Legislature(2005 - 2006)CAPITOL 17
04/24/2006 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB289 | |
| SB310 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 289 | TELECONFERENCED | |
| + | SB 310 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 24, 2006
4:12 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Pete Kott
Representative Gabrielle LeDoux
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 289(FIN)
"An Act relating to the payment of insurer examination expenses,
to the regulation of managed care insurance plans, to actuarial
opinions and supporting documentation for an insurer, to
insurance firms, managing general agents, and third-party
administrators, to eligibility of surplus lines insurers, to
prompt payment of health care insurance claims, to required
notice by an insurer, to individual deferred annuities, to
mental health benefits under a health care insurance plan, to
the definitions of 'title insurance limited producer' and of
other terms used in the title regulating the practice of the
business of insurance, and to small employer health insurance;
repealing the Small Employer Health Reinsurance Association;
making conforming amendments; and providing for an effective
date."
- MOVED CSSB 289(FIN) OUT OF COMMITTEE
SENATE BILL NO. 310
"An Act relating to the employment of prisoners; and providing
for an effective date."
- MOVED HCS SB 310(STA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 289
SHORT TITLE: INSURANCE
SPONSOR(s): LABOR & COMMERCE BY REQUEST
02/13/06 (S) READ THE FIRST TIME - REFERRALS
02/13/06 (S) L&C, FIN
02/16/06 (S) L&C AT 1:30 PM BELTZ 211
02/16/06 (S) Heard & Held
02/16/06 (S) MINUTE(L&C)
02/23/06 (S) L&C AT 1:30 PM BELTZ 211
02/23/06 (S) Moved CSSB 289(L&C) Out of Committee
02/23/06 (S) MINUTE(L&C)
02/27/06 (S) L&C RPT CS 3DP SAME TITLE
02/27/06 (S) DP: BUNDE, STEVENS B, SEEKINS
03/20/06 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/20/06 (S) Heard & Held
03/20/06 (S) MINUTE(FIN)
03/27/06 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/27/06 (S) <Above Bill Hearing Canceled>
03/29/06 (S) FIN RPT CS 5DP 2NR
NEW TITLE
03/29/06 (S) DP: WILKEN, GREEN, BUNDE, DYSON,
STEDMAN
03/29/06 (S) NR: HOFFMAN, OLSON
03/29/06 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/29/06 (S) Moved CSSB 289(FIN) Out of Committee
03/29/06 (S) MINUTE(FIN)
04/13/06 (S) TRANSMITTED TO (H)
04/13/06 (S) VERSION: CSSB 289(FIN)
04/18/06 (H) READ THE FIRST TIME - REFERRALS
04/18/06 (H) L&C, FIN
04/24/06 (H) L&C AT 3:15 PM CAPITOL 17
BILL: SB 310
SHORT TITLE: EMPLOYMENT OF PRISONERS
SPONSOR(s): FINANCE
03/20/06 (S) READ THE FIRST TIME - REFERRALS
03/20/06 (S) FIN
03/27/06 (S) FIN RPT 4DP 1NR
03/27/06 (S) DP: WILKEN, GREEN, DYSON, STEDMAN
03/27/06 (S) NR: HOFFMAN
03/27/06 (S) FIN AT 9:00 AM SENATE FINANCE 532
03/27/06 (S) Moved SB 310 Out of Committee
03/27/06 (S) MINUTE(FIN)
03/31/06 (S) TRANSMITTED TO (H)
03/31/06 (S) VERSION: SB 310
04/03/06 (H) READ THE FIRST TIME - REFERRALS
04/03/06 (H) STA, L&C, FIN
04/11/06 (H) STA AT 8:00 AM CAPITOL 106
04/11/06 (H) Scheduled But Not Heard
04/13/06 (H) STA AT 8:00 AM CAPITOL 106
04/13/06 (H) Heard & Held
04/13/06 (H) MINUTE(STA)
04/18/06 (H) STA AT 4:00 PM CAPITOL 106
04/18/06 (H) Moved HCS SB 310(STA) Out of Committee
04/18/06 (H) MINUTE(STA)
04/19/06 (H) STA RPT HCS(STA) 6DP
04/19/06 (H) DP: GARDNER, LYNN, GATTO, GRUENBERG,
RAMRAS, SEATON
04/24/06 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
JANE ALBERTS, Staff
to Senator Con Bunde
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Noted that the Senate Labor and Commerce
Standing Committee sponsored SB 289 by request of the Division
of Insurance.
LINDA HALL, Director
Division of Insurance
Department of Commerce, Community, & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 289 on behalf of
the Division of Insurance, which requested the introduction of
SB 289.
KATIE CAMPBELL, Actuary Life/Health
Juneau Office
Division of Insurance
Department of Commerce, Community, & Economic Development
Juneau, Alaska
POSITION STATEMENT: During hearing of SB 289, answered
questions.
DR. RAMSEY NASSAR, Psychiatrist
(No address provided)
POSITION STATEMENT: During hearing of SB 289, testified in
support of moving toward parity.
DARWIN PETERSON, Staff
to Senator Lyda Green
Senate Finance Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 310 on behalf of the Senate
Finance Committee, sponsor.
SHARLEEN (SHAR) GRIFFIN, Director
Central Office
Division of Administrative Services
Department of Corrections (DOC)
Juneau, Alaska
POSITION STATEMENT: Answered questions during hearing on SB
310.
ACTION NARRATIVE
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 4:12:12 PM. Representatives Lynn,
Kott, Guttenberg, Rokeberg, and Anderson were present at the
call to order. Representatives LeDoux and Crawford arrived as
the meeting was in progress.
4:12:43 PM
SB 289-INSURANCE
CHAIR ANDERSON announced that the first order of business would
be CS FOR SENATE BILL NO. 289(FIN), "An Act relating to the
payment of insurer examination expenses, to the regulation of
managed care insurance plans, to actuarial opinions and
supporting documentation for an insurer, to insurance firms,
managing general agents, and third-party administrators, to
eligibility of surplus lines insurers, to prompt payment of
health care insurance claims, to required notice by an insurer,
to individual deferred annuities, to mental health benefits
under a health care insurance plan, to the definitions of 'title
insurance limited producer' and of other terms used in the title
regulating the practice of the business of insurance, and to
small employer health insurance; repealing the Small Employer
Health Reinsurance Association; making conforming amendments;
and providing for an effective date."
JANE ALBERTS, Staff to Senator Con Bunde, Alaska State
Legislature, began by explaining that the Senate Labor and
Commerce Standing Committee sponsored SB 289 by request of the
Division of Insurance.
4:13:29 PM
CHAIR ANDERSON announced that he would like to move this
legislation out of committee today unless members have consuming
questions.
4:13:42 PM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community, & Economic Development (DCCED), began by
noting the division's support for SB 289. Ms. Hall specified
that the majority of the legislation addresses issues relating
to life, annuities, and health insurance. She then turned
attention to Sections 3-24 and explained that generally [Alaska]
has laws that only apply to group health insurance plans. This
legislation changes those protections to consumers to also apply
to individual health insurance plans. The aforementioned
protections include internal and external appeals processes for
claims denial and prompt payment statutes. The other
nonsubstantive changes include replacing the term "health care"
with "medical care", which is defined in statute. The
aforementioned change would make it consistent with federal and
state laws. Section 32 contains provisions regarding the prompt
payment of health claims, which under this legislation will
apply to individuals. The legislation also contains changes in
the nonforfeiture language for annuities by adopting some model
laws that the state had yet to adopt. The legislation contains
changes to protect against excessive surrender charges on
annuity products so that consumers aren't gouged. She informed
the committee that the Small Employer Health Re-insurance
Association isn't being utilized and costs the association
$10,000-$12,000 a year to administer. Furthermore, only two
lives are reinsured in that group and they are supportive of
winding up the affairs of the association.
4:16:26 PM
MS. HALL went on to inform the committee that the legislation
includes some corrections to statutory references regarding
qualified domestic relation orders. Furthermore, the Health
Insurance Portability and Accountability Act (HIPAA) mental
parity provisions, which are identical to provisions adopted in
1987, are included in this legislation. The aforementioned
attempts to ensure that Alaska's statutes are in compliance with
federal law.
MS. HALL specified that the remainder of the legislation
addresses areas outside of life and health insurance. On pages
15 and 16 there is an actuarial guideline, which is an
additional tool that the division would use to quickly identify
an insurer who is in a troubled financial position. The
domestic insurer would be required to file its actuarial opinion
summary, which would include its estimate of the range of
reasonable reserves, and explain any adverse development. Ms.
Hall said, "This is the National Association of Insurance
Commissioners' model, that we would like adopted for use in
regulating our domestic insurers." She then highlighted that
the legislation includes changes in requirements for a managing
general agent to place Alaska more clearly in line with how
managing general agents are regulated around the country. The
legislation also includes provisions to streamline various
licensing procedures in order to allow the division to publish a
list of eligible surplus lines insurers on the division's web
site and to expand electronic communications.
4:18:10 PM
REPRESENTATIVE ROKEBERG, recalling that Alaska had adopted the
mental health provisions under HIPAA in the past, asked if those
are optional.
MS. HALL clarified that they merely sunsetted.
REPRESENTATIVE ROKEBERG inquired as to what the mental health
provisions stated prior to sunsetting.
MS. HALL answered that the mental health provisions in SB 289
are the same as what they were prior to sunsetting.
4:18:46 PM
MS. HALL, in further response to Representative Rokeberg,
specified that the mental health provisions are embodied in
Section 39.
4:19:22 PM
KATIE CAMPBELL, Actuary Life/Health, Juneau Office, Division of
Insurance, Department of Commerce, Community, & Economic
Development, said that the section being referenced is located
on page 32, line 19, and the language is identical to the
federal law implementing the mental health parity. She
explained that the language specifies that if [the provisions]
would increase the cost of health care by more than 1 percent,
the provisions wouldn't apply. The language is basically a copy
of the law adopted in 1987.
4:20:01 PM
REPRESENTATIVE GUTTENBERG inquired as to what happens after the
repeal of the Small Employer Health Insurance Association.
MS. HALL explained that upon repeal there won't be any re-
insurance for the two lives in the Small Employer Health
Insurance Association. The insurance company will accept the
risk, without re-insuring. In further response to
Representative Guttenberg, Ms. Hall related her understanding
that the change won't impact the two lives remaining in the
aforementioned association.
4:20:41 PM
REPRESENTATIVE CRAWFORD highlighted the language to page 32,
lines 12-13, which read: "Except as provided otherwise in this
title, a health care insurance plan is not required to provide
mental health benefits." He asked if that's been the situation
all along.
MS. HALL replied yes, and added that, save those items
specifically mandated in state law, the division doesn't require
any particular types of coverage to be in a health insurance
plan. Therefore, individuals would have a choice as would an
employer creating a health plan. The state, she related, has
never chosen to mandate the requirement of mental health
benefits.
4:21:38 PM
REPRESENTATIVE CRAWFORD said that the sections leading up to the
aforementioned language seem to provide for mental health
parity, although the [insurer] can opt out of such coverage if
the insurer so desires.
MS. HALL clarified that if mental health services are offered,
then it must done with parity. However, it's not required to be
offered.
4:22:08 PM
DR. RAMSEY NASSAR, Psychiatrist, began by informing the
committee that although he is only testifying as a citizen, he
is a member of the Alaska State Psychiatric Association and
Alaska State Medical Association. Dr. Nassar opined that the
line between mental health and physical health is becoming more
blurred as more is learned about various conditions. In
general, Dr. Nassar said that he is for parity in as much as it
can be provided.
4:23:59 PM
REPRESENTATIVE GUTTENBERG inquired as to Dr. Nassar's specific
concerns about SB 289.
DR. NASSAR replied that he wanted to support moving toward
parity, and noted that he doesn't have any specific concerns
regarding the legislation.
4:24:50 PM
REPRESENTATIVE ROKEBERG moved to report CSSB 289(FIN) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSSB 289(FIN) was
reported from the House Labor and Commerce Standing Committee.
4:25:04 PM
SB 310-EMPLOYMENT OF PRISONERS
CHAIR ANDERSON announced that the final order of business would
be SENATE BILL NO. 310, "An Act relating to the employment of
prisoners; and providing for an effective date."
4:25:35 PM
DARWIN PETERSON, Staff to Senator Lyda Green, Senate Finance
Committee, Alaska State Legislature, sponsor, noted that SB 310
was introduced at the request of the Department of Corrections
(DOC). He explained that the intent of the bill is to reinstate
the Alaska Correctional Industries program, which was sunsetted
along with the Correctional Industries Commission, in July of
2005. This legislation, he said, would reestablish and improve
the aforementioned program. He went on to say that the
department would have the authority to participate in federal
Prison Industry Enhancement (PIE) programs in addition to
actively participating and partnering with private enterprises.
In regard to the cost of the program, he said that the program
will be funded through program receipts. Furthermore, SB 310
promotes prisoner responsibility and accountability by enabling
the department to deduct confinement costs from inmates' wages.
These deductions, he said, may be used for child support
payments, victim restitution, criminal fines, civil judgments,
fees for utilities while incarcerated in addition to other
obligations. He said "this is a vital piece of legislation ...
if the state of Alaska wants to continue using prison employment
as a tool for rehabilitation."
4:27:12 PM
CHAIR ANDERSON noted that he was previously on the DOC
subcommittee. Initially, he said, there was concern regarding
compensation for inmates; however, he spoke with the
commissioner who explained the importance of the program. He
opined that this program is "critical" to keep the [prison]
environment civil.
MR. PETERSON stated his agreement and highlighted furniture
building programs and laundry programs, which are important for
rehabilitation.
4:28:47 PM
REPRESENTATIVE LYNN asked if there is any possibility of jobs
being taken from "law-abiding citizens."
MR. PETERSON replied no, adding that the Senate Finance
Committee and the labor unions worked to find a compromise, and
an amendment was adopted in the House State Affairs Standing
Committee to add language to ensure that this would not occur.
He explained that before authorizing a contract to conduct work
with a private organization the commissioner must consult with
the labor unions.
CHAIR ANDERSON acknowledged members of the labor unions in
attendance, and noted their support of SB 310.
4:30:00 PM
REPRESENTATIVE CRAWFORD expressed concern regarding contracted
work, and asked how the department would compensate for changes
in the workforce. In addition, he inquired as to the length of
the contracts between the department and the labor unions.
MR. PETERSON replied that without seeing contract language, he
would be unable to answer the question regarding contract dates;
however, he surmised that the labor unions would not want the
contract to continue over an extensive period of time.
4:32:02 PM
CHAIR ANDERSON commented that [the length of contracts] is a
regulatory interpretation, not a statutory interpretation. He
said that in order to have the labor unions' support of the
bill, the aforementioned issue needed to be addressed. He
surmised that the contracts would most likely be for a short
time, with the option of voiding the contract, if necessary.
REPRESENTATIVE CRAWFORD said that he would like to see
guidelines for the contracts.
MR. PETERSON replied that the department may have an
interpretation of the current regulations which may address this
issue.
4:33:12 PM
REPRESENTATIVE ROKEBERG, referring to page 3, Section 2, asked
why the language regarding the impact on private industry was
removed. He opined that "private organization" does not
indicate this level of consultation. In response to a comment,
he clarified that previously, the bill applied to both private
an public sector contracts; however, it appears to now focus on
union contracts.
MR. PETERSON explained that the aforementioned amendment was
intended to "raise the bar" for both the public and private
sector. The commissioner would consult with local organizations
to ensure that the contract does not result in the displacement
of employed workers. He stated that this would apply to both
private sector and labor union employees. He added that if this
language is not specific enough, the sponsor would support more
specificity; however, it is the sponsor's belief that the
current language is appropriate.
4:35:31 PM
REPRESENTATIVE ROKEBERG questioned the involvement of a "private
organization."
REPRESENTATIVE GUTTENBERG, referring to page 6, Section 9, asked
for an explanation of the intent of this section.
MR. PETERSON replied that [AS 37.05.146(c)] applies to program
receipts. He explained that Section 9 includes language to
ensure that revenue from the program may be used as its funding
source.
SHARLEEN (SHAR) GRIFFIN, Director, Central Office, Division of
Administrative Services, Department of Corrections (DOC),
clarified that Section 9 is intended to support the Prison
Industries Enhancement program (PIE), which is through the
Bureau of Justice Assistance (BJA), and is monitored by the
Correctional Industries Association. She said that this program
has many regulations that must be followed. She explained that
this program requires the inmates be paid the prevailing wage,
which must be obtained through the Department of Labor, along
with working with union organizations to ensure that there is no
unfair competition. Paying prevailing wage, she said, allows
one deduction for the offender to pay part of the cost of
incarceration. She said that the money would go to support the
program in which the inmate is working.
4:38:02 PM
MS. GRIFFIN, in response to a question, said that prevailing
wage is being used instead of minimum wage so as to not create
unfair competition with private industries.
REPRESENTATIVE GUTTENBERG asked what types of jobs would be
available [with the PIE program].
MS. GRIFFIN replied that this would depend on the private
vendor. The PIE is required if the contract is with a vendor
that transports and sells goods across state lines. Currently,
she said, 34 states are involved in this program.
4:39:55 PM
MS. GRIFFIN, in response to a question, said that currently,
there are no contracts that transport and sell goods across
state lines.
CHAIR ANDERSON asked if any prisoner can work, regardless of the
violation.
MS. GRIFFIN replied no. She said that the inmate's
classification must fit the job for which the inmate applied.
These classifications are: minimum security, medium security,
maximum security, and close security.
REPRESENTATIVE LEDOUX, referring to page 3, Section 2, in regard
to the commissioner consulting with local union organizations,
inquired as to what would happen if a job in question is not a
union position.
MS. GRIFFIN replied that the types of jobs the department would
participate in would be the types of activities that can be done
within the confines of an institution, which "drastically
limits" what can be done. She stated that inmates would not be
sent outside of the facility to work. For example, she said, a
vendor may wish to set up an auto-body shop and teach inmates to
do auto-body work.
4:42:56 PM
REPRESENTATIVE LEDOUX asked if auto-body work is a union trade.
MS. GRIFFIN replied that she does not believe so, but would
defer to the union representatives to answer this question.
REPRESENTATIVE CRAWFORD said that some auto-body shops are
union; however, most are not.
REPRESENTATIVE ROKEBERG, referring to page 5, Section 7,
subparagraph (b), asked if the prevailing wage is the current
standard.
MS. GRIFFIN replied that the prevailing wage only applies to the
PIE, and can be found on page 4, Section 6 of the bill.
4:45:55 PM
MS. GRIFFIN, in response to a question, clarified that if the
department signed a contract with a vendor who wanted to build
office furniture and sell it across state lines, this would need
to be a PIE program in order for the state to participate.
MS. GRIFFIN, in response to questions, stated that SB 310
contains retroactive clauses. If the legislation does not pass,
she said, the department will not be able to continue the PIE
program, in addition to having working inmates.
REPRESENTATIVE KOTT inquired as to the current statewide average
cost of confinement.
MS. GRIFFIN replied that the average is $107.42 per day, which
includes all costs. In response to an additional question, she
clarified that if the compensation is 50 percent or more of the
minimum wage established, the commissioner may make deductions
"up to the cost of care."
4:48:43 PM
REPRESENTATIVE ROKEBERG expressed concern regarding the types of
private contractors that would be considered.
CHAIR ANDERSON suggested that this question be answered before
the next committee of referral.
4:49:31 PM
REPRESENTATIVE KOTT moved to report HCS SB 310(STA) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, HCS SB 310(STA) was
reported from the House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:49:34 PM.
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