LEG REG REVIEW 2014, 27th Issue *** October 27, 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.



A good number of LEG REG REVIEW subscribers have asked about my condition after my brain surgery.  First, I want to thank everyone for their kind thoughts and prayers.  Recovery is going well although with most major medical procedures there are good days and better days.  I just want you to know how much I appreciate your being part of this little community that LEG REG REVIEW has built.  Although I am biased, I think it fills a niche not filled by any other insurance publication — PA specific legislative and regulatory information in a concise format.  I for one really appreciate your support and friendship.  Sincerely, Vince Phillips



Additional insurance legislation has been signed into law by Governor Corbett.

  • Act 158 of 2014/ House Bill 1436 (Truitt-R-Chester) is a mandated benefit bill specifying that health insurers cover costs of amino-acid based elemental formulas for children with severe food allergies who cannot consume normal foods.  It passed the Senate 48-2 and the House 192-0 before going to the Governor.  PAHU did raise a concern to legislators and to the Corbett Administration that adding a mandated benefit might trigger a provision in PPACA forcing the state to bear the additional costs if the exchange was included.
  • Acts 182 and 183/ Senate Bills 1356 and 1357 (Corman-R-Centre) streamlines transfers of policyholders’ homeowner and auto insurance from one affiliated carrier to another.  Current law dictates a termination first even though the insurance carriers are affiliated.
  • Act 169/House Bill 1907 (Saylor-R-York) requires that hospitals notify patients as to whether the hospitalization is admitted or simply ‘under observation’.  According to Rep. Saylor’s sponsorship memo, a purpose of this bill is to make sure patients know their status because “One problem with this status is many insurers (and Medicare) treat observation stays as outpatient care so patients may pay for tests, X-rays, or scans.  However, if the same procedures were done while being admitted to the hospital, the patient might only pay a single co-pay.  The stakes become larger for our senior citizens on Medicare since a hospital admission of at least three days is required before Medicare will pay for subsequent skilled nursing care or rehabilitation in a nursing home.  If a patient is in the hospital for three days before going to a nursing home, and one of those days was on observation, Medicare will not cover the nursing home expenses. “
  • Act 154/House Bill 573 (Fleck-R-Huntingdon) requires that a neighborhood electric vehicle REGISTERED OR OPERATED ON A HIGHWAY must be insured at $15,000 for injury to one person in any one accident, $30,000 for injury to two or more persons in any one accident and $5,000 for damage of property of others in any one accident.  The bill defines ‘neighborhood electric vehicle as a four-wheeled electric vehicle with maximum speed of 20-25 miles per hour.


MARKET NOTE: Lehigh Valley I Day will take place Thursday October 30 in Bethlehem.  The program is approved for five CE credits.  Details: Michelle Grace 610/657-3392 mngrace@rcn.com





These bills were sent to the Governor but have not yet been formally signed into law.

  • Senate Bill 1180 (Vance-R-Cumberland) strengthens the state system for prescription drug monitoring and gives health care providers electronic access to a patient’s prescription drug history.  After passing the Senate 47-2, the House 194-2, and the Senate 46-2 (concurrence with House amendments), the bill was signed in the Senate October 16.  Once signed in the House, it was sent to the Governor October 20.
  • Sent to the Governor October 23 was House Bill 1846 (Quinn-R-Bucks), a Workers Compensation bill addressing the issue of some doctors possibly obtaining more WC monies than they are entitled to because of prescription coding.  HB 1846 requires that physicians use the original manufacturer’s National Drug Code (NDC) number and not use a repackaged NDC number.  Reimbursement for prescriptions would be limited to 110 percent of the average wholesale price of the drug. PA Compensation Rating Bureau would calculate the savings to the WC system from this law within 18 months after enactment.



A number of pieces of legislation almost made it to the finish line before end of session.  Not to worry though. Many bills take more than one session to finally succeed and these will likely be reintroduced next year.


  • Flood Insurance: House Bill 1837 (Pickett-R-Bradford) would eliminate a requirement that the Insurance Department provide an annual hard copy report to the General Assembly on the National Flood Insurance Program’s utilization.  It passed the House 197-0 and was reported out by the Senate Banking & Insurance Committee September 24, 2014.  It was tabled in the Senate and did not see a final vote.
  • Drug Parity: House Bill 2471 (Baker-R-Tioga) would prohibit insurance policies from placing oral anti-cancer medications on a specialty tier or charging a coinsurance payment.  Rep. Baker maintains that oral cancer drugs are effective and insurer reimbursement should not be skewed towards more traditional intravenous anti-cancer treatment.  It passed the House 195-1 but did not move past the Senate Banking & Insurance Committee.
  • Bondsman: Senate Bill 1441 (Alloway-R-Franklin) would require bail bondsmen to hold a casualty line of authority (insurance license).  It passed the Senate 50-0 but did not make it through the House Judiciary Committee before the session’s end.
  • Reciprocal to Stock Conversion: House Bill 2340 (Kampf-R-Chester) would establish a process where medical malpractice reciprocals (private unincorporated insurers consisting of members -doctors- who insure each other through payment of premiums and sharing of risks) could convert to stock companies.  HB 2340 passed the House 202-0 but was tabled in the Senate.



  • The Insurance Department issued Notice 2014-11 reminding health insurers not to forget about the Commonwealth’s regulatory authority where the Patient Protection Affordable Care Act (PPACA) has not pre-empted state law.  Some of these areas include consumer complaints, network adequacy, contract review, credentialing etc.  Details: Carolyn Morris camorris@pa.gov
  • Stock casualty Ashmere Insurance Company submitted a request to redomesticate from Illinois to Pennsylvania.  At the same time, Delaware-based Agency Bonding Captives, Inc. filed an application to acquire Ashmere.
  • An application for designation as Certified Reinsurers was received by the Insurance Department from Bermuda-domiciled Swiss Reinsurance Company, Ltd.

On October 25, the PA Bulletin published a list of PA statutes which dictate to PA insurers the Insurance Department’s financial report requirements in accord with NAIC Statutory Accounting Principles.  Details: https://www.pabulletin.com/secure/data/vol44/44-43/2223.html

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