LEG REG REVIEW 2014, 21st Issue August 1, 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.



Published on July 26 was Governor Corbett’s Executive Order 2014-04 allowing for a transition period for the PA Health Care Cost Containment Council (PHC4).  This independent agency which reviews and compares hospital costs and outcomes lost its legislative authority July 1.  Although legislation has been introduced — Senate Bill 1267 (Vance-R-Cumberland) to reauthorize the PA Health Care Cost Containment Council (PHC4) until June 30, 2017– it still needs House concurrence before PHC4 can regain its legislative authorization.  The Executive Order means that staff may continue to function (get paid) and that all functions continue.  The PA Office of Administration, part of the Governor’s office, will provide administrative and technical support to PHC4 as needed.



HHS released the list and amounts of rebates mandated by the Patient Protection Affordable Care Act (PPACA) provision regarding Medical Loss Ratios (MLRs).  According to PPACA, insurers must pay out either 80 or 85 percent of premium income in claims depending on group size or be forced to issue a rebate to employers and to those with individual policies.  Self insured plans are exempt from the MLR requirement.  Following is the list for Pennsylvania.


Carrier                                    $$ Amount                   Type of Insurance

Aetna                                      825,437.00                  individual

Everence                                 118,462.00                  small group

Freedom Life                          46,476.00                    individual

Golden Rule                            1,658,973.00               individual

John Alden                              59,960.00                    small group

Mid-West Nat’l Life                 139,432.00                  individual

Monumental Life                    263,316.00                  large group

Nat’l Foundation Life              50,672.00                    individual

MEGA Life & Health             232,389.00                  individual

Time Insurance Co.                 1,537,970.00               individual

Trustmark Life                        265,786.00                  large group


Agents representing these carriers should familiarize themselves with how the rebates work since employers must refund or credit employees a prorate share of the premiums they paid.  In most cases, the carrier provides a credit to the employer for future premiums but the employer must still credit/refund part of the employees’ contribution.  If you need to be pointed in the right direction re how the MLR rebates work, please consult with Vince Phillips xenobun@aol.com



Per existing law, the accident surcharge dollar threshold cap has been adjusted to $1,550.00 effective July 1, 2014.  Insurers writing passenger auto insurance in PA may not by law penalize policyholders whose three-year aggregate claim costs (in excess of any deductible or self-insured retention) do not exceed that amount.  The Insurance Department must adjust the threshold (cap) every three years.






  • The Insurance Department July 23 re-opened its public comment period regarding the proposed acquisition of OneBeacon Insurance Company, Potomac Insurance Company, OneBeacon America Insurance Company, and the Employers’ Fire Insurance Company by Trebuchet US Holdings.  Filing and related materials are found at www.insurance.pa.gov. According to the Department, notice will be posted in the PA Bulletin when it decides to close the additional comment period and Leg Reg Review will publish the date as soon as it is known.  Details: Steven Yerger 717/787-8557 syerger@pa.gov
  • Beacon Health Visa Parent, Inc. and Beacon Health Vista Merger Sub. , Inc. and others filed an application to acquire Value Behavioral Health of PA, Inc., a Pennsylvania-domiciled risk-assuming preferred provider organization.
  • SIGN OF THE TIMES?  The Insurance Department received a rate filing from medical malpractice carrier Medical Protective Company which would NOT change rates January 1, 2015, a zero percent change!.
  • A document called Index of Issuances was released July 26.  It is a listing of all Governors’ Executive Orders and Management Directives dating back to 1973.  This Index must be dated every year and is published in the PA Bulletin www.pabulletin.com . 2014 updates include:

–          Executive Orders: Long-Term Care Commission (2014-1); PA Justice Network (2014-02); Marcellus Shale leasing in PA forest and park land (2014-04).  Executive Order 2014-04 as reported earlier kept the PHC4 in business.

–          Management Directives and Manuals: Disposal of Commonwealth Records (M210.9); Governance Structure of PA Justice Network (245.16); Emergency Evacuation (205.40); Worker and Community Right-to-Know (505.27); Agency Guide to Workplace Violence Prevention and Response (M505.6); Motor Vehicle Financial Responsibility (530.8); Eleven entries for State Employees’ Retirement System, all issued 4/7/14; Civil Service Notice (580.2); Removal of Eligibles for Certification or Appointment in the Classified Service (580.34).



Preparing for the advent of the new open enrollment period for the federally-facilitated marketplace (exchange) is the effort by HHS to convene various webinars and seminars.  Next up is August 14 in Philadelphia at the Hyatt, 200 South Broad Street.  Registration via https://www.seiservices.com/cmsmp2014/mp/ .  Insurance producers are invited to send in questions ahead of time.  Details: Gaye Humphrey at Gaye.Humphrey@cma.hhs.govOn July 28, 2014, HHS.gov sent out a “#Bornin88 Thunderclap!” to those turning 26 to say that leaving the under 26 dependent insurance coverage provision of PPACA means that they “may be” eligible to enroll for health insurance under a Special Enrollment Period.


NEWS AND NOTES…PA insurance agency Gilbert’s Risk Solutions of Sharon, PA was featured in the July 2014 issue of Rough Notes magazine.  Coverage focused on the agency’s efforts to assist clients in the wake of PPACA’s myriad of mandates and conflicting rules….Stu Rothenburg’s Political Report in Washington, DC listed several frontrunners in PA’s congressional races.  They are Republican Ryan Costello over Democrat Dr. Manan Trivedi in the 6th district (now held by retiring Jim Gerlach), Republican incumbent Mike Fitzpatrick in the 8th district over Democrat Kevin Strouse, and Democrat (and state representative) Brendan Boyle over Republican Dee Adcock in PA’s 13th district now held by retiring Allyson Schwartz who did not succeed in her did for the Democratic nomination for GovernorCONDOLENCES GO to the family of former PA Senator Hank Salvatore (R-Phila.) who passed away July 16 at the age of 92.  He served as State Representative from 1973-1984 and as PA State Senator 1985-2000.  PERSONAL NOTE:  This gentleman was a tremendous representation of chivalry and respect for all, including to those with whom he disagreed.  Next time, you’re in a restaurant, ask for Hank’s Root Beer — and yes, there is a connection — to toast his legacy.

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