual changes relating to bus operators and temporary staffing.  These were approved by the Insurance Department and are effective December 1.

CORBETT ANNOUNCES TRANSITION HEADS

Pennsylvania Gov.-elect Tom Corbett announced the leaders of his transition team last Wednesday.  Co-chairs are Christine Toretti, chairman and CEO of S.W. Jack Drilling Co. in Indiana, Pa, Jack Barbour, CEO of Pittsburgh-based Buchanan Ingersoll & Rooney and Bill Sasso, chairman of the Phila. law firm Stradley Ronon.

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LEG REG REVIEW 2010, 19th Issue July 5

Jul 6

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.

THERE APPEARS TO BE A STATE BUDGET

Last week the General Assembly voted to pass a 28-plus billion dollar budget for the Commonwealth for the Fiscal Year beginning July 1.  After some last-minute maneuvering on a Senate Republican move to fully establish a fiscal office controlled by the legislature to give them an independent way to access state spending and revenue numbers, a compromise was reached that puts that decision down the road.  The votes were not unanimous with many Republicans voting against a budget that somewhat increases spending versus relying on actual revenue figures from the recently concluded fiscal year as a base.  An unresolved issue is that the new Budget assumes that Congress will pass legislation giving $850 million in additional Medicaid dollars to Pennsylvania.  The new Budget also does not factor in the court decision against the Rendell Administration and the General Assembly re last year’s depleting funds in the provider retention account, a fund that was supposed to help doctors with medical malpractice premiums as well as tapping into MCARE operating funds.  The court ruled that the $800 million action was illegal and that the money spent last year should be returned.

Some key developments are:

-       Increased education spending (a goal of Governor Rendell)

-       Reduced state discretionary program spending (less than the drastic elimination of many state program in the last fiscal year)

-       No new broad-based taxes

-       (Apparently) No move to tap the funds from the Insurance Fraud Prevention Authority (IFPA), the special anti-fraud effort funded by industry assessments enacted in the mid-1990s

On the revenue side for the first time in almost two years, the Department of Revenue reported that revenue for a month actually exceeded expectations.  June 2010 numbers showed gains in most areas totaling $58.3 million such as $2.8 million more than expected coming from Personal Income Tax, $4 million more than expected in liquor, beer, and cigarette taxes and $7.7 million more than anticipated in Sales Taxes.  Also reporting more than expected was the successful one-time tax amnesty program which netted $234.3 million and gambling because of the expansion to table games and resulting new licensing fees ($66 million).  Coming in short were Corporate Tax revenues, $25.5 million below estimate. The net for FY 2009-2010 was that revenue came in at $27.6 billion, or $1.176 billion short.

TORT ISSUE CENTERS ON AUTO INSURANCE

The Senate Appropriations Committee on July 1 moved House Bill 2246 (Tallman-R-York/Adams) and included a provision sought by the trial lawyers which allows attorneys to argue for damages before juries in automobile cases.  The IA&B and the Insurance Federation vigorously opposed the amendment. This is the first piece of legislation affecting automobile insurance in years seeing significant legislative action.

LEGISLATIVE ACTIONS

Before the July 4 recess, there were a number of legislative developments:

  • The Senate passed HB 1251 (Costa-D-Allegheny) which became a magnet for a number of insurance proposals including long-term care insurance customer eligibility triggers and appeals; extending PA’s mini-COBRA term to possibly capture federal funds should Congress restore the 65% subsidy on COBRA premiums; several life/annuity provisions.  It must go back to the House for concurrence.
  • Producer licensing exams is the subject of House Bill 2490 (Johnson-D-Phila.). It tries to capture information by race on the numbers failing the life/accident/health exam in order to see if there is demographic bias in the testing.  Along the way, the bill was amended re when this information would be collected and made giving this information a voluntary action.
  • The House disagreed with a Senate watering down of restrictions on texting and cell phone use.  House Bill 67 (Markosek-D-Westmoreland) will go to a House-Senate conference committee to try to resolve differences.

STATE PUSHES AHEAD WITH IMPLEMENTATION OF FEDERAL LAW

The Rendell Administration has moved ahead with implementation of the High Risk Pool provision of the Patient Protection Affordable Health Care Act without enabling legislation being passed by the General Assembly (SB 507 and HB 2514).  The June 1 application to HHS was approved July 1 and the state will receive federal support.  Amounts from the federal Government estimates vary from the more widely expected $160 million to a more recent and modest figure near $60 million.  The maximum number of medically uninsurable Pennsylvanians in the new program would be about 5,000 with others possibly being added to a waiting list pending available money to pay for the program.  The High Risk Pool is a temporary program which expires January 1, 2014 when medical underwriting and pre-existing conditions go away for all insurance plans per the new federal law.

The PA Association of Health Underwriters (PAHU) filed a complaint July 1 with the Attorney General against the Rendell Administration for ignoring the General Assembly’s responsibility to create new programs and in bypassing Act 147’s legal requirement that licensed insurance producers be used for marketing insurance. The PA Insurance Department is opting instead for an Internet application system with no agent involvement.  The insurer getting the contract to run the program has not been announced.

MORE FEDERAL NEWS…

  • The National Flood Insurance Program (NFIP) has another lifeline, this time extending the program until September 30 with a retroactive date to June 1.  On June 30 the US Senate approved a temporary reauthorization following an earlier House vote to do the same.
  • The Financial Regulation package has a new name. The Conference Report on the 2,323 page bill is now the Dodd-Frank Wall Street Reform & Consumer Protection Act (Conference Report 111-517).  Text and summary are available at www.thomas.gov. Among other things, it:

-       Establishes the Federal Insurance Office to identify regulatory gaps that could contribute to a crisis; monitors extent to which minorities might be underserved by not having sufficient access to insurance (beginning Section 501)Its authority does not extend to health insurance.

-       Enacting Surplus Lines market reforms by developing interstate standards for regulation of the Excess & Surplus Lines market (beginning Section 521)

-       Establishing the Bureau of Consumer Financial Protection (beginning in Section 1011)

NOTE: Some media have reported that the bill takes regulation of equity indexed annuities (which pegs the value of annuities to overall performance of S&P or Dow Jones etc. versus particular investment vehicles) away from the SEC and gives it to state regulators.  The actual text doing this in the bill was not found for this article.

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LEG REG REVIEW 2010, 18th Issue June 21

Jun 21

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.

HHS ISSUES RESTRICTIVE GRANDFATHER RULES

The Federal Government issued Rules on June 14 specifying how and if health plans can keep their grandfather status under the new health law.  It is very restrictive and has prompted a view that the intent was not to allow people to keep their health plan as promised but rather to force plans into non-compliance.  Some provisions where the grandfather is voided:

-       If you change to a different insurance company

-       If the co-pays increase 15% over medical inflation rate or $5 using a complex formula

-       If the employer changes the amount it contributes towards the premium

-       If benefits decrease, for example if mental health coverage was reduced to eliminate depression treatment

In addition, the burden is on the employer to justify its’ belief that its’ plan is grandfathered.  Compliance details are sketchy but there will be three agencies at work, IRS, HHS, and Department of Labor.  Details: http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html or www.pahu.org

The above links also provide summaries of what is covered by a grandfather, i.e. from what parts of the new law is a business sheltered.  Employers must notify enrollees that the plan is grandfathered as described below but when this notification must be made is uncertain.

“This [group health plan or health insurance issuer] believes this [plan or coverage] is a ‘grandfathered health plan’ under the Patient Protection and Affordable Care Act (the Affordable Care Act). Being a grandfathered health plan means that your [plan or policy] does not include certain consumer protections of the Affordable Care Act. Questions regarding which protections apply and which protections do not apply to a grandfathered health plan and what might cause a plan to change from grandfathered health plan status can be directed to the plan administrator at [insert contact information].”

It continues: “[For ERISA plans, insert: You may also contact the Employee Benefits Security Administration, U.S. Department of Labor at 1-866-444-3272 or www.dol.gov/ebsa.] [For individual market policies and nonfederal governmental plans, insert: You may also contact the U.S. Department of Health and Human Services at www.healthreform.gov.]”

MEDICAL LOSS RATIO ANALYSIS DEADLINE LOOMS

July 1 is the deadline for the NAIC to present its analysis to HHS regarding the methodology that would establish the mandatory 80 or 85 percent medical loss ratios established by the Federal law.  Even though the legislation has December 31, 2010 as the effective date, HHS pressed NAIC to report by June 1 (the law was signed by President Obama on March 23).  The insurance commissioners asked for another month.  According to some news reports, the NAIC has requested a three-year transition in certain states where the market could be destabilized.  The actual text of the letter was not available at time of press.

COMMITTEES REMAIN ACTIVE IN JUNE

Both the House and Senate committees dealing with insurance issues continue their busy pace in June.

The Senate Banking & Insurance Committee plans a June 22 hearing on Senator Stewart Greenleaf’s (R-Montgomery) Senate Bill 1199 regarding Lyme disease education, prevention and treatment.  On the House side, the Insurance Committee meets June 22 to consider these bills:

-       HB 2370 (Costa-D-Allegheny) relative to updating the Public Adjuster Act

-       HB 2490 (Johnson-D-Phila.) requires that the Insurance Department and its licensing vendor Prometric do a demographic and racial study of those taking the life/accident/health exam (LAH) for the first time to see if the test itself is causing a high fail rate among certain groups.  The bill does not apply to Property/Casualty tests and would be triggered if the fail rate exceeded 70 percent of all first-time test takers in LAH.

-       HB 2106 (Taylor-D-Montgomery) implements the Stimulus package law to establish a PA medical records data base called PA Health Information Exchange (PHIX), not to be confused with the health insurance exchanges coming in 2014.  This bill had been passed over by the committee last week.

Other bills which may be looked at include HB 1911 providing for oncology Rx drug coverage even if use is not approved by FDA and HB 2420 providing for the restrictive use of senior citizen specific designations in the sale of life insurance and annuities.

DEPARTMENT ISSUES FEE INCREASE TO INSURERS

Per the June 19 PA Bulletin, the Insurance Department is raising fees charged to insurers for financial examinations (6.5% increase) and market conduct exams (2.5%).  Details; www.pabulletin.com

GOVERNOR’S IMPLEMENTATION COMMITTEE APPOINTED

Governor Rendell’s Health Care Reform Implementation Advisory Committee will meet June 30.  It was created by the Governor via Executive Order to provide feedback regarding the implementation of the Patient Protection Affordable Health Care Act (new federal health overhaul law).  It is not a decision-making body.  That rests with another group of government officials.  Appointed by the Governor on June 15 were 30 individuals including:

-       Ten doctors or those from the medical/hospital community

-       Two union members

-       Two businesspeople from Meadville and York

-       Three Democratic legislators, Representatives Josh Shapiro and Rick Taylor from Montgomery County, and House Insurance Committee Chairman Tony DeLuca from Allegheny County

-       Four insurers (two of which have hospital systems)

-       Six from health reform advocacy and wellness groups

-       One from the Governor’s Council on Disabilities

-       One consumer

-       Chairperson Rosemarie Grecco, former head of the Governor’s Health Care Reform Office

LEGISLATIVE ACTIONS

  • The House passed House Bill 1865 (Burns-D-Cambria) requiring health insurers to give equal consideration of payment for oral or intravenous chemo treatment for cancer patients.
  • Governor Ed Rendell signed House Bill 1641 (Gingrich-R-Lebanon) into law as Act 32 of 2010. It requires that a circulating nurse be present in hospital operating venues when anesthesia is used.

In Congress, House Republicans failed to pass a procedural motion 187-230 that would have paved the way for an up or down vote on repealing the Patient Protection Affordable Care Act. Two PA Democrats, Reps. Tim Holden from central PA and Jason Altmire from Pittsburgh, voted yes with Republicans (for the motion that would have led to a repeal vote).

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LEG REG REVIEW 2010, 16th Issue June 7

Jun 8

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.

BUDGET TIME IN HARRISBURG
Last week the Governor and leaders of the General Assembly met for the first time to formally begin the negotiations process which will result in the Budget for the fiscal year beginning July 1, 2010.  The outlook for completion of the process by the constitutional requirement of June 30 is unlikely given that:

  • The budget has not been on time for the last seven years.
  • The Governor vowed again to fight for an increase in government spending for education.  Education spending increases have been the theme of Governor Rendell’s tenure in office.
  • Although the PA House passed Gov. Rendell’s Budget proposal on a party-line vote, Senate Republicans pronounced it as dead on arrival, preferring to hold the line of spending at $27.5 billion instead of the $29 billion-plus sought by the Governor.
  • Worse yet, budgetary assumptions included in Rendell’s Budget are flawed given:

-    The $450 million-plus assumed for highways from tolling I-80 was knocked out by the Federal Government denial of  the request
-    $850 million in welfare monies must be approved by the US Congress, something not happening yet
-    $801 million in this fiscal year budget struck down by the courts because of a ruling that MCARE and the MCARE Provider Retention Account money was illegally diverted to the General Fund.

  • Money has to be found for THIS fiscal year.  The budget shortfall (revenues coming in lower than expected) means that at least $1.2 billion must be found between now and June 30 to close the books on this year.  In April, collections were $390 million lower than expected, dismaying because April is supposed to be one of the most productive tax months.  As of April 30, collections to date were $22.8 billion with only two months left to go in this budget cycle.
  • The state must reimburse $15 million to the Federal Government that was overpaid to the PA Department of Public Welfare. Another $6.5 million claim is pending.

Another budgetary development of interest to insurance producers, accountants, realtors and other professional groups is that Governor Rendell backed off from his proposal to impose the state sales tax on additional professional services.

DEPARTMENT SUBMITS RISK POOL PROPOSAL TO HHS
On June 1, the PA Insurance Department submitted a proposal to HHS to run the state’s Risk Pool for uninsured and medically uninsurable adults.  It envisions $160 million spent on just over 5,000 individuals between now and 2014.  It does not reference any role for agents pro or con in the marketing and outreach component except for lumping agents, insurers and legislators as one outreach category.  It does not specify that marketing shall be compliant with Act 147, the Producer Licensing Law.  The Pennsylvania Association of Health Underwriters (PAHU) is considering the filing of a complaint to the Attorney General and is reminding the General Assembly that authorizing legislation (SB 507 and HB 2514) appears to be side-stepped by the Rendell Administration.

CONKLIN IS LT. GOVERNOR NOMINEE
Rep. Scott Conklin (D-Centre) is the official running mate for Democratic Governor candidate Dan Onorato.  He had led in the primary by just a few thousand votes but his opponent waived off a recount because the numbers, although close, were insurmountable.

FEDERAL DATES AND DEADLINES

  • The National Flood Insurance Program (NFIP) has for the forth time since October failed to be re-authorized by the US Congress.  This means that no more flood insurance policies may be issued but claims for existing policies will continue to be paid.  According to NFIP’s May 28 Memorandum, “New policies for which the application was completed on or before May 31 and application and premium were received within ten days of the application date, will be issued for coverage and will become effective on the requested effective date, in accordance with applicable waiting period rules.”
  • May 31 was the deadline for applying for the 65% Federal COBRA subsidy (applying to PA mini-COBRA as well).  Congress did not authorize an extension of the subsidy past that date although doing so was on the congressional agenda.  The House passed HR 4213 without the COBRA extension for fear of losing votes on the larger bill.
  • On June 10, some seniors will begin receiving tax-exempt checks for $250.00 from the Federal Government as part of the Patient Protection and Affordable Care Act’s effort to close the so-called ‘Donut Hole’. According to the Centers for Medicare and Medicaid Services (CMS) June 2, just seniors entering the Donut Hole will receive the checks, not all seniors.  No paperwork or application forms are required but HHS cautioned seniors to beware of suspected fraud or scams and to call 1(800)633-4227 if such is suspected.

UPCOMING INSURANCE MEETINGS
Both House and Senate plan insurance meetings this coming week.

The House Insurance Committee will hold a June 8 informational hearing on self-referrals (HB 2521 and HB 2522) featuring presenters from the PA Ambulatory Surgery Association, the PA Medical Society, Thomas Jefferson University Hospital and others.  The committee also meets on June 8 to consider:
-    HB 2522 (DeLuca-D-Allegheny) re improper referrals by health providers where there is a financial conflict of interest
-    HB 2521 (DeLuca) provides for more billing transparency and defines unprofessional conduct for health care providers that order but do not supervise or perform a component of anatomic pathology who fail to disclose certain information on its bills
-    HB 2106 (Taylor-D-Montgomery) creates the PA Health Information Exchange (not to be confused with the Exchanges coming in 2014 as part of the new health care law) to promote electronic data exchanges between health care providers.

The Senate Banking & Insurance Committee also meets June 8 on five bills: SB 1181 regarding immunity from liability; SB 1222 prohibiting insurers from charging fees for non-covered insurance services (amendment limiting to dental services); SB 1334 provides for service contracts as being distinct from the business of insurance; HB 838 regarding PA’s dependents to age 30 law; and HB 1251 providing for appealing an insurer’s determination when the benefit trigger is not met, for prompt payment of clean claims (amendment extending mini-COBRA to 15 months from the current nine)

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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, 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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LEG REG REVIEW 2010, 11th Issue April 26

Apr 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.

AGE 26 COMES EARLY

National carriers (Blue Cross Blue Shield Association, United, WellPoint, Aetna) have decided to implement the age 26 requirement contained within the new Federal health reform law June 1 instead of the legal date of September 23.  Doing so allows young adults just out of school to continue on their parents’ policy instead of forcing a gap in coverage over the summer and significant administrative costs regarding termination, reinstatement, and student verification.  Pennsylvania lawmakers will have to review PA’s Act 4 (SB 189) which extends dependent coverage through 29 for unmarried young adults.  The Federal requirement is not optional like Act 4 and includes married persons to be dependents on their parents’ policies.

INSURANCE COMMITTEE MOVES THREE

On April 20 the House Insurance Committee considered and moved three bills:

-       HB 2392 (Shapiro-D-Montgomery) extends mini-COBRA from nine to 15 months to match the Federal subsidy period.  After the subsidy expires, mini-COBRA reverts to the current nine months.

-       HB 2368 (Harhai-D-Fayette) regarding company solvency measures

-       HB 1865 (Burns-D-Cambria) requires equal insurer acceptance of oral versus intravenous cancer chemotherapy if the plan covers chemo

WHEN IT RAINS, IT FLOODS

Or at least it seems that way based on a spate of updates regarding the National Flood Insurance Program.

  • With the latest short-term extension of the program, what happens to those caught in the period when there was no program?  According to an April 20 memo from NFIP, the grace period for those policies whose renewal offers were not sent during the March 29 through April 15 pause in NFIP authorization will be extended by the number of days the program was inoperative ( 18 days).
  • NFIP announced October 1, 2010 premium changes averaging four percent although more in certain zones such as Post FIRM V Zones going up 9%. (www.nfipservice.com/stakeholder/pdf/bulletin/W-10046.txt )
  • Mark Davey, chairman of Fidelity National Insurance Company representing the Write Your Own Coalition testified before a subcommittee of the House Financial Services Committee April 21 to say that converting Flood Insurance to a multi-peril product including wind per HR 1264 would be harmful because it would mean direct Federal competition with the private sector costing 41,775 jobs in the insurance industry and a loss of $26.9 billion in lost premiums.  It also would result in significant amounts of unfunded liability (claims but no money to pay for it).  He also took exception to the prevailing idea that there is no wind coverage, pointing to plans in 23 coastal states and DC.

SPECIAL SESSION FOR MAY

Resulting from the US government decision to deny Pennsylvania’s request to toll I-80 and a resulting $450 million hole in the FY 2010-2011 Budget, Governor Rendell has called for a Special Session of the General Assembly possibly as early as May 4 to look at transportation funding.

POLITICS….

  • Ending a thirty year career in the House at week’s end is Rep. Mario Civera (R-Delaware) who was elected to Delaware County Council in November.  Originally he had wanted to stay in Harrisburg until after the May primary.  Civera had held the position of Minority Appropriations Chairman until relinquishing that post after his election.
  • PoliticsPA.com reports that the congressional seat held by the late John Murtha is exceedingly close.  A Public Policy Poll showed Republican Tim Burns ahead of Democrat Mark Critz 44 to 41 percent while Republican pollster John McLaughlin said that the Democrat was ahead by one percentage point 40-39.  Both polls are within a margin or error and the race attracts national attention because it is seen as a referendum on the Obama health care program strongly supported by Murtha in this conservative Democratic district.
  • Liberal groups Healthcare for America Now, Democracy Rising, SIEU (union) and Rock the Capitol.org held a rally in Harrisburg calling on Attorney General Corbett to resign because of his joining a multi-state lawsuit against the unfunded mandates of the new health reform law.

DEPARTMENT ISSUES EXPORT LIST FOR SURPLUS LINES

On April 24 the PA Bulletin (www.pabulletin.com) published a list of types of coverage where surplus lines licensees do not have to meet the declination requirements (“diligent search”) before seeking coverage in the Surplus & Excess Lines market.  Examples are taxicab liability, animal rides, hunting clubs, hazardous waste haulers (physical damage only), etc.

TWO BANKING DEPARTMENT REGULATIONS TO BE REVIEWED

The Independent Regulatory Review Commission (IRRC) will meet May 13 in Harrisburg to consider two Banking Department regulations: Regulation 3-46 on General Provisions Hearings & Conferences and Regulation 3-47 regarding the Banking Department’s Mortgage Licensee (mortgage loan brokers, loan originators) required Continuing Education.

OTHER REGULATORY UPDATES

  • A list of Qualified Unlicensed Reinsurers is found in the March 20 PA Bulletin.
  • Patient Safety Authority (medical malpractice) will meet April 27 in Harrisburg.
  • The Westchester Fire Insurance Company, a stock fire insurance company seeks to merge with ACE.

MEDICAL MALPRACTICE DATA RELEASED

According to the Administrative Office of the Courts, medical malpractice filings continued to decline since the passage of legislation in 2002.  Plaintiffs filed 1,533 medical malpractice lawsuits in 2009, a 4.5% decrease from 2008 and a 43.9% drop from 2000-2002 averages.  The decline was not uniform however with the following counties showing increases in filing from 2002 to 2009: Bedford, Berks, Bucks, Butler, Columbia/Montour, Jefferson, Lancaster, Lawrence, Luzerne, Mercer, Montgomery, Washington and Wayne.  Note that in some rural cases the percentage change is not significant since it is based on a small 2002 number.  The county with the biggest increase and number was Montgomery with a 370% increase while the biggest decreases in numbers versus percentages were seen in Allegheny (-33.6%), Philadelphia (-59.2%), and Lackawanna (-49.2%)

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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LEG REG REVIEW 2010, 10th Issue April 19

Apr 20

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.

HEALTH UNDERWRITERS DAY ON HILL AGENDA

The April 20 PAHU Day on the Hill will involve almost 100 brokers from across the state focusing on:

-       Agents must be the ones legally allowed to market the new Exchanges created by Federal law.  The new law requires that the states create their own Exchanges instead of having a Federal Exchange.  PAHU makes the case that Act 147, the Producer Licensing Law, applies to the Exchanges.

-       Risk Pool legislation must be in place in PA by July 2010. Again, PAHU believes this risk pool to be an insurance product and thus marketed by agents.

-       PAHU disagrees with the rationale for establishing a Consumer Advocate for Health Insurance, preferring instead that the Insurance Department be given more resources to carry out its mission of protecting consumers instead of having a new entity created.

-       The Governor’s proposal to impose a state sales tax on “all other professional services” is seen by agents as a threat to their competitiveness as well as imposing additional costs re employee benefits at a time when consumers and businesses are most vulnerable to cost issues

The PAHU Day on the Hill also includes two Briefings on the new Federal law and what it means to Pennsylvania.  These are open to House members and House staff.  A Senate Briefing will be scheduled later.

RISK POOL BILL MOVES

On April 14 the Senate Banking & Insurance Committee unanimously moved Senate Bill 507 (Folmer-R-Lebanon).  Although the legislation was crafted before the new Federal health law was enacted, it is felt to be the Senate Republicans’ attempt to comply with a federal requirement that PA have a risk pool by July 2010 as 35 other states do.  The Risk Pool is designed to handle insurance for those individuals who are medically uninsurable (no one from within a group can qualify) between 2010 and 2014 when medical underwriting may no longer take place.  SB 507 establishes a Risk Pool Board which will award a state-wide contract to one insurer instead of the regional approach used by adultBasic and CHIP.  Agents may receive a referral fee but the system is not entirely clear as to agent compensation will work.

Text is available at www.legis.state.pa.us.

STATE BUDGET SETBACK

On April 15 the Commonwealth Court dealt the Rendell Administration a serious budgetary blow when it ruled that use of MCARE monies for the 2009-2010 State Budget was illegal.  As part of the Budget deal from 2009 for the fiscal year ending June 30, 2010, the General Assembly depleted the MCARE abatement fund (provider retention account) which had never been reauthorized to help doctors with their medical malpractice assessments.  As a result, the abatement fund could not disburse any aid to doctors but was still collecting revenues.  The total which the Court directed to be returned to MCARE from the General Fund exceeded $800 million dollars.  Governor Rendell said that the state will appeal.  The Court ruling was in response to a petition filed by PA Medical Society and the PA Hospital and Healthsystem Association.

COMMITTEE MEETINGS THIS WEEK

  • On April 20 the House Insurance Committee is meeting to consider two bills:

-       HB 2392 to extend mini-COBRA benefits from nine to 15 months and make them retroactive

-       HB 1865 regarding oncology benefits

  • Also on April 20, the Senate Banking & Insurance Committee plans to discuss the issue of pay day lending
  • A third April 20 meeting will be held by the Senate Public Health & Welfare Committee on SB 291 (HIV testing consent and confidentiality), SB 620 (stillborn birth certificates) and HB 1641 (requiring RNs to be in the operating room). It will also decide on the nomination of Harriet Dichter as Governor Rendell’s new Secretary of DPW.

FEDS OPEN COMMENT PERIOD FOR MLRs

The US Department of Health & Human Services (HHS) has opened up a comment period on the new Federal Medical Loss Ratio (MLR) which says that large groups must have 85% of premium dollars spent on claims while smaller groups of fewer than 100 employees must have an 80% MLR.  HHS is working with the NAIC to develop criteria to determine what should be in the 80/85 percent and what should be considered overhead.  While the purpose is to ensure that medical claims receive the focus (versus profits or expenses), insurance groups have expressed concern that too restrictive of a MLR means that smaller insurers will be squeezed out of the marketplace and that anti-fraud efforts will take a hit if classified as administrative versus claims-related.

Comments must be received by HHS by May 14, 2010 via:

-       Federal eRulemaking Portal:  http://www.regulations.gov

-       Mail to Department of Health & human Services, DHHS-2010-MLR, Hubert H. Humphrey Building, Room 445-G, 200 Independence Avenue, SW, Washington, DC 20201

Questions: HHS Sharon Arnold 202/690-5480 or Dept. of Labor Amy Turner 202/693-8335

FEDERAL UPDATE

  • The President signed another stop-gap piece of legislation which gave the National Flood Insurance Program (NFIP) a short lifeline.
  • The PA House Congressional Democratic delegation has awarded Pennsylvania Rep. Patrick Murphy from Bucks County the seat on the Appropriations Committee that was held by the late John Murtha.  Murphy beat out Rep. Chris Carney for that spot.

POLITICS….

Democratic House candidates had sought a federal investigation of nominating petitions for Republicans running for state legislative seats from Delaware County but were rebuffed by the US District Attorney’s Office in Philadelphia which said that petition challenges were a state concern.

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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LEG REG REVIEW 2010, 9th Issue April 12

Apr 12

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.

GENERAL ASSEMBLY SET TO RETURN

This week the Senate will be back in session and the House will return next week.  Both House and Senate have a considerable backlog of business items to address.  Some pressing issues:

  • Replacement of Senator Jane Orie (R-Allegheny) as Majority Whip.  She stepped down from that position because of an indictment for allegedly using taxpayer-funded staff for political campaign purposes including her sister’s successful campaign for a judicial race last fall. The decision to leave her Whip position does not affect her position as elected Senator.
  • Senate Budget consideration now that the House passed HB 2279, Governor Rendell’s proposed FY 2010-2011 Budget.
  • HB 2279 and whatever budget Senate Republicans come up with are affected by the Federal Government’s decision to not permit the tolling of I-80.  This creates a $450 million hole in the Budget because Governor Rendell assumed it as a given in crafting his transportation budget.  The Governor’s response to the disapproval was to say that roads, bridges etc. would not be maintained and he called for a special session of the General Assembly to focus on transportation revenues including taxes.
  • The Senate Public Health & Welfare Committee announced that it is taking up Governor Rendell’s nomination of Harriet Dichter as Secretary of the PA Department of Public Welfare on April 20.

CREDIT INSURANCE LEGISLATION SIGNED INTO LAW

House Bill 526 (DeLuca-D-Allegheny) has been signed into law by Governor Rendell as Act 17 of 2010.  It governs the reimbursement of credit life premiums (unearned premiums) if a consumer loan is paid off early.  It was actively supported by the PA Financial Services Association.

HEALTH LAW IMPACT BEGINS TO BE FELT

The impact of the new federal health care legislation is beginning to be felt.  Among other things:

-       Businesses may qualify for a 2010 tax credit on health insurance premiums based on their size and average salary.  IRS guidance has not been released.  One resource would be a CPA. The other is the National Association of Health Underwriters (NAHU), which has produced implementation materials.  www.nahu.org

-       In July PA will have a risk pool for those individuals now medically uninsurable although PA legislation has not been developed yet.  HHS Secretary Sibelius sent a letter to Governors and Insurance Commissioners on April 2 spelling out some broad brush guidelines.  Among other things, the letter said that eligible individuals must be a US citizen or lawfully in the US, not have been covered for the previous six months, and have a pre-existing condition.  The benefits must have an actuarial value of at least 65 percent of total allowed costs, an out of pocket limit no greater than the amount allowable for high-deductible health plans ($5,950.00 for an individual), and no pre-existing condition exclusions.  Premiums may not exceed 100% of the standard group rate and not have age rating factor of greater than 4 to 1. Businesses or individuals within a group are not included in the risk pool

-       In July PA will have developed an insurance portal to help consumers know what their insurance options are.

-       Retroactive to January 1, larger employers that subsidize their retired employees’ Medicare Part D ‘Donut Hole’ are no longer able to deduct that business expense.  One Pennsylvania company, Lancaster-based Armstrong World Industries, said April 7 that they sustained a $22 million first quarter charge as a result of the new health care law. This charge will pose financial strains on many large employers who provide this benefit to retirees since the law made it retroactive to January 1 instead of proactively where the businesses could have at least budgeted for the financial hit.

-       The PA Association of Health Underwriters (PAHU) has a Day on the Hill in Harrisburg April 20 to advocate that insurance agents be required in the sale, solicitation, and negotiation of insurance contracts in the new Exchange.  There is no charge for participating and the Greater Philadelphia Association of Health Underwriters has even chartered a bus.  Details: 717/232-0022

NOTE: PHILLIPS ASSOCIATES has maintained a busy schedule in explaining the new Federal health law for both formal Continuing Education for agents or as a presenter to agents and clients.  If interested, please contact Vince Phillips at 717/728-1217, 717/346-1063 or 717/732-7255 or via xenobun@aol.com

HEALTH LAWSUITS PLOW UNCERTAIN GROUND

PA Attorney General Tom Corbett joined other state attorneys general in contesting the constitutional validity of the unfunded mandate to the states contained within the Federal health care law.  His joining the lawsuit brought quick response by Democrats. Governor Rendell countered with a March 26 letter to United States Attorney General Eric Holder saying that “on behalf of the citizens” he and three other Governors opposed the lawsuit and favored the Patient Protection and Affordable Health Care Act as being “the most important reform of our health care system in decades.”  In the General Assembly, House Appropriations Committee Chairman Dwight Evans (D-Phila.) suggested that the AG’s lawsuit was a waste of state dollars and implied that the Republican Attorney General might pay a budgetary price in FY 2010-2011 for his action.  Republican Corbett is running for Governor.  As of April 7, five additional states joined the 13 state Attorneys General lawsuits and GOP Governors in AZ, MN, and NV went around their Democratic Attorneys General to join the lawsuit.

FLOOD INSURANCE IS NOT REAUTHROIZED

Due to Congress’ inaction, the National Flood Insurance Program (NFIP) was not re-authorized by the end of March, marking the second time in a month where Congress has prompted a de facto suspension of federal flood insurance programs. According to a statement issued March 28 by the National Association of Insurance commissioners (NAIC), NFIP may not issue new policies, change coverage or renew policies.  This will fortunately not affect payment of flood claims for policyholders, especially important in spring floods season.  Congress is set to return April 12.

UPCOMING SESSION DAYS

Session days for the House are:

April 19, 20, 21, 26, 27, 28

May 3, 4, 5, 24, 25, 26

June 7, 8, 9, 14, 15, 16, 21-30

Session days for the Senate are:

April 12, 13, 14, 19, 20, 21

May 3, 4, 5, 24, 25, 26

June 7, 8, 9, 14, 15, 16, 21, 22, 23, 28, 29, 30

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LEG REG REVIEW 2009, 32nd Issue October 5

Oct 5

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.

BUDGET REVENUE BILL SUMMARY

Following are a number of provisions contained within House Bill 1531, a taxation bill passed by the House late October 2, 2009  (Friday) on a 103-98 vote.  Democrats except for Reps. Petrarca (Westmoreland) and Pallone (Westmoreland) voted yes.  Republicans except for Rep. O’Brien (Phila.) voted no.  Democratic leaders called the vote a step forward and showed a willingness to listen to members who were deeply upset over taxing arts community events and small games of chance.  The vote appears to show this since previous critics such as Rep. Kotik (Allegheny) and Solobay (Washington) were on board for this vote.

Senate Republicans said that the vote was extremely disappointing and that the House “chose to push legislation which does not have sufficient support to pass in the Senate”.  Governor Rendell, in an October 3 press conference, called it a step backwards but said that PA is still “very, very close to having a budget.”  In a separate development, on October 2, Republican Appropriations Committee Chairman Mario Civera (Delaware) moved to discharge (release) HB 1943 from the Appropriations Committee as the GOP budget bill seeks a House vote.

  • Tax on Managed Care Organizations with Medicaid contracts will pay 59 mills per one dollar in insurance premium in addition to the standard two-percent premium tax.  If HHS says no to this arrangement, Department of Public Welfare reserves the right to cancel MCO contracts
  • MCARE abatement fund (provider retention account) eliminated i.e. its monies put into General Fund
  • Helicopter Parts or repairs now exempt from sales tax
  • Business income tax rates for 2009 will be 8.5 x property factor, 8.5 times the payroll factor, 83 x sales factor
  • Business income tax rates after 2009 will be 5 x property factor, 5 x payroll factor, and 90 x sales factor
  • Net loss deduction for 2009 at 15% taxable income or $3 million; Net loss deduction for 2010 at 20% taxable income or $3 million
  • New phase-out date for Capital Stock & Franchise Tax would be 2013
  • Cigarette taxes increase to eight cents per cigarette from 6.75 cents; Smokeless tobacco taxed at 30% of purchase price from manufacturer to seller of smokeless tobacco product; manufacturer collects tax
  • Natural gas severance tax levied equal to 5% of gross value plus 4.7 cents per 1,000 cubic feet of natural gas (“a unit”).  Monies to be allocated as followed: General Fund 60%; 3% weatherization; 15% Environmental Stewardship Fund; 9% to impacted counties and municipalities for road etc. repair, etc.
  • R&D tax credits may be sold
  • An educational improvement tax credit may be provided to ‘Innovative Education Programs’ which enhance curriculum or academic program of public school or provides pre-K programs. (Article XVII-F)
  • Tax amnesty program going back to 6/30/04 on a one-time basis
  • Tax on table games if authorized with a licensing fee of $20 million ($7.5 million if already doing slots) plus 34% of daily gross revenue

INSURANCE COMMITTEE UPDATES

  • The House Insurance Committee’s October 9 Insurance Fraud hearing was cancelled.
  • On October 6, the committee will meet to consider HB 523 (DeLuca-D-Allegheny) establishing a state Landslide Insurance program similar to the mine subsidence insurance program administered by DEP and HB 1049 (Saylor-R-York) establishing dental anesthesia under certain conditions as a mandated benefit for health insurance policies.

MENSCH WINS SENATE RACE

Robert Mensch (R-Montgomery) won a special Senate election to succeed Rob Wonderling on September 29, thus continuing the GOP’s hold on that district.  His success opens up the race for Mensch’s House seat (when a special election date is set) as well as a Republican vacancy on the House Insurance Committee.

KEEP THESE DATES OPEN

  • The Pittsburgh Association of Health Underwriters holds a meeting on Federal & State Health Care Reform October 13 in Pittsburgh.  Details: Marci Popek 412/747-7539 or Kevin Sweeney 412/261-2222
  • The National Association of Insurance Women (NAIW) holds its’ PA Council Day October 16-17 in Coraopolis.  Details: Cindy Sypien 412/808-3015 or Barbara Farris 412/327-5376
  • October 20 is the Tenth Annual Crop Insurance Conference sponsored by the PA Department of Agriculture, Risk Management Agency of USDA, Cooperative Extension Service and others.  Details; Karen Powell kapowell@state.pa.us .

FEDERAL COMMITTEE AMENDMENTS DONE

The long list of almost 600 amendments to the Baucus bill has been considered by the Senate Finance Committee and the bill is now in place for committee consideration before its movement to the Senate floor.  After committee passage, the big issue to be resolved is whether or not the health overhaul will include a federal public option as a competitor to private sector plans.  The Health Education Labor & Pensions (HELP) Committee bill contains it and the Baucus bill does not.  Details: www.thomas.gov and reference the Senate Finance Committee to see information on the amended Baucus bill.

FEDERAL FLOOD PROGRAM GETS ONE MONTH MORE

In a last-minute vote, the U.S. Congress voted to extend the National Flood Insurance Program (NFIP) through October 31, 2009 via HR 2918.  The program was set to expire September 30, 2009.  Waiting to be considered is the Flood Insurance Reform and Modernization Act.  Meanwhile, the Government Accountability Office (GAO) issued report GAO-09-455 criticizing the program as not even knowing whether its payments to Write Your Own (WYO) insurance carriers are reasonable.  According to the GAO, FEMA paid six of the largest WYO insurers $327.1 million more than their expenses over a three policy year period, translating to what GAO feels is a 16.5 percent overpayment. Details: www.gao.gov

Another bit of flood insurance news:  Don’t forget that there are a number of October 1 changes to the Flood Insurance Manual.

MICHELLE’S LAW EFFECTIVE OCTOBER 9

A new Federal law called Michelle’s Law takes effect October 9 affecting group health plans and how they treat dependent children based on student status.  Carriers must continue coverage to dependent students who are required to take a medically necessary leave of absence from school or change their enrollment status such as changing from full to part-time student status because of serious illness or injury.

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