LEG REG REVIEW 2014, 14th Issue May 28, 2014

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).  Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 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 or added to this list.

GENERAL ASSEMBLY RETURNS

The PA General Assembly returns June 2 to address several key issues, the most pressing of which is passage of the State Budget by month’s end.  Others demanding time are pension reform, liquor store privatization, property tax reform (possibly in the Senate Finance Committee), and of interest to insurance agents and brokers, House Bill 1522 and Senate Bill 1268 requiring Navigator and certified application counselor registration and criminal background checks.  The first week of their return does not yet show any committee activity or calendar activity regarding insurance but one bill requires data breach notifications to affected parties by municipalities or state agencies within one week.  House Bill 2167 updates existing law (Act 94 of 2005) which says that notification takes place “without necessary delay”.  According to bill sponsor Rep. Rose Marie Swanger (R-Lebanon), there have been recent breaches where it took the Department of Public Welfare three weeks to tell the public and the PA Department of Aging, two weeks.  The bill is on the House Judiciary Committee calendar June 3.  NOTE: This bill is a companion to Senate Bill 114 (Pileggi-R-Chester/Delaware) which passed the Senate May 1, 2013 and which was referred to the House Judiciary Committee.

ELECTION RE-CAP

The 2014 political season will have a great 2015-16 impact on the committees because there will be so many vacancies in the chairmanships.  That will be the subject of extensive speculation since so many committee chairs announced their retirements from the state legislature this year.  House will have Majority Chair vacancies in Transportation, Education, Environmental Resources & Energy, Commerce, Labor & Industry, Tourism & Recreational Development.  Minority Chair for the House Finance will be new next year.  The Senate will see a Majority Finance Committee Chair opening and Minority Chair of the Senate Banking & Insurance Committee if Senator Mike Stack (D-Phila.) who won the Democratic nomination for Lt. Governor also wins in the fall.   Some races to note:

–          Incumbent Senator LeAnna Washington (D-Phila.) lost her primary race as did Rep. J.P. Miranda (D-Phila.).  Both were alleged to have accepted bribes.

–          Two open Senate seats contested by House members saw victories by Rep. Michelle Brooks (R-Mercer) over Rep. Greg Lucas (R-Erie) for the GOP nomination to succeed retiring Bob Robbins and a victory by Rep. Ryan Aument (R-Lancaster) over fellow Republican Rep. Gordon Denlinger (R-Lancaster) to win the GOP nomination in the race to succeed retiring Senator Mike Brubaker.

–          Two races where winning the primary almost guarantees a November win include York County’s newly elected Senator Scott Wagner, Republican, and Fayette County where Democratic House member Deberah Kula won the Democratic nomination for the seat held by retiring Richard Kasunic (-Fayette).

–          The first openly gay legislator Mike Fleck (R-Huntingdon) lost the Republican nomination but won the Democratic nomination via write in votes.

–          Democratic nominee for Congress in the 13th district (Phila./Montgomery) is State Representative Brendan Boyle (D-Phila.) who defeated Senator Daylin Leach and Clinton favorite, former congresswoman Margolies-Mezvinsky.

–          Veteran lawmaker Rep. Harry Readshaw (D-Allegheny) prevailed over fellow Rep. Erin Molchany (D-Allegheny) after redistricting forced them together.  In Lackawanna County Rep. Frank Farina (D) won over fellow Rep. Kevin Haggerty (D), again brought together by reapportionment.

SAME SEX RULING HAS EMPLOYEE BENEFIT IMPACT

On May 20, 2014, Federal Judge John Jones III issued a landmark ruling in Whitewood et al vs. Michael Wolf (Commonwealth of PA) that struck down Pennsylvania’s 1996 Marriage Law specifying that a marriage is defined as being between a man and a woman.  The ruling also forced PA to recognize same-sex marriages conducted in other states.  On May 21, Governor Corbett said that although as a Catholic, he disagreed with the ruling, he would not appeal it.

What impact will that have on insurance plans and employers?

DISCLAIMER: The following analysis should not be construed as legal advice but presents guideposts for evaluating the ruling’s implication to health benefits.  Employers are advised to seek legal counsel for specific guidance.

The ruling is effective immediately but an unanswered question is effective date for employer-offered health plans.  The ruling did NOT specify which PA changes in benefits are affected BUT it brings the June 2013 U.S. Supreme Court ruling against the Defense of Marriage Act (DOMA) to Pennsylvania since SCOTUS said that its decision affects states which do recognize same-sex marriages.  Consider these potential impacts:

–          Same-sex couples will be treated as married for all federal tax purposes, including estate and income taxes, earned income tax credit, child tax credit, etc.

–          Legally-married same –sex couples would file federal returns as married filing jointly or married filing separately.

  • The IRS earlier issued Revenue Ruling 2013-17 and FAQs and Publication 555, Community Property. (www.irs.gov)
  • There is nothing in the ruling that addresses the IRS determination that spouses are not considered dependents under the mandated offering of coverage in firms which are classified as ‘large’ under the Patient Protection Affordable Care Act (PPACA).  This may have an impact on firms that decide after the ruling to discontinue spouse coverage if a same-sex couple alleges that the decision is discriminatory against them…seen as a pretext not to insure gay couples.  It sounds like a reason to review employment practices liability coverage (EPLI) with a P/C broker to make sure that EPLI coverage is adequate.
  • Family Medical Leave Act (FLMA) allowing eligible employees to care for same-sex spouses with a serious health condition also applies.

ERISA-governed plans should be aware of US Department of Labor Technical Release 2013-04 posted September 18, 2013 regarding treatment of same-sex couples.  www.dol.gov/ebsa/newsroom/tr13-04.html

FLOOD TRAINING FOR JUNE

The National Flood Insurance Program (NFIP) released its June 2014 schedule of webinar training.  Its two-part Basic Agent training is 2-4:00 p.m. June 3 and 4; 10:00 a.m. – 12 noon June 11 and 12; 10:00 a.m. – 12 noon AND 2 – 4:00 p.m. June 17 and 18; 10:00 a.m. – 12 noon June 25 and 26.  Details: webinars@h2opartnersusa.com NOTE: PHILLIPS ASSOCIATES offers CE in-house on the 2014 changes to the NFIP.  Please contact 717-732-7255.

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