bpag insurance bulletin 2-6-15

8/9/2019 BPAG Insurance Bulletin 2-6-15

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Legislative Report

February 6, 2015 BOSE PUBLIC AFFAIRS GROUP INSURANCEBULLETIN XV, NUMBER 3

In This Issue

General Assembly Overview Sales Tax on Services Various Tax Matters IPEP Unclaimed Life Insurance Benefits IDOI Bill Privacy: Breach of Security

HERO Plans Dental and Optometry Service

Coverage

Use of Investigational Drugs

Telemedicine

Coverage of Prescription Eye Drops

Inmates and Medicaid

Medical Malpractice

No Pay, No Play

TNC’s

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Indianapolis, IN 46204317-684-5400 www.bosepublicaffairs.com

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GENERAL ASSEMBLY OVERVIEW

As the legislature began the second quarter of session this week,

many bills were moving through committees and on the House and

Senate floor. The week wrapped up on Thursday with a controversial

bill in the House, HB 1609. HB 1609 provides that the members of the

State Board of Education shall annually elect their own chairperson

from the members of the state board. Current law provides that the

Superintendent of Public Instruction serves as chair of the board.

Democrats offered several amendments to HB 1609 on second

reading, all of which were defeated. Since Superintendent Glenda

Ritz (D) was elected in 2012, the State Board of Education has

become politically-charged.

Following the second reading of HB 1609 in the House, Governor

Pence released the following statement: “For the sake of our kids,

education in Indiana must function at the highest levels. Our

administration took the first step to restore harmony in education

governance by dissolving the Center for Education and Career

Innovation, and we called on the General Assembly to give

members of the State Board of Education the opportunity to choose

their own Chair. By advancing HB 1609 on the House floor today,members of the General Assembly took an important step toward

achieving this reform. I applaud Representative Jud McMillin for his

efforts in moving this important legislation and urge members to

support HB 1609 when it comes to the floor next week.” HB 1609 will

be up for a third reading vote in the House next week.

The House Ways & Means Committee has been meeting almost daily

and will continue to do so up to the House committee report

deadline on February 20. The Governor’s tax bill was up for a hearing

this week, HB 1349. HB 1349 is an effort to address an administration

goal of tax simplification. Although the author, Rep. Todd Huston (R-

Fishers), presented the bill as revenue-neutral, there are tax shiftsamong various sectors of the economy. One area of focus addresses

the elimination of the double direct test for the gross retail tax

exemption. The bill specifies that the exemption applies if the

tangible personal property is acquired for direct use or consumption

in the production of tangible personal property when the person

acquiring the property is occupationally engaged in the business of

producing tangible personal property. The bill also eliminates the

taxation of income that is attributed to a state that does not have an

income tax, known as the "throwback rule".

Although HB 1349 exhibits tax savings among some sectors of the

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economy, there remained opposition to some of the proposals. One

such proposal adopts the sourcing of income using market based

sourcing. The bill changes the apportionment of sales of services or

intangibles from a cost of production method to a market-based

sourcing method. Since corporate income is apportioned to Indiana

based solely on a corporate taxpayer’s sales, the difference in the

method of sourcing the sales could have a significant impact on

corporate taxpayers, specifically the telecommunications and cable

industry. The bill will generally increase the tax liabilities of corporate

taxpayers that are out-of-state service providers and generallydecrease the tax liabilities for corporate taxpayers that are engaged

in service producing business in Indiana.

HB 1349 is a work in progress and will be up for committee

amendments next week in Ways & Means.

Two full weeks of committee hearings remain in the House and

Senate before committee reports must be adopted, February 20 in

the House and February 19 in the Senate. The state budget bill, HB

1001, will be heard soon in the House Ways & Means Committee.

Another bill drawing major attention, HB 1624 which deals with

Sunday sales of alcohol, will be heard on Wednesday, February 11 inthe House Public Policy Committee.

The House and Senate first-half of session deadlines are as follows:

- Second reading deadline: February 24

- Third reading deadline: February 25

- Halftime break: February 26-27

- Session reconvenes: March 2

Concluding the week in Indiana politics, President Barack Obama

made a trip to Indianapolis on Friday to participate in a town hall

discussion to highlight the benefits of Indiana’s statewide community

college system. The President’s town hall is part of a national tour toadvocate free community college for many students.

SALES TAX ON SERVICES

Sen. Michael Young (R-Indianapolis) has filed SB 560, which allows for

sales tax to be imposed on all transactions except for legal services,

health or mental health services. The bill also eliminates property

taxes on primary residences (homesteads) and business personal

property. The bill has been assigned to the Senate Tax & Fiscal

Committee but has yet to be scheduled for a hearing.

VARIOUS TAX MATTERS

HB 1349, authored by Rep. Todd Huston (R-Fishers), eliminates

numerous tax credits and deductions. In particular, it eliminates

several deductions available to the insurance industry relative to

patent exemptions, disaster area expenditures, certain stock losses,

qualified refinery property, qualified film or television production and

the E-Verify program.


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The bill will likely be heard again next week in House Ways and

Means.

POLITICAL SUBDIVISION RISKMANAGEMENT

HB 1298, authored by Rep. Jerry Torr (R-Carmel), permits the Indiana

Public Employer ’s Plan (a nonprofit, self-funded Workers’

Compensation program for Indiana public entity employers) to

convert to a mutual insurance company, subject to approval by the

Indiana Department of Insurance. The bill was heard in the House

Insurance Committee on Wednesday. Some technical issues arose

during committee regarding the process for conversion.

Accordingly, the Chairman held the bill until next week.

UNCLAIMED LIFE INSURANCE BENEFITS

SB 425 will require only those companies who engaged inasymmetrical DMF searches prior to July 1, 2015, to perform DMF

searches on all in-force policies, annuity contracts and retained asset

accounts. However, if a company did not engage in asymmetrical

searches, then they only have to conduct DMF searches on policies,

annuity contracts and retained asset accounts entered into after July

1, 2015. It also removes the fuzzy match requirement.

SB 425 could be problematic because it treats companies differently

with respect to when DMF searches need to be conducted based

upon prior conduct.

The bill is scheduled to be heard on Thursday, February 19th at

9:00am, in the Senate Insurance and Financial Institutions Committee

(Room 130).

IDOI BILL

HB 1341, authored by House Insurance Chairman Matt Lehman (R),

does the following: Corrects a conflict concerning payment of

expenses of the department of insurance (department) from the

general fund. Amends the law concerning internal audits of domesticinsurer and insurer group financial statements. Requires an insurer or

insurance group to file with the commissioner of insurance an annual

corporate governance disclosure. Specifies requirements concerning

use and disclosure of information related to the annual corporate

governance disclosure.

Removes a requirement for placement of the insurance

commissioner's (commissioner) signature on approval of a proposed

insurer. Defines "designated home state license" and provides for the

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licensure for certain out of state insurance producers. Specifies a

designated home state license fee. Adds certain: (1) guarantees

made by an insurer; and (2) acquisitions or investments; to the list of

transactions between a domestic insurer and another person in an

insurance holding company system that require prior notice to the

commissioner.

Further, it repeals and replaces a section of the public adjuster law

concerning public adjuster violations and penalties. Excludesinformation related to title insurance from the law concerning

electronic posting or delivery of insurance notices and documents.

Removes a requirement that a policy insure more than four

automobiles for purposes of application of the law concerning

cancellation of automobile insurance policies. Provides for issuance

of group casualty and liability insurance in certain circumstances.

Amends the definition of "small employer" to conform to federal law.

Provides for registration renewal annually on the last day of the

month of issuance, rather than on June 30 of each year, for claim

review agents and utilization review agents. Removes an annual

reporting requirement by the police benefit fund to the departmentof insurance.

The bill was heard on second reading in the House on Tuesday. An

amendment was adopted on second affecting the long term care

partnership law to provide that when an asset disregard adjustment is

being made for purposes of Medicaid eligibility, if the assets owned

by the individual's spouse are included in the individual's eligibility

determination, then the assets of the individual’s spouse need to be

included in the asset disregard determination.

As amended, the bill passed out of the House unanimously. The billwill likely be assigned to the Senate Insurance & Financial Institutions

committee with an expected hearing date during the first or second

week of March.

PRIVACY: BREACH OF SECURITY

Sen. Jim Merritt (R-Indianapolis) has introduced SB 413, which amends

IC 24-4.9 concerning the breach of the security of data that includes

the personal information of Indiana residents and that is collected

and maintained by a person other than a state agency or the judicial or legislative department of state government.

In pertinent part, the bill specifies that the statute is not limited to

breaches of computerized data; requires a data user to post certain

information concerning the data user's privacy practices on the data

user's Internet web site; increases the amount of the civil penalty that

a court may impose in an action by the attorney general; sets forth

certain information that a data owner must include in a disclosure of

a security breach; and specifies the applicability of different

enforcement procedures available to the attorney general under the

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statute.

From an insurance perspective, the bill does not appear to apply to

those companies already complying with numerous federal laws

governing data security. However, the proposed language has

raised a lot of questions regarding compliance. The bill is scheduled

to be heard in Senate Homeland Security and Transportation

Committee on Tuesday, February 10th at 9am.

HERO PLAN

HB 1279, authored by Rep. Matt Lehman (R-Berne), establishes a

state-assisted retirement plan for private employers and employees.

Provides that a newly created state board will oversee the plan and

the manager of the plan will be contracted out to a third party.

Employers can participate in the plan only if the employer does not

offer its employees a pension or retirement system of any kind. Sen.

Greg Walker has filed SB 555, a companion to HB 1279.

Interested parties are still continuing to work with Rep. Lehman and

Sen. Walker on creating a retirement planning portal to serve as a

connector for providers and consumers which could be hosted on

the State Treasurer’s website.

DENTAL AND OPTOMETRY SERVICECOVERAGEHB 1063, authored by Rep. Ron Bacon (R-Chandler), prohibits dental

and vision insurers and health maintenance organizations from

requiring dentists and optometrists to accept certain payments unlessthe health care services are covered services. The bill also prohibits

dentists and optometrists from charging for noncovered services an

amount that exceeds the usual and customary charges for the

services. HB 1063 still has not received a hearing.

USE OF INVESTIGATIONAL DRUGS,

BIOLOGICAL PRODUCTS, AND

DEVICESHB 1065, authored by Rep. Wes Culver (R-Goshen), received an initial

hearing this week in the House Public Health Committee. HB 1065

provides that a manufacturer of an investigational drug, biological

product, or device may make the drug, biological product, or

device available to a patient who meets certain requirements. The

bill also adds to the requirements concerning experimental or

nonconventional medical treatment the authority to allow a patient

to receive an experimental or nonconventional medical treatment if

a physician determines that the patient: (1) has been diagnosed with

a terminal disease or condition; and (2) does not have comparable

or satisfactory treatment options.

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HB 1065 was heard again on Wednesday in the House Public Health

Committee. The bill passed unanimously out of the committee and

included an amendment which indicates that the proposed law

does not create a cause of action against a physician, pharmacist,

or hospital for the use of an investigational drug, biological product,

or device by a patient for any harm to the patient from the drug,

product or device.

COVERAGE OF TELEMEDICINESERVICESHB 1451, authored by Rep. Steve Davisson (R-Salem), includes

telemedicine services within the health care consent law. The bill

provides for coverage of telemedicine services under a policy of

accident and sickness insurance and a health maintenance

organization contract. HB 1451 was heard this week in House Public

Health. After extensive testimony, the bill was held in committee last

week and has yet to surface again.

COVERAGE OF PRESCRIPTION EYEDROPSSB 26, authored by Sen. Pat Mille r (R-Indianapolis), was heard in the

Senate Health & Provider Services Committee this week where the bil

was amended and approved by the committee by a vote of 8-0. The

bill now requires that beginning January 1, 2016, certain state

employee health plans, policies of accident and sickness insurance,

and health maintenance organization contracts must cover refills

and additional units of prescription eye drops under specifiedconditions. This bill came as a result of the interim committee on

public health, behavioral health, and human services.

SB 26 is estimated to increase state expenditures between $51,000

and $131,000 during CY 2016. This increase is attributable to (1)

additional expenditures between $50,000 and $80,000 for changes to

the state employee health plan and (2) additional expenditures of

$51,000 to financing state-mandated coverage for prescription eye

drops under the federal Affordable Care Act (ACA).

SB 26 passed the full Senate on third reading last week by a vote of

50-0. House Public Health Committee Chairman Rep. Ed Clere will

sponsor SB 26 in the House.

INMATES AND MEDICAIDIn an effort to address the cost of inmate healthcare, Sen. Pat Miller

(R-Indianapolis) has introduced SB 212. SB 212 was approved by the

Senate Corrections & Criminal Law Committee this week by a vote of

8-0. This bill makes the Department of Correction (DOC) an inmate's

authorized representative for applying for Medicaid for inmates who

are potentially eligible for Medicaid and who incur medical care

expenses that are not otherwise reimbursable. The bill requires the

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DOC and the Office of the Secretary of Family and Social Services

(FSSA) to enter into an agreement in which the DOC pays the state

share of the Medicaid costs incurred for the inmate.

The bill also allows a sheriff to apply on behalf of a lawfully detained

individual for Medicaid and act as the person's Medicaid

representative if the sheriff enters into an agreement with the FSSA to

pay the state share of the Medicaid costs incurred for the person.

SB 212 remains on third reading in the Senate.

MEDICAL MALPRACTICETwo bills dealing with medical malpractice have been filed this year:

SB 55, authored by Sen. Brent Steele (R-Bedford), and HB 1043,

authored by Rep. Jerry Torr (R-Carmel). As introduced, each bill varies

in detail.

SB 55, as amended on second reading in the Senate on Monday,

permits a patient to bring an action against a health care provider

without submitting the complaint to the medical review board if the

amount of the claim is not more than $45,000 for claims filed before

July 1, 2020. (Under current law, a patient may bring a direct actiononly if the amount is not more than $15,000). The IDOI is charged

with determining the threshold amount beginning 7/1/20 and every

five years thereafter.

HB 1043 increases the medical malpractice cap from $1,250,000 to

$1,650,000 for claims arising after June 30, 2015 and increases the

maximum amount of liability for a health care provider or a health

care provider's insurer from $250,000 to $300,000. This bill has yet to

be scheduled for a hearing.

NO PAY, NO PLAYHB 1192, authored by Rep. Kevin Mahan (R-Hartford City), provides

that an uninsured motorist is not entitled to collect non-economic

damages when involved in a motor vehicle accident. The bill was

heard again on Wednesday in the House Insurance Committee. The

Chairman decided to hold the bill again since the author was

unavailable to attend the hearing.

TRANSPORTATION NETWORK

COMPANIESSen. Carlin Yoder has filed SB 347, which requires TNC’s (e.g., Uber) to

obtain a permit issued by INDOT in order to operate in Indiana. The

bill establishes numerous requirements necessary for a TNC to obtain

a permit, including insurance requirements. The bill passed out of

committee this week and is scheduled for third reading in the Senate

on Monday.

Rep. Matt Lehman’s competing bill, HB 1278, limits its application to

specific insurance requirements for TNC’s and TNC drivers. The bill

passed the House floor unanimously on Tuesday.

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Legislators, TNC’s and the insurance industry continue to work toward

a compromise on the phase 1 coverage issues.

For more informationTrent Hahn

[email protected]: 317/684-5400

Fax: 317/684-5432

bpag insurance bulletin 2-6-15

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