Of all the holidays, I am especially drawn to Thanksgiving. It is unheralded but sincere. It is a statement of giving rather than receiving. It is a time to appreciate the blessings bestowed upon us and also a time to think about the most important things – our family, our friends, and our faith. I am writing to simply tell you that I appreciate you as subscribers who share an interest in knowing what’s going on and also as friends. Thank you sincerely and Happy Thanksgiving.
INSURANCE INCENTIVE LEGISLATION MOVES THROUGH SENATE
On November 13, the PA Senate passed two bills which change Pennsylvania insurance law to allow insurance companies and insurance producers to offer inducements and rebates to consumers. Sponsored by Senate Banking & Insurance Committee Chair Don White (R-Indiana), Senate Bills 877 and 878 reflect a change from long-standing PA laws such as the Unfair Insurance Practices Act (Act 205) which expressly prohibited the practice although the Insurance Department allows for minor gifts (“de minimus”).
A concern expressed over time has been the lack of clarity as to what “de minimus” means. The limit to rebates and inducements in SB 877 and 878 is $100. There are House counterparts, House Bills 1841 and 1842 sponsored by Rep. Mike Tobash (R-Schuylkill), which also allow rebates and inducements up to $100.
BUDGET FOLLOW UP
Although most observers breathed a sigh of relief to see the State Budget, there are still some loose ends.
- The medical malpractice insurer of last resort, the PA Professional Liability Joint Underwriting Association (JUA) has sued the Commonwealth for what it says is illegally taking $200 million out of the insurer’s reserves to help balance the State Budget. (Act 44 of 2017)
- Up in the air is Governor Wolf’s plan to take out what amounts to an equity loan on the state-owned Harrisburg Farm Show Complex. His goal was to have the state receive a $200 million loan which would have to be repaid to the lender over 30 years. There is speculation over the legality of such a move. The bidding period closed November 13.
- Unknown as of November 19 is from which dedicated funds Governor Wolf will take $300 million. Thanks to authority given to him by the General Assembly in order to push revenue bills for the State Budget, Governor Wolf can choose from as few or as many he wants. Of concern to the insurance industry is whether the Insurance Regulation and Oversight Fund will be picked. That is a special fund dedicated to funding the PA Insurance Department’s general government operations. (Act 44 of 2017)
- Governor Wolf has dropped his plan to borrow against future profits from the PA Liquor Control Board after the PA Commonwealth Financing Authority approved plans to borrow $1.5 billion from future Tobacco Settlement monies coming into the state. (Act 43 of 2017)
A BILL TO WATCH: DENTAL DIRECT PAYMENT BILL
Senate Bill 373 (Eichelberger-R-Blair) received first consideration by the PA Senate after being reported out by the Senate Banking & Insurance Committee October 24. It would direct insurance companies to pay a dentist directly for services rendered to a patient if authorized to do so by the policyholder.
FEDERAL NEWS: TAX REFORM
The U.S. House of Representatives passed a landmark tax reform bill on November 16 by a 227-205 vote. With the Senate considering its own version, ultimately, differences will be ironed out by a conference committee. This far-reaching legislation is a top priority of the Trump Administration, important for the 2018 mid-term elections to show voters that Republicans were able to achieve a major goal promised in the presidential campaign. U.S. Rep. Lloyd Smucker (R-16) provided a section by section summary of House Resolution 1. Policy highlights Section-by-section summary Bill text The House vote was along party lines with Republicans voting yes and Democrats saying no. There are two PA House member sponsors, Rep. Mike Kelly (R-3) and Rep. Patrick Meehan (R-7).
The Senate Finance Committee voted out its version of the Tax Cuts and Jobs Act on November 16 by a 14-12 vote. PA Senator Pat Toomey voted for the bill. One thing it does relative to the Affordable Care Act is to reduce the individual shared responsibility penalty to zero starting January 1, 2019. A common misreporting by media is that the individual mandate itself would be repealed. In this bill, the penalty goes to zero but the underlying legal requirement to have health insurance remains. https://www.finance.senate.gov/imo/media/doc/11.14.17%20Chairman’s%20Modified%20Mark.pdf
- PA Rep. Rick Saccone (R-Washington/Allegheny) was chosen as the GOP candidate in the special election to succeed resigned U.S. Representative Tim Murphy. He defeated two PA Senators, Kim Ward and Guy Reschenthaler to win the Republican nomination. The special election will take place March 13. The winner would serve out the remainder of Murphy’s term, meaning that the winner will face a re-election contest in November 2018.
- House Speaker Mike Turzai (R-Allegheny) announced his candidacy for the Republican nominee for Governor on November 14. His announcement brings to four Republicans vying for the nomination, one of whom, Senator Scott Wagner (R-York) is also a legislator. The other two are also from Allegheny County, health consultant Paul Mango and Pittsburgh attorney Laura Ellsworth. Turzai also plans to file for re-election as a state representative.
- January 25 is the date of the special election to replace Rep. Marc Gergelely (D-Allegheny) set by Speaker of the House Mike Turzai (R-Allegheny). This district is traditionally Democratic. Gergeley was forced to step down after pleading guilty to violating gambling laws.
- State Representative Justin Simmons (R-Northampton/Lehigh/Montgomery) has withdrawn from the contest for the Republican nomination to succeed retiring U.S. Representative Charles Dent.
KAISER ANNOUNCES PENALTY CALCULATOR
On November 7, the Kaiser Family Foundation announced that it has an individual mandate penalty calculator that will allow people to see what their fine will be if they do not have health insurance. Using household income, family data, and zip code, the tool provides a projection of an individual’s penalty. It also helps one to determine if he/she is eligible for Medicaid. https://www.kff.org/interactive/penalty-calculator/?utm_campaign=KFF-2017-November-Individual-Mandate-Penalty- Calculator&utm_source=hs_email&utm_medium=email&utm_content=58179833&_hsenc=p2ANqtz-_hCimahXTcaugJeXDjVRJZKgPl3irfn2infh83Aqg7ksKO_kgKoLX0I-KlWMHDudB0hmJKnrRogdzeUIPMvzej9cqdpA&_hsmi=58179833
EXCHANGE NOTE…The Trump Administration has added a feature to help enrollments in the Marketplaces (Exchanges). Help on Demand is an insurance broker locator and will have the closest insurance producer call the prospective enrollee back. NOTE: Once notified by CMS, the producer has 15 minutes to confirm interest or CMS will refer to the next insurance producer on the list. Details: https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/Help-On-Demand.pdf