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LEG REG REVIEW
2017, 37th Issue *** November 27, 2017 
 
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.  Subscriptions are $100 per year and further information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail at 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. Whether you need help meeting your CE or have a particular problem/question, please go to our web site to explore how PHILLIPS ASSOCIATES may be of service to you, your employees, and your clients.  www.vphillipsassoc.com 
 
CHIP RENEWAL ONE STEP CLOSER
On November 20, the House voted 194-0 to send House Bill 1388 (Irvin-R-Mifflin/Centre/Huntingdon) back to the Senate for concurrence.  The measure would extend the life of the Children’s Health Insurance Program (CHIP) until December 31, 2019, or ninety days after Federal funding for CHIP is no longer available.  What complicates is that the Senate added language partially reversing Governor Wolf’s addition of transgender transition to eligible CHIP coverage.  The House used a maneuver reverting to a prior Printer’s Number.  What this means is that HB 1388 went back to its original language without the transgender benefit restriction.  When the Senate returns to Harrisburg, it will have to decide which version it really wants since, if not reauthorized, the CHIP will lose its ability to function after December 31, 2017.
 
LEGISLATIVE NOTES
The focus of the House this past week was on whether or not there should be a tax on Marcellus Shale natural gas extraction.  By week’s end, the PA House had only gone through slightly over a tenth of the 200-plus amendments.  Nonetheless, in addition to HB 1388 described above, there were still other legislative items of possible interest.

  • The House passed House Bill 1588 (Diamond-R-Lebanon) 191-0 on November 21 to require the Department of Aging on a monthly basis to cross reference its list of PACE/PACENET prescription drug beneficiaries with death records maintained by the Department of Health.
  • House Bill 1548 (Kristin-Hill –R-York) amends the PA Breach of Personal Information Act which became law in 2005.  Her bill updates the definition of personally identifiable information to include health and medical information and adds specific language to notices of privacy breaches which will include an offer of one year’s free credit monitoring.  It also adds a requirement that notices describe what steps are being taken to protect individuals’ information potentially affected by the breach.  This bill was re-referred to the House Commerce Committee November 20.
  • On November 15, Senate Bills 877 and 878 (White-R-Indiana) setting allowable rebates and inducements at $100 were referred to the House Insurance Committee.  If enacted, they would reverse 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”). Senate Bills 877 and 878 join their House counterparts, House Bills 1841 and 1842 sponsored by Rep. Mike Tobash (R-Schuylkill), which also allow rebates and inducements up to $100, in the House Insurance Committee.

 
ANOTHER $200 MILLION HOLE IN THE STATE BUDGET?
U.S. Middle District Chief Judge Christopher Conner issued a preliminary injunction preventing the state from dissolving the state’s medical malpractice insurer of last resort, the PA Professional Liability Joint Underwriting Association (JUA).  Part of this year’s budget was a plan for the state to take $200 million from JUA’s reserves to help balance the State Budget.  Included was a threat to dissolve the JUA if it did not hand over the money by December 1st.  If JUA wins, the State Budget will have a $200 million revenue hole for the current fiscal year.
 
 
COMPARE U.S. HOUSE & SENATE TAX CODE BILLS
As most know, the U.S. Senate tax reform bill includes another congressional attempt at voiding the Affordable Care Act penalty for not having health insurance (the Individual Mandate).  Just scratching the surface of this legislation, this summary of some of the provisions of the U.S. House and Senate tax overhaul bills was completed by Washington, DC law firm Holland & Knight’s Public Policy & Regulation Group and Taxation Team.  https://www.hklaw.com/practices/uniGC.aspx?xpST=PracticeList 
 
In both House and Senate bills:
~ Corporate Tax Rate:  20% starting in 2018
~ Net Operating Losses: Eliminates net operating loss carrybacks; net operating loss carry forward deduction limited to 90% of taxpayer’s taxable income
~ Alternative Minimum Tax repealed
~ Repealed are certain Itemized Deductions for State and local taxes, unreimbursed employee expenses, and tax preparation fees
~ Interest Deduction limited to 30% of earnings before interest, tax, depreciation, and amortization
 
Differences between House and Senate bills:

  • Estate Tax Repeal:  Yes, by 2024 in House bill.  Both increase exclusion amount to $10 million.
  • Individual Tax Rates: House has four brackets, 12%, 25%, 35%, and 39.6%.  Senate has seven brackets, 10%, 12%, 22.5%, 25%, 35%, and 38.5%
  • Capital Gains:  House has zero percent in 12% bracket, 15% in 25% bracket; 20% in 35% bracket.  Senate has zero percent if income is $38,700 or less, 15% for income up to $426,700, and 20% for taxpayer with income over $426,700.
  • Standard Deduction: House has $12,200 for single taxpayer, $18,300 for heads of households, and $24,499 for married filing jointly.  Senate has $12,000 single, $18,000 heads of household, and $24,000 for married filing jointly
  • Itemized Deductions: House bill eliminates medical expenses deduction, certain property/casualty losses, and mortgage interest expense on acquisition debt of more than $500,000.

 
CMS ANNOUNCES MEDICARE PART A & B PREMIUMS/DEDUCTIBLES
On November 17, the Centers for Medicare & Medicaid Services posted that 2018 Medicare standard monthly premiums for Part B enrollees will remain $134.  Part B deductibles will remain $183.  Part A enrollees’ annual inpatient hospital deductible will be $1,340 per benefit period in 2018, a $24 increase.
 
REGULATORY UPDATES

  • The PA Association of Mutual Insurance Companies (PAMIC)’s newsletter PAMIC 360 reports that Mutual Insurance Company of Lehigh County and Clearfield Grange Mutual Insurance Company have completed their merger.  The new company will be known as Community Insurance Company, a stock insurance company and subsidiary of Community Holdings Management, a mutual holding company.
  • Radian Mortgage Insurance, Inc., a domestic stock casualty insurance company, submitted an application to the PA Insurance Department in order to surrender its Certificate of Authority.
  • Hannover Ruck Re of Hannover, Germany, applied for renewal of its designation as a certified reinsurer in the Commonwealth.

FEE INCREASE NOTE:  In the November 25 PA Bulletin, the PA State Police listed fees for doing a Criminal History Check as $22.00 and Access and Review Challenge fee as $20.00.