LEG REG REVIEW 2014, 1st Issue January 13, 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.

 

GENERAL ASSEMBLY RESUMES ACTIVITY

This week the General assembly returns from its holiday recess to face a number of difficult issues.  The State Budget begins to take center stage because of a dismal mid-year budgetary assessment released by the Corbett Administration in December leading to the February 4 release of Governor Corbett’s proposed Fiscal Year 2014-15 State Budget.  Other issues with traction include work on pension reform and possible re-examination of liquor store privatization.  Among Senate calendar items are:

–          Senate Bill 1189 (Eichelberger-R-Blair) providing for required bonds for public sector construction

–          Senate Bill 1195 (Gordner-R-Columbia) regarding solvency of the Uninsured Employers’ Guaranty Fund (UEGF) within the Workers’ Compensation system.  UEGF pays for worker injuries if the employer did not carry Workers’ Compensation insurance.

 

TREASURY EXEMPTS VOLUNTEER FIRE FROM PPACA

A January 10 statement issued by Assistant Treasury Secretary for Tax Policy Mark Mazur said that the Patient Protection Affordable Care Act employer mandate does not extend to volunteer fire companies.  This explanation responded to fears raised across the political spectrum from conservatives like US Rep. Lou Barletta (R-11) to liberal US Rep. Allyson Schwartz (D-13) who is seeking the Democratic nomination for Governor.  These concerns were that despite the voluntary nature of volunteer fire companies, they would be treated as employers for the purpose of mandating health insurance coverage in 2014.  Barletta introduced federal legislation exempting the fire fighters and PA House Resolution 584 (Denlinger-R-Lancaster) was passed by the House December 16 by a vote of 198-0 requesting that Congress clarify the situation through passage of HR 3685 which exempts volunteer fire fighters and EMS personnel from PPACA’s purview.

 

FLOOD INSURANCE HEARING JANUARY 28

A joint hearing of two Senate committees will focus on the impact recent federal flood insurance reform law has had on Pennsylvanians.  The Senate Banking & Insurance Committee and Senate Environmental Resources & Energy Committee will receive testimony on rate hikes made possible by congressional passage of the 2012 Biggert-Waters Act which initiated a number of changes to the National Flood Insurance Program (NFIP) to make it function more like an insurance company.  Some of these provisions include permitting reinsurance to meet catastrophic losses (think Katrina, Sandy, and Irene), establishing a reserve fund, and premium rate flexibility.  It is premium rate hikes which have generated huge concern because property owners have been faced with steep premium increases since October 1 because the NFIP now can increase rates 20% or can end  pre-Flood Insurance Rate Map pre-FIRM) grandfather status on some properties which artificially kept premiums low.  Environmental Resources & Energy Committee Chairman Senator Gene Yaw (R-Lycoming)’s district is flood-prone and constituents have pointed to their economic hardship resulting from premium escalation.  On the federal side, IFAwebnews.com reported on January 10 that US Senate advocates of imposing a delay in rate increases under the Biggert-Waters Flood Insurance Reform Act of 2012 will push for a procedural vote this coming week which would pave the way to Senate passage.  S. 1846 has 20 Democratic and eight Republican sponsors.

 

MEDICAID HEARINGS CONCLUDE

On January 9, the Corbett Administration and the PA Department of Public Welfare concluded a series of hearings on the Governor’s request for an HHS waiver on Pennsylvania’s Medicaid program which, if accepted by the Federal Government, would make hundreds of thousands of individuals under 133% of the Federal Poverty Level able to enroll in the federally-facilitated exchange.  The Administration points out that this would not be expanding Medicaid eligibility per the Patient Protection Affordable Care Act (PPACA).  Rather, it would revamp Medicaid from what it is now.  Among other things, the Corbett waiver request would consolidate the number of Medicaid plans, require a minimal premium for many on Medicaid ($25/month individual and $30/month for a family), and require an employment search for non-disabled Medicaid recipients.   Hearings are required as part of a petition to HHS from a state seeking a waiver from Medicaid rules.  Details: https://www.dpw.state.pa.us/healthypa/index.htm

 

SENATOR WAUGH LEAVES NOW

Senator Michael Waugh (R-York) is leaving office immediately rather than waiting until the end of his term in November 2014.  His departure creates a vacancy in the position of Majority Caucus Chairman.  Elected in 1998, he is the former chairman of the Senate Agriculture & Rural Affairs Committee.  One of his legislative accomplishments was sponsorship of a major overhaul of the state’s Uniform Construction Code.  The remainder of his term will be filled by a special election.  Local businessman and conservative Scott Wagner already announced for the open seat this fall and is likely to try for the special election as well.

 

REGULATORY UPDATES

  • The accident surcharge threshold has increased to $1,550.00 effective July 1, 2014.  This means that an auto insurer may not impose a surcharge if aggregate claims do not exceed that amount in a three-year period.  It is measured in excess of any deductible or self-insured retention and is annually adjusted per the law.
  • The Pennsylvania eHealth partnership Authority, the entity created to develop an electronic preventive services database (designed to reduce numbers of duplicative tests), issued its legally required annual financial report.  According to the report, it took in $13.6 million, spent $10.7 million and has a cash balance of $2.9 million.
  • On January 11, the PA Department of Labor & Industry published the new Statewide Average Weekly Wage for Workers’ Compensation purposes of $932.00 per week for injuries occurring after January 1, 2014.  This was a 1.6% increase over 2013.

 

MORE PPACA GUIDANCE

HHS on January 9 issued the latest in a series of Frequently Asked Questions on PPACA.  This set includes questions on Coverage of Preventive Services, limitations of cost-sharing (maximum out of pocket costs), expatriate health plans, wellness programs, fixed indemnity insurance (excepted benefits), and implementation of the Mental Health Parity and Addiction Equity Act of 2008.  The FAQs were jointly issued by HHS, IRS, and the US Department of Labor, on whose website they appear.  www.dol.gov/ebsa/faqs/faq-aca18.html

 

PPACA NOTES

  • PA Association of Health Underwriters (PAHU) is holding a Briefing for legislators and staff January 29 in Harrisburg.  It will focus on federally-facilitated exchange (marketplaces) operations in Pennsylvania.  Navigator registration legislation will be included.
  • The Center for Medicare and Medicaid Services (CMS) announced January 11 that it has fired IT firm CGI Federal because of problems connected with the faulty roll-out of healthcare.gov.  The new vendor is Accenture which now has a two-year $90 million contract.

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