LEG REG REVIEW 2014, 16th Issue June 16, 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.

BUDGET BILL BEGINS JOURNEY

It’s the start of crunch time for PA lawmakers coming to grips with the State Budget for the fiscal year beginning July 1, 2014.  It’s all about money since revenue projections for this year were not met. May’s collections for example were $108 million less than anticipated. The initial vehicle for the Budget is House Bill 2328 (Adolph-R-Delaware) which was reported out of the House Appropriations Committee June 9 and  re-referred to the House Rules Committee June 11.  Expected is a House vote this week and movement of HB 2328 to the Senate for its review.

MANDATED BENEFIT BILL CONSIDERED BY CHILDREN & YOUTH COMMITTEE

House Bill 1436 (Truitt-R-Chester) is up for a vote by the House Children & Youth Committee June 17.  The bill would mandate health insurance coverage for certain low amino acid foods necessary for children who have severe allergic reactions.  PA Association of Health Underwriters (PAHU) expressed concern that a provision of the Patient Protection Affordable Care Act (PPACA) would force the Commonwealth to pay for the costs of that mandated benefit per Section 1311 of the federal law if the federally facilitated exchange is also required to carry this mandate.  If exchanges are exempt, the outcome would be an exchange product cheaper than standard private sector policies which would unbalance the proverbial level competitive playing field.

COMING UP…

  • June 17 the House Insurance Committee will meet regarding House Bill 2340 (Kampf-R-Chester).  This bill sets forth the framework by which a reciprocal insurance company may convert to a stock insurance company.
  • June 19 the House Health & Human Services Committee will consider House Bill 1760, the Volunteer Healthcare Practitioners Act (Denlinger-R-Lancaster).  HB 1760 specifies that those who are certified as volunteer healthcare practitioners be immune from civil liability for any medical error or omission which led to personal injury or death.

HHS APPROVES PA SHOP DELAY REQUEST

The US Department of Health & Human Services (HHS) June 9 approved Pennsylvania’s petition to delay the employee choice provision for the SHOP small business exchange until 2016.  The original PPACA design was to have small employers subscribing to SHOP have their employees choose between competing qualified health plans.  Thus, a firm of 25 employees might have five or more different plan choices made by the individual employees.  The Obama Administration delayed this provision until 2015, meaning that an employer entering into the SHOP exchange would make the choice for their employees just as it had historically done.  The June 2 letter from Insurance Commissioner Consedine letter asked HHS to hold off on implementing the employee choice for another year given feedback from four out of five major health plans that the move would result in higher carrier costs attributable to adverse selection “as individuals with greater medical needs may purchase benefit-rich plans, but pay insufficient premium dollars to cover their medical costs.”  The letter suggested that small businesses would bear the brunt of these increased costs and that “transitioning employee choice into the FF-SHOP after 2015 is in the best interest of Pennsylvanians and our insurance market”.

INSURANCE COMMITTEE TO EXPLORE EXPERIMENTAL TRANSIT

On June 25, the House Insurance Committee will convene a hearing on experimental ride-sharing services and how insurance responds.  It follows a June 2 release from the PA Insurance Department saying that consumers using the new Transportation Network Companies (TNCs) which connect passengers with drivers through an online or mobile phone application may not understand their potential liability or risk exposure.  The Department suggested:

  • Reviewing an auto policy to see if TNC is covered and seeing a copy of the TNC policy
  • Contacting an insurance agent to help identify gaps in coverage
  • Making sure that the TNC policy covers medical benefits, bodily injury, and property damage liability as required by state law.  Asking about uninsured or underinsured motorist protection
  • Being aware that coverage to address gaps should include the period before and during the time when a person is the designated driver.
  • Finding out when the TNC’s commercial auto policy is triggered

REGULATORY UPDATES

  • A number of obsolete Insurance Department Notices were shelved, mainly dealing with Workers’ Compensation and MCARE.  List may be obtained at https://www.pabulletin.com/secure/data/vol44/44-24/1297.html
  • The Insurance Department June 14 published its annual lists of market conduct and financial examination fees.  A market conduct Examiner 1 costs $555 per day, Examiner 2 is $689 and an Examination Manager is $813. (Notice 2014-07).  Financial Examiner fees run from $465 per day for an Examiner Trainee to an Actuary 2 at $905 (Notice 2014-06).  List is obtained via https://www.pabulletin.com/secure/data/vol44/44-24/1295.html
  • On May 31, the Department of Labor & Industry issued a list of fees and average fees charged by utilization review organizations and peer review organizations for services provided by the Workers’ Compensation Act.  Details: https://www.pabulletin.com/secure/data/vol44/44-22/1178.html
  • Healthcare Providers Insurance Exchange (HPIX), an unincorporated association authorized as a PA domiciled reciprocal insurance exchange has filed an application to “take control if itself” via HPIX’s acquisition of 100% of the membership interests in American Healthcare Providers Insurance Services Corporation, LLC. 

MARYLAND INSURANCE ADMINISTRATION (MIA) REGULATORY ACTIVITY  On June 13, MIA issued notice of several Maryland insurance rules:  Subtitle 14 LONG-TERM CARE
31.14.01 Long-Term Care Insurance; 31.14.02 Long-Term Care Insurance-Premium Rates and Reserves; Subtitle 05 ASSETS, LIABILITIES, RESERVES, AND INVESTMENTS OF INSURERS
31.05.08 Credit For Reinsurance…. Subtitle 08 PROPERTY AND CASUALTY
31.08.14 Coverage for Loss Caused by Water That Backs Up Through Sewers or Drains; Subtitle 15 UNFAIR TRADE PRACTICES 31.15.13 Notice of Premium Increase for Commercial Insurance…. Subtitle 08 PROPERTY AND CASUALTY INSURANCE  31.08.13 Application of a Percentage Deductible in the Case of a Hurricane or Other Storm;  Subtitle 10 HEALTH INSURANCE-GENERAL
31.10.40 Child Only Policies;  Subtitle 11 HEALTH INSURANCE-GROUP
31.11.07 Small Employer Group Health Insurance-Self-Employed Individuals  Details and text: https://www.mdinsurance.state.md.us/sa/news-center/proposed-regulations.html

CORRECTION…In LEG REG REVIEW 2014.15, incorrect bill numbers were cited for Senator Corman’s bills (SB 1356 and SB 1357 are the correct numbers) permitting transfer of personal lines policies between company affiliates without having formal terminations take place first.  We regret the error and thank reader Tod Aronson for spotting it.

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