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 Pennsylvania legislation and regulations impacting 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. Whether it means meeting your CE need or helping with a particular problem/question, please visit our web site to explore how PHILLIPS ASSOCIATES may be of service to you, your employees and your clients. www.vphillipsassoc.com
INSURANCE DEPARTMENTS REDUCES LTCi MANDATORY INFLATION
On July 30, the PA Insurance Department issued Notice 2016-09 along with a request for comments on the Long-Term Care Partnership insurance policy (also called a Qualified Partnership Policy). The Notice reduced the mandated inflation protection from three-percent to one-percent for Partnership policies. Similar to a regulatory action taken by Maryland in May, the 1% requirement would “give consumers more affordable Long-Term Care Partnership product options while retaining additional inflation protection available today. While a lower level of inflation protection would reduce an individual’s benefit, particularly over time, it would allow an individual to maintain meaningful coverage while still having the protection of a Long-Term Care Partnership policy.”
Background. Long-Term Care Partnerships came into being by way of the U.S. Deficit Reduction Act of 2005. It allowed states to secure Medicaid waivers from spend-down requirements so as to allow an individual to shelter assets (up to $300,000 in Pennsylvania) in order to purchase a Partnership policy. That way, should long-term care be needed, the Partnership policy would respond first, saving Medicaid and taxpayers’ money. PA Association of Health Underwriters (PAHU) lobbied for its enactment in PA as Act 40 of 2007. The Insurance Department issued Notice 2008-5 April 19, 2008 and this Notice replaces part of the earlier directive. As a result of this departmental administrative action, PAHU no longer needs to push for a legislative fix. PAHU has lobbied for a change in the inflation requirement and has testified repeatedly about the need to allow the Long-Term Care Partnership insurance policies to work as intended. In January 27, 2016 testimony before the House Aging & Older Adult Services Committee, PAHU said that only two carriers were still offering Partnership policies and that the mandatory 3% inflation protection prices the product out of the reach of the middle class.
This inflation issue has been one of the top three issues for the Association.
The new policy is open for public comment until August 29, 2016 via Bureau of Life, Accident and Health, Office of Insurance Product Regulation, 1326 Strawberry Square, Harrisburg, PA 17120, firstname.lastname@example.org. Following are two links. The first is Notice 2016-09. The second is the original Notice 2008-05. NOTE: Other provisions of the earlier Notice such as the required LTCi training for insurance producers remain in effect.
https://www.pabulletin.com/secure/data/vol46/46-31/1331.html (Notice 2016-09)
https://www.pabulletin.com/secure/data/vol38/38-16/771.html (Notice 2008-05
PA Insurance Commissioner Teresa Miller chairs the Long-Term Care Innovation Sub-Group of the National Association of Insurance Commissioners.
CROP INSURANCE UPDATES FROM PDA
The PA Department of Agriculture, USDA Risk Management Agency, PA Farm Bureau and Phillips Associates are again sponsoring an Early Riser CE briefing on program changes in the Crop Insurance program. The 2016 offering will take place 7:00 a.m. Wednesday August 17 at the PA AG Progress Days in Rock Springs, PA. There is no fee to attend just for information. Those wishing to see their credit filed would pay $10.00 to cover filing costs. NOTE: This fee is waived for members of the Crop Insurance Agents Association of PA. Details: 717-346-1063 (Phillips Associates) or the PA Department of Agriculture’s Jordan Stasyszyn 717-787-6901, email@example.com
- Bankers Standard Fire & Marine Company filed an application to merge with Bankers Standard Insurance Company, a domestic stock P/C company. Bankers Standard would survive the merger.
- Pennsylvania Life Insurance Company, a PA stock life company, submitted a request to reinsure its entire schedule of policies with Texas-based stock Constitution Life Insurance Company.
- OLDER Regulatory News (crowded out by the State Budget) from June 25 PA Bulletin:
- The Department of Labor & Industry (L&I) gave notice that it utilizes the Red Book published by Truven Health Analytics to determine the wholesale price of drugs under Workers’ Compensation.
- The Insurance Department is conducting its annual Private Passenger Data Call (Act 6 Data Call) to insurance companies in this market in 2015 as well as to carriers with no PA private automobile premium in 2015. Details: James DiSanto 717-783-2118, firstname.lastname@example.org
- Labor & Industry listed the range of fees and average fees charged by Utilization Review Organizations and Peer review Organizations for services provided under the Workers’ Compensation Act.
- The Department of Banking & Securities issued omnibus amendments to the PA Banking & Securities Code to update re the merger of the Securities Commission with the Department of Banking, allowing more electronic filings and submissions and securing PA compliance with the North American Securities Administrators Association (NASAA) model rules, etc.
- Per Diem charges for company financial exams were posted per Notice 2016-06 and per diem charges for market conduct exams were posted in Notice 2016-07. Following are the charges:
Market Conduct Financial Exams .
Examiner Trainee $575 per day Actuarial Associate 1 $507
Examiner 1 $624 per day Actuarial Associate 2 $627
Examiner 2 $784 per day Examiner trainee $507
Examiner 1 $666
Examiner 2 $763
Examiner 3 $865
Examination Manager $873
Info Systems Examiner $773
SIGNED INTO LAW ARE House Bill 1766 (Pickett-R-Bradford) as Act 59 of 2016 regarding for standard valuation of life insurer reserves which took effect June 30 and House Bill 60 (Act 8 of 2016) sponsored by Rep. Matt Baker (R-Tioga) prohibiting health insurers from paying less for oral chemotherapy versus intravenous chemotherapy. HB 60 took effect on July 8.