LEG REG REVIEW 2014, 13th Issue May 19, 2014

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.


Tuesday May 20 is primary election day in PA.  The spotlight is on Democratic primaries for Governor and Lt. Governor to see who will oppose the Corbett-Cawley team in the November election.  Many legislative primaries are uncontested or have incumbents facing token opposition.  In the House there are 203 seats.  97 are unopposed in either the primary or the general election (42 Democrats and 55 Republicans).  Of the remaining 106 races, 28 will be decided in the primary (18 will be Democratic and 10 will be Republicans).  There are two races where incumbents are pitted against each other thanks to redistricting.  They are Allegheny County Democrats Harry Readshaw and Erin Molchaney and Lackawanna County Democrats Kevin Haggerty and Frank Farina.  A particularly interesting race may occur if former Representative Tom Quigley wins his Republican primary to face incumbent Mark Painter (D-Montgomery).  This will make a re-match reversal of 2012 with Quigley as the challenger and Painter as the incumbent this time around.  In the Senate, there are 25 seats in this year’s election.  Ten races have no primary or general election opposition (4 Democrats and six Republicans).  Of the remaining 15, three have primary challengers, Senators Christine Tartaglione (D-Phila.), Anthony Williams (D-Phila.) and Scott Wagner (R-York).  There are five open Senate seats.

Some races which include those now holding legislative office include:

  • Senator Michael Stack (D-Phila.), minority chair of the Senate Banking & Insurance Committee is vying for the Democratic nomination for Lt. Governor.  Also competing is Rep. Brandon Neuman (D-Washington).  Neuman also filed as the Democratic nominee for House in a re-election (and hedging one’s bets move, something legal under PA election law).  Stack will keep his Senate seat if he is unsuccessful here since he is not up for re-election until 2016.
  • Senate race in NW PA where Rep. Michelle Brooks (R-Mercer) is seeking the nomination to replace retiring GOP Senator Bob Robbins versus another Republican House incumbent Greg Lucas.  District is Republican.
  • Senate race in Lancaster County where two Republican House incumbents, Ryan Aument and Gordon Denlinger are seeking the nomination to replace retiring Senator Mike Brubaker (R-Lancaster) in this heavily Republican district.  Neither filed in the primary for their House seat, creating two open seats.
  • The open Senate seat in Fayette County now held by Democrat Dick Kasunic will likely stay Democratic this fall.  One candidate seeking the nomination is House Rep. Deberah Kula (D-Fayette).  She did not file for her House seat.
  • Democratic House incumbents Ted Harhai (Westmoreland), Pam DeLissio (Montgomery), Brendan Boyle (Phila.), and Mark Cohen (Phila.) all survived ballot challenges.  An interesting turn of events occurred in the Philadelphia district represented by Brian Sims who defeated long-time incumbent Babette Josephs in 2012.  This year, Josephs was challenged and was forced off the primary ballot.


NAIC reported that as of April 28, 2014, health insurance consumer complaints particularly with claim handling delays topped the list for 2014 thus far just as it did for 2013 and 2012.  41.4% of all complaints were health insurance in 2014 versus 36.5% in 2013 and 37.3% in 2012.  Auto insurance came in second all three years with 33.7%, 37.4%, and 36.2% respectively.  Homeowners insurance was third with 12.9% in 2014, 12.5% in 2013, and 13.7% in 2012.


According to CMS, Pennsylvania ended up with 318,324 who enrolled in the federally-facilitated exchange as of April 19, 2014 out of an estimated 549,205 individuals determined eligible to enroll in the exchange.  Nationally, HHS says that there are 13,547,592 eligible to enroll in an exchange and 8,019,763 have done so.

Comparing other surrounding states to PA,  New York’s state-based exchange enrolled 370,451 out of an eligible 707,638; New Jersey which, like PA has a federally-facilitated exchange enrolled 161,775 out of an eligible 301,965; West Virginia, a hybrid “partnership” exchange, enrolled 19,856 out of an eligible 36,749; Ohio’s federally-facilitated exchange enrolled 154,668 out of an eligible 285,967; Maryland’s state-based exchange enrolled 67,757 out of an eligible 99,298 individuals; and Delaware (hybrid “partnership” exchange) enrolled 14,087 out of an eligible 24,721 individuals. NOTE: HHS figures do not indicate who actually paid a premium.  Unknown also is how many of these individuals utilized a broker in the enrollment process.


  • On May 18, the PA Bulletin printed Rules and Procedural Requirements for Insurance Holding Company Systems which will become effective June 16, 2014.  They bring PA into compliance with the Model Rules issued by the National Association of Insurance Commissioners (NAIC) and were necessary to keep the NAIC accreditation of Pennsylvania as an insurance regulator.  https://www.pabulletin.com/secure/data/vol44/44-20/1035.html
  • Delaware placed DE-domiciled Freestone Insurance Company, a general liability, auto, and Workers’ Compensation insurer, into rehabilitation April 28, 2014.  It does business in most states including DE, MD and PA.  Freestone was formerly known as Dallas National Insurance Company.  Freestone’s telephone is 866/874-6860.  A link to the Delaware Insurance Department follows: https://www.delawareinsurance.gov/departments/berg/rehab_bureau_freestone.shtml
  • The PA Professional Liability Joint Underwriting Association (JUA), the insurer of last resort for medical malpractice insurance, announced that it does not intend to make any 2014 revisions to its rates and rules for health care providers.  This is regarded as another sign of stability in the medical malpractice market.
  • Tawa Associates, a private limited company organized under the laws of England and Wales, has filed an application to acquire control of Lincoln General Insurance Company.
  • The PA Insurance Department May 17 issued Notice 2014-05 General Guidance of Prescribed Differences from NAIC Statutory Accounting Principles.  Questions: Steve Johnson 717/783-2142 stjohnson@pa.gov   Details: https://www.pabulletin.com/secure/data/vol44/44-20/1065.html


HHS produced a May 13 slide show for agents and brokers planning to market the SHOP small business component of the exchange. https://www.regtap.info/uploads/library/SHOP_Slides_051314_v1_5CR_051614.pdf.  Among the resources presented were:

–          SHOPCallCenter 800/706-7893 prompt #5 for issuers

–          SHOP marketplace website https://www.healthcare.gov/small-businesses/

–          Employer SHOP application https://healthcare.gov/downloads/shop-employer-application.pdf

Internet enrollment in SHOP is slated to begin in November 2014.  This year, due to technical glitches with healthcare.gov, SHOP applications submissions were by hard copy.  In addition to the above, the US Department of Labor issued a small business insurance video called “Choosing a Health Plan for Your Small Business”, available at https://www.youtube.com/watch?v=fItfKmU6Jzk

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