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LEG REG REVIEW
2018, 9th Issue *** March 12, 2018
 
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 
 
SPECIAL ELECTION THIS WEEK
March 13 is the date of the special election pitting PA House Rep. Rick Saccone (R-Washington/Allegheny) against former Assistant District Attorney Conor Lamb in the 18th congressional district to fill the remainder of former U.S. Rep. Tim Murphy’s term.  The winner might or might not be able to run for re-election in the 18th district pending given litigation regarding redistricting boundaries. 
 
There is a strong contrast between the two on insurance with Saccone’s campaign saying “Under Obamacare, health insurance has become unaffordable. Rick Saccone will utilize free-market principles to fix our healthcare crisis.”  Lamb’s platform says that “The Affordable Care Act has flaws, but it has provided affordable coverage to more than a million Pennsylvanians who were previously uninsured.  Republicans in Congress spent the past year trying to take health insurance away from people with no plan to replace it. Now, costs are likely to go up for many of us, especially those with preexisting conditions. That is unacceptable, and it's a failure of leadership.”
 
THE HOUSE RETURNS TO HARRISBURG
The PA House is back in Harrisburg this week with six insurance bills on the House calendar for second consideration.  (Second consideration means that the House has to consider on a third day before it can be finally voted on.)  These are:

  • Senate Bill 877 and Senate Bill 878 (White-R-Indiana) would permit insurance producers and insurance companies to offer an inducement to insureds or potential customers at a value of up to $100, something now prohibited by a number of PA statutes including the Unfair Insurance Practices Act (Act 205), the Producer Licensing Law (Act 147), and Act 40 (banks selling insurance).  Insurance producers would not be permitted to make receipt of anything of value contingent on the purchase of insurance.  Rep. Mike Tobash (R-Schuylkill) has similar legislation.
  • House Bill 1851 (Pickett-R-Bradford) addresses the issue of increasing costs of Insurance Department financial and market conduct examinations of insurance companies  -- including property/casualty, life, accident and health carriers.  The concern raised by insurers is the increased costs of examination when the Insurance Department outsources the exam to a third party and that there is little or no consultation with the insurer about projected costs or duration of the examination.  HB 1851 says that a written estimate must be provided within 30 days after the scheduling conference.  This is a major priority of the PA Association of Mutual Insurance Companies (PAMIC).
  • House Bill 1933 (Topper-R-Bedford) would prevent the Children’s Health Insurance Program (CHIP) to pay for procedures or treatment for children under the age of 19 seeking a change in gender.
  • House Bill 1286 (Mentzer-R-Lancaster) would require a study of Medical Malpractice punitive damage awards under the Medical Care Availability and Reduction of Errors Act (MCARE).
  • House Bill 1576 (Pickett-R-Bradford and DeLuca-D-Allegheny) to create a limited lines license where unlicensed travel agency employees could sell travel insurance.

INSURANCE DEPARTMENT SUBMITS COMMENTS ON AHPs
On March 6, the PA Insurance Department submitted comments on a regulation proposed by the Trump Administration authorizing association health plans (AHPs).  Acting Commissioner Jessica Altman pointed to Pennsylvania’s experience with AHPs that were not fully insured, or backed up by sufficient reserves to pay claims.  One issue was how these self-described Multiple Employer Welfare Arrangements (MEWAs) were regulated with MEWAs claiming to be governed by ERISA and not by state insurance departments. This regulatory blind spot led to claims not being paid.
 
The seven-page letter raised several points, some of which follow:

  • MEWAs, insurers offering coverage through MEWAs, and insurance producers marketing these MEWA plans must be subject to state law and PA state law specifically prohibits formation of an association purely for the purpose of obtaining insurance.
  • Association Health Plans would offer insufficient coverage without meeting essential benefits as described in Federal law.
  • Unlike self-insured plans which preserve the underlying solvency to pay claims, Association Health Plans may not, causing consumer risk of harm.
  • AHPs may be a back-door reemergence of health discrimination now prohibited by the Affordable Care Act since AHPs could “discriminate on the basis of gender, industry, or age unprotected by Affordable Care Act age banding, each of which may be a proxy for discrimination”.

The letter states “While we support expanding access to affordable coverage, the policy implications of expanding access to substandard coverage through AHPs is well-documented as an inappropriate strategy that has long relied on a lax regulatory structure.” 
Details:    http://www.insurance.pa.gov/Documents/Press%20and%20Communications/AHP_RIN1210-AB85_PIDComments03.06.18.pdf
 
BUDGET PROCEEDS TO NEXT STAGE
Now that the State Budget hearings have concluded, the next step is initial consideration of a budgetary spending document.  Right now, the vehicle that will be considered by the House initially is House Bill 2121 (Saylor-R-York).  Following is a link to the text of the 186-page bill:  http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2017&sessInd=0&billBody=H&billTyp=B&billNbr=2121&pn=3056
 
The process is shaping up to be smoother than in each of Governor Wolf’s previous State Budget proposals since, with the exception of a tax on natural gas (severance tax), there are no major taxes being proposed.  NOTE:  HB 2121 is a spending bill.  Tax increases would come from revenue bills.  Something else that may reduce tension in Harrisburg is continued growth in PA tax revenues for this fiscal year.  If PA has a surplus or breaks even, it could dampen fears of another billion-dollar deficit for the next fiscal year beginning July 1.  According to the PA Revenue Department, February revenues exceeded estimates by $406.3 million.  Above prediction areas were Sales Tax, Personal Income Tax (PIT), and Inheritance Tax.  Coming in lower than expected were Real Estate Transfer Tax and Corporate Income Tax.  What makes the numbers look so good however is a transfusion from the Tobacco Settlement “advance” on future monies coming into the state.  Right now, revenues for this fiscal year stand at $20.9 billion, or $496 million (2.4%) above projections.
 
ALSO THIS WEEK -- FOR CROP INSURANCE AGENTS…
March 15 is the deadline for farmers with spring-planted crops to sign up for Crop Insurance and for modifying policies including the amount of crop covered, the value at which it is insured and the loss percentage at which Crop Insurance kicks in.  For more information, contact risk management specialist Jordan Stasyszyn at 717-787-6901 or visit www.cropinsurancepa.com. For your nearest Farm Service Agency office (which handles Noninsured Assistance Program (NAP), visit www.fsa.usda.gov/pa and click “county offices” or call 717-237-2117.