LEG REG REVIEW GPAHU Edition 2017, 37th Issue November 27, 2017


On November 20, the House voted 194-0 to send House Bill 1388 (Irvin-R-Mifflin/Centre/Huntingdon) back to the Senate for concurrence.  The measure would extend the life of the Children’s Health Insurance Program (CHIP) until December 31, 2019, or ninety days after Federal funding for CHIP is no longer available.  What makes the issue more complicated is that the Senate added language partially reversing Governor Wolf’s addition of transgender transition to eligible CHIP coverage.  The House used a maneuver to revert to a prior Printer’s Number.  What this means is that HB 1388 went back to its original language without the transgender benefit restriction.  When the Senate returns to Harrisburg, it will have to decide which version it really wants since, without reauthorization, the CHIP will lose its ability to function after December 31, 2017.



The focus of the House this past week was on whether or not there should be a tax on Marcellus Shale natural gas extraction.  By week’s end, the PA House had only gone through slightly over a tenth of the 200-plus amendments.  Nonetheless, in addition to HB 1388 described above, there were still other legislative items of possible interest.

  • The House passed House Bill 1588 (Diamond-R-Lebanon) 191-0 on November 21 to require the Department of Aging on a monthly basis to cross reference its list of PACE/PACENET prescription drug beneficiaries with death records maintained by the Department of Health.
  • House Bill 1548 (Kristin-Hill –R-York) amends the PA Breach of Personal Information Act which became law in 2005.  Her bill updates the definition of personally identifiable information to include health and medical information and adds specific language to notices of privacy breaches which will include an offer of one year’s free credit monitoring.  It also adds a requirement that notices describe what steps are being taken to protect individuals’ information potentially affected by the breach.  This bill was re-referred to the House Commerce Committee November 20.
  • On November 15, Senate Bills 877 and 878 (White-R-Indiana) setting allowable rebates and inducements at $100 were referred to the House Insurance Committee.  If enacted, they would reverse long-standing PA laws such as the Unfair Insurance Practices Act (Act 205) which expressly prohibited the practice although the Insurance Department allows for minor gifts (“de minimus”). Senate Bills 877 and 878 join their House counterparts, House Bills 1841 and 1842 sponsored by Rep. Mike Tobash (R-Schuylkill), which also allow rebates and inducements up to $100, in the House Insurance Committee.



U.S. Middle District Chief Judge Christopher Conner issued a preliminary injunction preventing the state from dissolving the state’s medical malpractice insurer of last resort, the PA Professional Liability Joint Underwriting Association (JUA).  Part of this year’s budget was a plan for the state to take $200 million from JUA’s reserves to help balance the State Budget.  Included was a threat to dissolve the JUA if it did not hand over the money by December 1st.  If JUA wins, the State Budget will have a $200 million revenue hole for the current fiscal year.



As most know, the U.S. Senate tax reform bill includes another congressional attempt at voiding the Affordable Care Act penalty for not having health insurance (the Individual Mandate).  Just scratching the surface of this legislation, this summary of some of the provisions of the U.S. House and Senate tax overhaul bills was completed by Washington, DC law firm Holland & Knight’s Public Policy & Regulation Group and Taxation Team.  https://www.hklaw.com/practices/uniGC.aspx?xpST=PracticeList


In both House and Senate bills:

~ Corporate Tax Rate:  20% starting in 2018

~ Net Operating Losses: Eliminates net operating loss carrybacks; net operating loss carry forward deduction limited to 90% of taxpayer’s taxable income

~ Alternative Minimum Tax repealed

~ Repealed are certain Itemized Deductions for State and local taxes, unreimbursed employee expenses, and tax preparation fees

~ Interest Deduction limited to 30% of earnings before interest, tax, depreciation, and amortization


Differences between House and Senate bills:

  • Estate Tax Repeal:  Yes, by 2024 in House bill.  Both increase exclusion amount to $10 million.
  • Individual Tax Rates: House has four brackets, 12%, 25%, 35%, and 39.6%.  Senate has seven brackets, 10%, 12%, 22.5%, 25%, 35%, and 38.5%
  • Capital Gains:  House has zero percent in 12% bracket, 15% in 25% bracket; 20% in 35% bracket.  Senate has zero percent if income is $38,700 or less, 15% for income up to $426,700, and 20% for taxpayer with income over $426,700.
  • Standard Deduction: House has $12,200 for single taxpayer, $18,300 for heads of households, and $24,499 for married filing jointly.  Senate has $12,000 single, $18,000 heads of household, and $24,000 for married filing jointly
  • Itemized Deductions: House bill eliminates medical expenses deduction, certain property/casualty losses, and mortgage interest expense on acquisition debt of more than $500,000.



The PA Insurance Department has issued a number of resources and one consumer warning to those seeking to enroll in an exchange (“Marketplace”) plan for 2018.  First, the warning from Acting Insurance Commissioner Jessica Altman, “We have taken action against seven agents in the past 20 months who misrepresented limited benefit plans as complying with the ACA.  These plans leave the consumers who bought them liable for a tax penalty for not having an ACA-compliant health plan, ineligible for tax credits for which they may qualify with a compliant plan, and often on the hook for large medical bills because the plans do not cover pre-existing conditions, or all of the minimum essential benefits that must be covered by ACA.”  The Department also provides:



The annual Washington, DC Capitol Conference (CAP CON) sponsored by the National Association of Health Underwriters (NAHU) will take place February 26-28 with meetings with congressional offices on the 27th and 28th.  Link to NAHU follows: https://nahu.org/events/recurring-events/2018-capitol-conference

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