LEG REG REVIEW 2015, 17th Issue June 1, 2015

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.



On May 28, Wolf Administration officials outlined their plans to move to a state-based exchange should the US Supreme Court rule against the Obama Administration to say that those in federally-facilitated marketplaces (FFMs) like Pennsylvania’s 280,000 enrollees would lose their tax subsidy because of wording in the original Patient Protection Affordable Care Act (PPACA) law.  Calling it a Supported State-Based Marketplace, Insurance Commissioner Teresa Miller and Department of Human Services Secretary Ted Dallas, said that (assuming HHS approval), Pennsylvania would manage the exchange but would use healthcare.gov as the operating platform.  Miller suggested that other state-based exchanges were hindered by technology-related problems. PA could fund the venture by levying the premium assessment (currently 3.5%) now used to fund the federally-facilitated marketplace states.  In fact, she said, depending on what the Federal Government would charge to lease access to healthcare.gov, the premium assessment might be lower if Pennsylvania became a Supported State-Based Marketplace.  She also noted that this marketplace hybrid does not have functional rules established by HHS as to how it would operate.


Thus far, PA sent an intent letter to HHS May 1 and a blueprint for the transition June 1.  Emphasized however was that these steps were taken as a contingency because of the Supreme Court and that the General Assembly would still need to pass enabling legislation.  PAHU asked the question as to whether or not Pennsylvania’s management of the Supported State-Based Marketplace meant that broker access issues with healthcare.gov would be resolved.  The answer was that the Wolf Administration would be a conduit for broker concerns and suggestions to the Federal Government.



With the General Assembly back for June’s State Budget Gauntlet, there is no shortage of other legislative activity as well including House action on SB 293 (navigator legislation).  In addition, a number of committees look at insurance issues this week:

  • A confirmation hearing convened by the Senate Banking & Insurance Committee June 2 for Acting Insurance Commissioner Teresa Miller.  When reported out of committee, the full Senate would take up confirmation of Governor Wolf’s nominee.
  • Act 46 hearing convened by the House Veterans Affairs & Emergency Preparedness Committee looking at the impact on insurance affordability to municipalities providing Workers’ Compensation for firefighters.  Act 46 included cancer as an occupational disease for firefighters (with conditions) under the Workers’ Compensation law.  Some municipalities have suggested that insurance premiums skyrocketed because this insurance is only available through the State Workers’ Insurance Fund (SWIF), the Workers’ Compensation insurer of last resort.
  • The House Insurance Committee meets to consider Senate Bill 494 (Ward-R-Westmoreland) eliminating a requirement that the Insurance Department provide a hard copy report on Flood Insurance numbers to the General Assembly.  The House had earlier passed House Bill 717 (Pickett-R-Bradford) on April 13 which does the same thing.
  • Acting Secretary of the PA Department of Environmental Protection (DEP) John Quigley has his confirmation hearing before the Senate Environmental Resources & Energy Committee. Revenue Secretary nominee Eileen McNulty gets her turn before the Senate Finance Committee.



Another member of the General Assembly is leaving mid-term.  Allegheny County Democratic Senator Matt Smith is resigning in June to head the Greater Pittsburgh Chamber of Commerce.  Senator Smith is the minority chair of the Senate Banking & Insurance Committee.  No date for a special election has been set.



Recognizing the importance of Mutual Insurance Companies in meeting consumer and community needs and providing economic benefits to the Commonwealth, House Insurance Committee Chair Rep. Tina Pickett (R-Bradford) introduced House Resolution 360 declaring June 8 to be Mutual Insurance Day.  The resolution is presented in conjunction with the annual Day on the Hill sponsored by the PA Association of Mutual Insurance Companies (PAMIC).



In response to a query to the Independent Fiscal Office (IFO) by Andrew Crompton, Chief of Staff for Senate President Pro Tempore Joe Scarnati (R-Jefferson), the IFO analyzed a “sales tax applied to the purchase of securities — stocks, bonds, derivatives, mutual funds…and other financial instruments.”  The IFO said that the United States does not impose such a tax but that the Securities and Exchange Commission (SEC) imposes a transaction fee on securities transactions which garners $1.7 billion to fund the SEC’s oversight.  The report concludes that positive revenue impact of a financial transaction tax would be minimal and that the result would be to move transactions outside of Pennsylvania and that the Philadelphia exchange might have to move elsewhere.  The IFO letter was made in response to “some local elected officials in Pennsylvania” which support such a tax.



In a May 15 letter to the Internal Revenue Service, 23 national insurance, union, and business organizations said that imposition of the Patient Protection Affordable Care Act (PPACA)’s Cadillac Tax will jeopardize the health care coverage of more than 151,000,000 Americans.  It said that adopting a broad definition of applicable coverage “drives employers to eliminate coverage for benefits that provide valuable financial and health security.”  The letter took particular aim at the suggestion that wellness programs would be included in the calculation of the Cadillac Tax, a move that undercuts PPACA’s stated priority of promoting these programs.  Among the signers were the major insurance producer organizations, National Association of Health Underwriters, National Association of Insurance & Financial Advisors, Independent Insurance Agents & Brokers of America, Professional Insurance Agents, and the Council of Insurance Agents & Brokers.  National broker Willis signed as did MetLife.



  • Before recessing in May, the Senate voted 48-0 for Senate Bill 622 (Mensch-R-Lehigh/Montgomery) to remove the requirement that the Legislative Budget & Finance Committee do a cost benefit study of mental health insurance coverage every 2 years.
  • Considered by the Senate Banking & Insurance Committee June 2 is Senate Bill 747 (Vogel-R-Beaver) requiring that the Insurance Commissioner do a study listing amounts of punitive damages paid by the following in the last 10 years; 1) physicians 2) long-term care nursing facilities licensed by the Department of Health and 3) personal care homes licensed by the Department of Human Services.  Also to be considered is Senate Bill 861 (White-R-Indiana) to clarify which auto insurance covers loaner vehicles when a car is being serviced.  This legislation requires the customer’s personal auto insurance policy to be responsible for third party damages and, within the limits of the driver’s policy, physical damages to the loaner vehicle. Likewise, when the dealer has custody of the customer’s vehicle, the dealership’s policy shall be liable for third party damages and damages to the customer’s automobile up to the limits in the customer’s personal auto insurance policy.

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