LEG REG REVIEW 2014, 25th Issue October 6, 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.

 

MORE LEGISLATIVE UPDATES

As the tempo increases in the waning number of session days, there are additional legislative updates to track:

  • On September 24, the House Insurance Committee reported House Bill 1937 (Quinn-R-Bucks) to require life insurance companies to utilize the US Social Security Death Master File in order to effectively find beneficiaries of life policies.  The Insurance Department has concluded agreements with many major carriers to utilize the Death Master File but HB 1937 would require this for all life insurers.
  • Also on September 24, the Senate Banking & Insurance Committee reported out Senate Bill 1441 (Alloway-R-Franklin) which requires that bailbondsmen to hold a casualty line of authority (insurance license).  It attempts to be self-regulating to the extent that competitors may undertake a private cause of action and seek monetary damages from bailbondsmen not complying with certain provisions of the law.
  • The Senate Banking & Insurance Committee also reported out a bill to eliminate a requirement that the Insurance Department provide the General Assembly with a hard copy annual plan on Flood Insurance educational efforts (per Act 10 of 1996).  House Bill 1837 is sponsored by Rep. Tina Pickett (R-Bradford).
  • On September 24, the House Health Committee reported Senate Bill 1180 (Vance-R-Cumberland) which expands a centralized state system of monitoring prescriptions.  As it goes back on the House calendar for second consideration, there may still be time for the General Assembly to complete action on this bill before adjournment.
  • House Bill 2471 (Baker-R-Tioga) was re-referred to the House Appropriations Committee on September 24 after having been initially reported out of the House Health Committee September 16.  This would prevent insurance companies from placing oral anti-cancer medications on a specialty tier or charging a coinsurance payment for the medication.  The rationale is that there is a move towards improved oral medications but insurer plans treat oral as covered by a prescription plan with a potentially higher patient payment versus the intravenous drug which is covered by major medical.
  • The Senate declared September 2014 “Life Insurance Awareness Month” thanks to Senate Resolution 444 sponsored by Senate Banking & Insurance Committee Minority Chair Mike Stack (D-Phila.).  The 20 sponsors included eight Republicans and 12 Democrats.  Included were the Majority Chair of the Senate Banking & Insurance Committee Don White (R-Indiana) as well as Majority Leader Dominic Pileggi (R-Delaware) and Minority Leader Jay Costa (D-Allegheny).

 

SENATE BANKING & INSURANCE COMMITTEE MEETS

The Senate & Banking Committee will meet this week to consider two bills.  First up is Senate Resolution 458 (Corman-R-Centre) requiring that the Legislative Budget & Finance Committee study consumer access to short-term credit.  Second is House Bill 1436 (Truitt-R-Chester), a mandated benefit bill to require health insurer coverage of certain amino acid-based foods for certain children.  Some such as the PA Association of Health Underwriters (PAHU) took the position that adopting a mandated benefit regardless of intent could trigger a provision in the Patient Protection Affordable Care Act (PPACA) saying that the state must pick up the cost of additional mandates if they apply to exchanges.  Despite concerns raised by PAHU and several insurers, the bill will likely pass if there is enough time left on the calendar to do so given that it passed the House 203-0 despite insurance industry concerns.

 

INSURANCE DEPARTMENT TO HOLD PROPOSED NE MERGER HEARING

On November 12, the PA Insurance Department will convene a public informational hearing in Scranton on the proposed merger of Hospital Service Association of Northeastern PA d.b.a. Blue Cross of Northeastern PA with Highmark. Those wishing to receive an advance copy of the agenda should pre-register by November 5 (www.insurance.pa.gov). Those wishing to testify must pre-register by November 5.  Testimony will be allotted in ten-minute increments although presenters should note that there are two hearings with one beginning at 9:00 a.m. and the second at 7:00 p.m.  Details or guidance on submitting written comments .are available from Cressinda Bybee, Company Licensing Division, PA Insurance Department, 1345 Strawberry Square, Harrisburg, PA 17120 717/787-8557 FAX or cbybee@pa.gov.

 

REGULATORY UPDATE

  • Lehigh Valley-based Saucon Mutual Insurance Company is seeking permission from the PA Insurance Department to convert to a stock company.
  • Comment period on the proposed acquisition of OneBeacon Insurance Company, Potomac Insurance Company, OneBeacon America Insurance Company and Employers’ Fire Insurance Company will end October 17.  Comments go to Steven Yerger, Company Licensing Division, PA Insurance Department, 1345 Strawberry Square, Harrisburg, PA17120, 717/787-8557, syeger@pa.gov.
  • The Department of Public Welfare (DPW) to be re-named Department of Human Services per Act 132 of 2014 released its final bulletin on Preventable Serious Adverse Events (PSAEs) setting rules for payment and non-payments to county and nonpublic nursing facilities.  These took effect October 1, 2014 (www.pabulletin.com Volume 44, Number 37, page 5939).  This implements the Centers for Medicare & Medicaid Services (CMS) final rule prohibiting medical assistance payments for Preventable Serious Adverse Events (76 FR 32816 June 16, 2011/ 42 CFR 447.26) relating to non-payments for provider preventable conditions.
  • PA Health Care Cost Containment Council (PHC4) is required to list the 35 diseases, procedures, and medical conditions for which state law requires that it collects data to assist in comparing medical facility treatment outcomes.  (www.pabulletin.com, Vol. 44, Number 39, page 6171).
  • Arch Reinsurance, Ltd. has applied for designation as a certified reinsurer in PA.
  • Comment period has closed on the PA Compensation Rating Bureau (PCRB) proposed changes to its rate and rule manual:

–          Revisions to mapping of direct employment classifications into temporary staffing classifications (Codes 520-529)

–          Clarification of Code 892 pertaining to early intervention services

–          Use of decennial census data only as the basis for populations of areas served by volunteer fire companies (Code 994)

–          Manual language changes relating to tips for premium computation purposes in recognition of the IRS ruling on “Service Charges”.  Full text is available at www.pcrb.com in the Filings section.

 

FEDERAL INSURANCE OFFICE GIVES STATE REGULATORY ASSESSMENT

Federal Information Office (FIO) which was created by the Dodd-Frank law issued its second annual report on the insurance industry.  The FIO was charged with examining the state regulatory system for insurance and suggesting ways to standardize the current system or to recommend federal legislation that could supplant it.  LEG REG Review will run a summary later but for immediate access, please refer to

https://www.treasury.gov/initiatives/fio/reports-and-notices/Documents/2014_Annual_Report.pdf

 

CONDOLENCES to the family of former State Representative Dan Clark (R-Mifflin).  He passed away In September at the age of 59 after a battle with lung cancer.  He served as a Representative from 1989 – 2002.  One piece of insurance legislation he will be remembered for was a change to the Workers’ Compensation Act that made the WC premium discount for firms with certified worker safety committees permanent instead of expiring after five years (assuming that the L&I certification remains in effect). 

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