Legislative Report

January 24, 2014 BOSE PUBLIC AFFAIRS GROUP INSURANCE BULLETIN XIV, NUMBER 3

In This Issue

GENERAL ASSEMBLY OVERVIEW

The marriage debate dominated the headlines this week. House Joint Resolution 3, originally assigned and heard in the House Judiciary Committee, was removed from Judiciary by Speaker Bosma and reassigned to the House Elections Committee. The House Elections Committee heard hours of testimony after this rare procedural move occurred due to lack of yes votes in the House Judiciary Committee. HJR 3 continues to be the most polarizing issue at the Statehouse. The bill will be up for second reading amendment on the House floor next week. Legislation on a redistricting commission passed the House this week and has been referred to the Senate. House Bill 1032, authored by Rep. Jerry Torr (R), establishes a redistricting commission to create, hold hearings on, take public comment about, and recommend plans to redraw general assembly districts and congressional districts. The redistricting commission would be in charge of drawing maps for the House, Senate and congressional districts. The Senate was in session on Friday of this week to move more bills out of committees and onto the Senate floor for consideration. Committee deadlines are quickly approaching next week. Tuesday, January 28 marks the House committee report deadline. Wednesday, January 29 is the Senate committee report deadline. The halfway point of session will occur after February 5. We expect a significant amount of bills to die due to not receiving a committee hearing. As such, next weeks bill track list will be reduced from this weeks bill track. Although the HJR 3 debate continues to dominate the news and public discussion, we are extremely active in all committees monitoring and advocating on your behalf. Follow Bose Public Affairs Group on Twitter Get timely updates on the legislative session by following the Bose Public Affairs Group on Twitter @BosePAG or visit http://www.twitter.com/bosepag

General Assembly Overview Unclaimed Life Insurance Benefits Group Life Insurance Beneficiary Electronic Delivery of Insurance Notices and Documents Motor Vehicle Financial Responsibility Pollution Exclusion Lawsuit Lending Workers Comp Abortion Coverage Mandate Amended Rx Cost Sharing Bill Dies in House No Hearing for Medicaid Expansion Bill House Considers High Cost Program Study Welfare Drug Testing Bill on the Move Biosimilar Bill Passes Senate Committee

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UNCLAIMED LIFE INSURANCE BENEFITS

SB 220, authored by Sen. Travis Holdman (R), requires insurers to use the SSAs Death Master File or a database as inclusive to help with the accurate administration of unclaimed death benefits. An amendment was adopted on second reading in the Senate that would apply the bill prospectively for policies issues in Indiana after June 30, 2015. As amended, the bill passed the Senate today by a vote of 45-0.

GROUP LIFE INSURANCE BENEFICIARY

HB 1094, authored by Rep. Bob Heaton (R) and Rep. Dick Hamm (R), allows a key employee (as defined under federal law) insured under an employer group life insurance policy to name the employer as a beneficiary. Because of ERISA, federal tax and underwriting concerns with this concept, the bill is not moving forward this session.

IDOI BILL
HB 1206, authored by House Insurance Chairman Matt Lehman (R), does the following: (1) removes a requirement for life insurers to submit individual investments to the Department of Insurance; (2) removes a requirement that a foreign or alien insurer submit an application for admission to do business in Indiana in duplicate; (3) changes from March 15 to July 1 of each year the due date for certain insurance holding company filings; (4) adopts ORSA; (5) repeals a provision requiring the Commissioner to examine and publish a foreign or alien insurers annual condensed statement of assets and liabilities; and (6) specifies requirements for service contracts. The bill passed the House yesterday by a vote of 95-0. It has been assigned to the Senate Insurance Committee with Chairman Paul as the sponsor.

ELECTRONIC DELIVERY OF INSURANCE NOTICES AND DOCUMENTS

HB 1058 (Rep. Peggy Mayfield), which passed out of the House Insurance Committee last week, provides for the electronic delivery of insurance notices and documents instead of other modes of delivery otherwise required for such notices and documents. The bill also requires a recipient's consent to electronic delivery and a method to withdraw consent. The bill was amended and engrossed on second reading in the House to include provisions regarding electronic posting of documents on an insurers website. The bill is eligible for third reading on Monday.

MOTOR VEHICLE FINANCIAL RESPONSIBILITY

HB 1059 (Rep. Matt Lehman) makes various changes to the motor vehicle financial responsibility law, including the: (1) definition of "registration" to include the license plate issued in connection with the registration of a vehicle; (2) requirement of proof of financial responsibility and reinstatement fees; (3) suspension of a registration as a consequence of operation of the vehicle without financial responsibility in effect; and (4) requirement of proof of future financial responsibility for five years related to operating a vehicle without financial responsibility in effect. The introduced version of this bill was prepared by the interim study committee on insurance. HB 1059 is eligible for third reading in the House on Monday.

POLLUTION EXCLUSION
HB 1241, authored by Rep. Martin Carbaugh (R), is a resurrection of last sessions HB 1269, which clarifies when environmental coverage is excluded from a commercial general liability insurance policy. Interested parties are trying to find common ground for an amendment which could include additional consumer notification provisions as well as language that would apply the bill prospectively.

LAWSUIT LENDING
HB 1205, authored by House Chairman Matt Lehman (R), regulates the practice of lawsuit lending subject to the jurisdiction of the Indiana Department of Insurance. It also provides an interest rate cap of 25%. The bill received overwhelming support from the insurance industry and private employer groups. The groups opposed to the bill include the American Legal Finance Association and Oasis Legal Funding. HB1205 passed out of the House Insurance Committee on Wednesday and is on second reading in the House.

WORKERS COMP
As an encore to HEA 1320 (from last session), SB 294 provides the following: additional restrictions on repackaged prescription drugs; reduces the reimbursement cap to 150% of Medicare; puts a cap on reimbursement for implants and provides that a medical service provider may not receive more than one reimbursement for an implant; clarifies the definition of medical service provider . The bill was heard on Wednesday in the Senate Pensions and Labor Committee and amended during committee to do the following: (1) clarify the time period during which a provider may be reimbursed for repackaged drugs; (2) remove the current implant language and default back to the current Medicare language regarding implants; and (3) Set the floor amount as the lesser of 150% or the amount the provider bills for. Additional testimony will be heard next Wednesday.

ABORTION COVERAGE MANDATE AMENDED

A bill requiring that abortion coverage is offered only as a separate rider to a major medical policy was amended Thursday on 2nd reading. HB 1123 mandates that abortion coverage be offered as an election to a health plan and not a part of essential coverage. The bill was amended on the House floor to remove a provision that exempted student health plans. Rep. Jeff Thompson, the bill s primary author, argued that because student health plans have grown into major medical plans under PPACA they should not be exempt from this type of requirement. The amendment passed on a voice vote and the bill will be eligible for a vote before the entire House on Monday.

RX COST SHARING BILL DIES IN HOUSE

A bill placing limits on out-of-pocket cost sharing for a prescription drug benefit will not be heard in the House Insurance Committee, meaning it is likely dead for this session. HB 1158 is consistent with proposals filed in previous years. The bill intended to place a limit on out-of-pocket costs of $200 per month for one drug and $500 per month for multiple drugs.

NO HEARING FOR MEDICAID EXPANSION BILL

HB 1309 was filed this session by Rep. Ed Clere and established the Affordable Care Committee charged with studying Medicaid expansion and whether the state should migrate to a state-based exchange. With the committee hearing deadline upon us Tuesday, it seems there will be no discussion over Medicaid expansion in any formal setting this session.

HOUSE CONSIDERS HIGH COST POOL STUDY

While the Indiana Department of Insurance continues to grapple with moving members from ICHIA to the federal exchange, a bill is moving that would direct the Legislative Council to study whether the state should start a new high risk program. HB 1335 was filed by Rep. Tim Brown and requires a study of the implementation of a high cost management program for individuals who incur more than $1.5 million in health care costs due to chronic conditions.

WELFARE DRUG TESTING BILL ON THE

MOVE
A bill placing limits on benefits for people receiving TANF benefits will be considered before the full House next week. HB 1351 requires FSSA to administer a drug testing program and curb benefits for those who test positive for drugs. A similar bill nearly passed in 2013 but was derailed in the late hours of the final night of the session.

BIOSIMILAR BILL PASSES SENATE COMMITTEE

A biosimilar substitution bill that has been historically controversial passed the Senate Health Committee 6-2 on Wednesday. SB 262 establishes a process by which a pharmacist could substitute a brand name drug for a biosimilar. The substitution is limited to drugs the FDA has determined are interchangeable and can only occur if a prescriber permits substitution on the prescription. The pharmacist must also notify the physician of the substitution within five days. The bill will be on the Senate floor Monday for further amendment and debate.

For more information

Trent Hahn tfhahn@bosepublicaffairs.com Mike OBrien mobrien@bosepublicaffairs.com Telephone: 317/684-5400 Fax: 317/684-5432