2015, 37th Issue – December 29, 2015

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 the legislative and regulatory scene in Pennsylvania that may be of interest to 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 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.

 

STATE BUDGET UPDATE

 

Today, December 29, Governor Wolf signed House Bill 1460 into law as Act 10-A of 2015, bringing to a close some of the uncertainty resulting from the budget impasse.  There will be more legislative action or reaction since the Governor’s veto pen was busy knocking out specific line items.

Generally, the insurance industry is not impacted because the Insurance Department’s funding comes from a dedicated source of revenue, a special fund created to insulate it from such budget situations as we have now.  The Department still needs more funding but that would need to be a separate legislative fix to allocate more from the Fund to the Department.

Only a very few insurance areas are affected by the Budget:

* PA Health Care Cost Containment Council funding remains at 2.7 million.
* No payments were made to repay a loan from the Underground Storage Tank Indemnification Fund (USTIF) in the last fiscal year and no loan repayments will be made this year either.
* The Children’s Health Insurance Program (CHIP) was transferred over to the Department of Human Services (formerly DPW) under separate legislation signed this week by the Governor.  That was Act 84 of 2015 (House Bill 857 sponsored by Rep. Tina Pickett (R-Bradford)
* Federal monies for Crop Insurance outreach and education for farmers can start flowing again with the signing of the State Budget.

The tax side of the equation has not been finalized but calls to increase the PA Insurance Premium Tax appear to have been rebuffed for now as have plans to expand the reach of the sales tax to certain professional services such as fee-basis broker and TPA services.  Still very much in consideration appears to be imposing the sales tax on financial advice such as money management services which have not been defined.  Obviously, there is a great deal of uncertainty on the funding side of the equation.

Separately, the Governor signed House Bill 1322 into law as Act 92 of 2015.  This imposes an assessment on enrollees in managed care organizations (MCOs) approximating $250.00.  This assessment is meant to make up a shortfall from what Pennsylvania was supposed to have contributed in matching Medicaid funds.  I am told that the net outcome to policyholders should be a wash since insurers would be reimbursed.  I will be following how that is implemented since I am unclear as to what if anything those enrolled in MCOs will end up paying.

Best wishes to everyone for the New Year.
Vince
Vince Phillips
PAHU Contract Lobbyist and Editor, LEG REG Review

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