LEG REG REVIEW Health Edition
2018, 13th Issue *** April 16, 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.

HOUSE PASSES INSURANCE INDUCEMENT BILLS
On April 9, the PA House passed Senate Bills 877 and 878 (White-R-Indiana) by 195-0 votes which would end the prohibition on offering rebates and inducements now contained within Act 205 and numerous other statutes. It was amended to clarify what would now be legal. Both bills return to the Senate for concurrence with House amendments. The text for producer rebates follows. Similar language is used for the inducement section of the bill.
(A.1) EXCEPTION.--AN INSURANCE PRODUCER MAY OFFER OR GIVE TO AN INSURED OR A PROSPECTIVE INSURED, ON AN ANNUAL AGGREGATE BASIS, ANY FAVOR, ADVANTAGE, OBJECT, VALUABLE CONSIDERATION OR ANYTHING OTHER THAN MONEY THAT HAS A COST OF OR A REDEEMABLE VALUE OF LESS THAN OR EQUAL TO $100, WHICH IS NOT SPECIFIED IN THE CONTRACT OF INSURANCE. THE COMMISSIONER MAY INCREASE THIS AMOUNT UPON PUBLICATION OF NOTICE IN THE PENNSYLVANIA BULLETIN.
(A.2) RECEIPT CONTINGENT ON PURCHASE.--NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION TO THE CONTRARY, AN INSURANCE PRODUCER MAY NOT MAKE RECEIPT OF ANYTHING OF VALUE CONTINGENT ON THE PURCHASE OF INSURANCE.
There is also language permitting the insurance producer to offer free or low cost loss control and risk management services.

HOUSE PASSES INSURER EXAMINATION REFORMS
On April 12, the PA House passed House Bill 1851 (Pickett-R-Bradford) 194-0 to provide more certainty to insurance companies when an examination will take place. Among other things, the bill requires:

An advance consultation
Estimated costs and completion time
An additional consultation if the Department concludes that the exam will take more time or be more than 10% more costly than originally projected OR that there have major staffing changes by the examiner
A yearly report on monies spent by insurance companies for financial and market conduct exams.

Since the bill was amended, it has been returned to the Senate for concurrence. This legislation addresses a major concern by insurers that the examination process is opaque and subject to longer and more expensive than needed exams. Noteworthy is the inclusion of language that examination options must be considered to make sure that least intrusive options are examined. HB 1851 also sets parameters on invoicing from contractors such as a detailed description of specific exam components broken down in 15-minute increments.

COMMITTEE MOVES LICENSING BILLS
On April 9, the House Insurance Committee met to consider two bills regarding unlicensed retail sales of insurance. House Bill 504 (Charlton-R-Delaware) permits unlicensed retail clerks in self storage unit companies to sell contents (property) insurance. A limited lines producer license would be issued to a storage unit owner who would then designate unlicensed employees (called ‘authorized service representatives’) as those being able to solicit and sell contents insurance. These authorized service representatives would complete an unspecified length of training on property insurance basics. During the sale of contents insurance, the customer must be informed that contents insurance may not be necessary if the customer already has homeowner’s insurance and be provided with a brochure which describes insurance provisions. An owner is not required to have a limited lines producer license if the insurance solicitation is limited to display brochures and other promotional materials created by an insurer. A limited lines self-service storage insurance producer is not required to take continuing education.

The other bill approved by the House Insurance Committee was Senate Bill 630 (Reschenthaler-R-Allegheny) permitting unlicensed employees (called ‘travel retailers’) to sell travel insurance. There must be a limited lines insurance producer’s licensee who is responsible for the travel retailer’s actions. Training must take place and the limited line producer licensee must maintain a registry of travel retailers.

SENATE COMMITTEE MOVES EYE (INSURANCE) PARITY
Up for first consideration on the Senate calendar is Senate Bill 257 (Ward-R-Westmoreland) which was reported out of the Senate Banking & Insurance Committee March 27. The bill would:

Prohibit vision benefit plans in their provider contracts, from setting fees for non-covered vision services.
Require vision benefit plans to provide uniformity among providers in reimbursements for covered and non-covered services.
Prohibit vision benefit plans from limiting the eye care provider's choice of sources and suppliers of services or materials or the use of optical laboratories.
Stipulate that any changes in reimbursement rates must be agreed upon in writing by the eye care provider.
Prohibit insurance plans from requiring an eye care provider to participate in any other of the insurer's plans.
Prohibit insurance plans or programs from direct marketing their own eye care services to enrollees.
Make it an unfair method of competition and unfair deceptive act or practice under the Unfair Insurance Practices Act (Act 205 of 1974) if an insurer or a vision care plan violates the bill’s provisions with frequency sufficient to constitute a general business practice.

COMING UP

The House Insurance Committee meets this week to consider House Bill 1800 sponsored by Rep. Eric Nelson (R-Westmoreland). It would allow for what is called medication synchronization. This would enable pharmacists to provide partial prescriptions in order to make fill or refill dates the same. It seeks to reduce the numbers of people who do not take their medications because of difficulties in getting to the pharmacy multiple times during the month. HB 1800 prohibits insurers from denying coverage on the basis that it is a partial fill of the prescription.
The House Human Services Committee will meet on House Bill 1535 to require transparency from health care providers on the treatment of autism and for those with intellectual disabilities.

FEDERAL POVERTY GUIDELINES LISTED
On April 14, the PA Bulletin published Federal poverty guidelines – important for determining public assistance in a variety of programs. https://www.pabulletin.com/secure/data/vol48/48-15/578.html For example, 100% of the Federal Poverty Income Guidelines is $12,140 per year for one person, $25,100 for four persons. 133% of the Federal Poverty Income Guidelines is $16,147 and for four persons, $33,383.

REGULATORY NOTE: The Patient Safety Authority is meeting April 26 in Summerdale, PA at the Central Penn College. Details: 717-346-0469