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 firstname.lastname@example.org. Please email email@example.com supplying both your name and e-mail address if you wish to be removed from or added to this list.
BUDGET GAUNTLET CONTINUES
As expected, Governor Wolf vetoed the latest attempt by the General Assembly to get some state money flowing. Apparently, House Republican leaders will have Members vote this week on tax increases proposed by the Governor. If adopted, the way would be paved for consideration of a spending plan for the FY 2015-16 Fiscal Year. The challenge for Democrats will be to hold Democratic votes from natural gas areas of the state for a tax on Marcellus Shale extraction. If there are defections, can Republican votes from southeastern PA offset them? Of particular interest to insurance producers is how the proposed expansion of the Sales Tax to other professional services will impact their clients. PAHU has voiced the fear that the Sales Tax would adversely affect business clients for fee-based services such as TPAs, COBRA compliance, ERISA compliance, employee benefits consulting, and fee-based consulting on how employers can comply with the new business requirements of the Patient Protection Affordable Care Act (PPACA).
As of this writing, the specific list of services to be voted on has not yet been released.
SWIF HEARING HELD BY INSURANCE COMMITTEE
On October 5, the House Insurance Committee convened an informational meeting on the State Workers’ Insurance Fund (SWIF). Former legislator and now Secretary of Labor & Industry Kathy Manderino explained SWIF procedures and fiscal outlook for the state’s Workers’ Compensation insurer of last resort. Some highlights:
- SWIF is the largest insurer of Workers Compensation in PA
- Revenues from premiums are roughly $200 million versus approximately $200 in claims paid but the surplus has been shrinking for eight or more years
- SWIF’s non-collected premiums amount to “tens of millions” per year but SWIF is still obliged to pay claims
- Act 46 (cancer as an occupational disease for firefighters) has resulted in a shift of business to SWIF so that 1,100 of the state’s 2,300 volunteer fire companies are now covered by SWIF.
SWIF ran out of legislative authority to make investments on June 30, 2015 when legislation to renew its authority was vetoed by Governor Wolf as part of the larger budget impasse. Secretary Manderino said that the lapse would not affect SWIF’s authority to invest because of Section 1512 of the Workers Compensation Act which placed investment authority “on sound legal ground”. She said that this situation had a 2009 precedent that was corrected by 2010 retroactive legislation.
BALANCE BILLING HEARING FOLLOW UP
After the October 1 hearing convened by the PA Insurance Department to examine a practice known as balance billing, it supplied a link for those seeking to review testimony presented at the event. https://www.insurance.pa.gov/Pages/Balance-Billing-Hearing-Oct-2015.aspx#.VhKzwH1qO2B Balance billing occurs when a patient learns that he or she received medical care services from a health care provider not in the network and is charged the higher rate.
CONGRESS SAYS THAT STATES CAN KEEP 50
Both the US House of Representatives and the US Senate passed HR 1624 to give states the ability to determine a small group up to 50 employees instead of being forced to redefine small groups as going up to 100. The change to 100 is mandated by PPACA and legislators from both parties felt that states should retain this authority. On September 28 House passed HR 1624 by voice vote. On October 1, the Senate passed HR 1624 by voice vote. Several Pennsylvania Representatives sponsored the bill: Representatives Kelly, Thompson, Costello, Meehan, Fitzpatrick, Shuster, Marino, Barletta, Rothfus, Dent and Murphy. Senator Toomey sponsored the Senate counterpart.
Speaking before the Annual Meeting of the Greater Philadelphia Association of Health Underwriters (GPAHU) October 1, PA Insurance Commissioner Teresa Miller said that the Commonwealth would prefer to keep the determination of a small employer at 50 per existing PA law (Act 134). Of course, the White House has not indicated its intention to either sign or veto HR 1624. Passage was a major priority of the National Association of Health Underwriters.
AMBULANCE BILLS MOVE THROUGH SENATE BANKING & INSURANCE
On September 30, the Senate Banking & Insurance Committee amended and moved House Bill 347 (O’Neill-R-Bucks) regarding how ambulance services can be reimbursed by insurance carriers. It allows for direct EMS reimbursement but requires them to put their names on a registry maintained by the state. It also specifies that insurers must consider ambulance reimbursement at in-network reimbursement schedules. In addition:
- The EMS entity may not invoice a policyholder if it is on the registry
- Insurers may inspect claims via audit but may not force repayment to the insurer; instead, if the insurer identifies an improper payment, the insurer may deduct that amount from future reimbursements.
HB 347 still needs Senate approval and concurrence by the House with Senate amendments.
PA INSURANCE DEPARTMENT OFFERS LIFE POLICY LOCATOR HELP
On September 28, the Insurance Department issued a press release saying that it would assist policyholders in locating lost life insurance policies and beneficiaries in locating policies from defunct or successor insurance carriers. Details: 877-881-6388
SEPTEMBER REVENUE FIGURES RELEASED
The Revenue Department announced October 1 that the Commonwealth collected $2.7 billion into the General Fund in September. The breakdown follows: Sales Tax $783 million (year-to-date $2.5 billion); Personal Income Tax $1.2 billion (YTD $2.5 billion); Corporation Tax $517.9 million (YTD $650 million); Inheritance Tax $71.5 million (YTD $228 million); Realty Transfer Tax $36.2 million (YTD $136.8 million); Other General Fund revenues (cigarettes, malt beverage, liquor, table games) totaled $121.5 million (YTD $351.5 million). One drawback from these figures is that the Revenue Department did not compare revenues versus expected revenues. The release said “September collection data does not include a comparison against amounts because monthly revenue estimates are not yet finalized.” The importance of this comparison is that this data can help predict whether or not Pennsylvania will have a surplus or deficit by the end of the 2015-16 Fiscal Year.
INSURANCE INDUSTRY NOTES
- October 10-17, 2015 has been declared to be The Week of Giving by the Insurance Industry Charitable Foundation (https://ec.samaritan.com)
- November 5 is the date of the 2015 Lehigh Valley I Day at the Best Western in Bethlehem. Details: Shirley Esheleman firstname.lastname@example.org or Michelle Grace at email@example.com
National Flood Insurance Program (NFIP) issued Notice W-15045 on September 29 saying that existing Elevation Certificate FEMA Form 086-0-33 and Floodproofing Certificate FEMA 086-0-34 may continue to be used until October 31, 2015. Details: at firstname.lastname@example.org