Legislature(2025 - 2026)ADAMS 519

05/17/2025 10:00 AM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
-- Please Note Time Change --
+ SB 54 ARCH, ENG, SURVEYORS; REG INT DESIGN TELECONFERENCED
Moved CSSSSB 54(FIN) Out of Committee
-- Public Testimony --
+ SB 137 EXTND BDS:MIDWIVE/NURSING/VET EXAM/PAROLE TELECONFERENCED
Moved CSSB 137(FIN) Out of Committee
-- Public Testimony --
+ SB 132 OMNIBUS INSURANCE BILL TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 104 ADDRESS CONFIDENTIALITY PROGRAM TELECONFERENCED
Heard & Held
-- Public Testimony --
CS FOR SENATE BILL NO. 132(FIN)                                                                                               
                                                                                                                                
     "An Act relating to insurance; and providing for an                                                                        
     effective date."                                                                                                           
                                                                                                                                
Co-Chair  Foster asked  the sponsor  to introduce  the bill.                                                                    
There would be a committee substitute (CS) forthcoming.                                                                         
                                                                                                                                
6:41:38 PM                                                                                                                    
                                                                                                                                
SENATOR   JESSE   BJORKMAN,   SENATE  LABOR   AND   COMMERCE                                                                    
COMMITTEE,  SPONSOR, shared  that the  bill was  a companion                                                                    
omnibus insurance  bill that had  been heard  multiple times                                                                    
in the  House Labor and  Commerce Committee and  elevated to                                                                    
the  House  Finance  Committee. He  explained  that  SB  132                                                                    
contained  a number  of provisions  that were  technical and                                                                    
conforming  changes   throughout  Title  21   including  the                                                                    
correction  of   drafting  errors  and   updating  insurance                                                                    
technology   to  the   National  Association   of  Insurance                                                                    
Controller Standards  to ensure  Alaska was "singing  by the                                                                    
same set of sheet music that  other states are" when it came                                                                    
to the world of insurance.  He explained that the Department                                                                    
of  Commerce, Community  and  Economic Development  (DCCED),                                                                    
Division  of Insurance  director  would  take the  committee                                                                    
through the bill.                                                                                                               
                                                                                                                                
6:42:53 PM                                                                                                                    
                                                                                                                                
LORI   WING-HEIER,   DIRECTOR,    DIVISION   OF   INSURANCE,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
began with Section  1 of the bill. She  explained that DCCED                                                                    
asked to have  the statute of limitations  changed from five                                                                    
years  to  20  years   because  the  Division  of  Insurance                                                                    
received   complaints  and   concerns  from   consumers  who                                                                    
discovered  they  had been  taken  on  a life  insurance  or                                                                    
annuity  product after  the statute  of limitations  passed.                                                                    
She  elaborated that  it was  typically an  elder when  they                                                                    
went to cash it in or  use it. Under the scenario, there was                                                                    
nothing  the department  could do  because  the statute  had                                                                    
passed.                                                                                                                         
                                                                                                                                
Ms. Wing-Heier  moved to Sections  2 and 3. She  stated that                                                                    
she  would  talk   about  health  maintenance  organizations                                                                    
(HMOs)  throughout the  bill. She  explained  that HMOs  had                                                                    
always been in the statute,  but statute had been limited in                                                                    
allowing  the use  of HMOs  in Alaska.  She elaborated  that                                                                    
because  there was  so much  talk amongst  employers, school                                                                    
boards, municipalities,  and individuals  about the  cost of                                                                    
healthcare and  healthcare insurance. She detailed  that the                                                                    
bill would put  the teeth back in statute so  an employer or                                                                    
individual could choose to buy an  HMO product to save a bit                                                                    
of money. She  expounded that it was a  managed care product                                                                    
that  would  cost  a  bit  less  than  the  common  products                                                                    
currently on  the market in  Alaska. She underscored  it was                                                                    
not  a  mandate.  She  relayed  that  the  bill  included  a                                                                    
provision that  if there was  a need  for an out  of network                                                                    
provider  in an  emergency or  that was  not available  to a                                                                    
consumer, the  HMO would be required  to pay the bill  as if                                                                    
it were an in-network provider.                                                                                                 
                                                                                                                                
6:45:03 PM                                                                                                                    
                                                                                                                                
Representative Hannan asked for  clarification on which bill                                                                    
version  the committee  was  considering.  She thought  they                                                                    
were looking at the Senate version of the bill.                                                                                 
                                                                                                                                
Ms.  Wing-Heir answered  that bill  version  T [the  version                                                                    
passed by the Senate] was before the committee.                                                                                 
                                                                                                                                
Ms. Wing-Heir  moved to  Sections 4 through  11 of  the bill                                                                    
pertaining  to  financial  reporting,  reinsurance  credits,                                                                    
taxes allowed  on wet  marine and  transportation insurance,                                                                    
and the  use of  principle-based reserving for  valuation of                                                                    
reserves.  She  explained  that  the  sections  would  bring                                                                    
Alaska  into  alignment  with the  National  Association  of                                                                    
Insurance  Commissioners (NAIC)  model  law  820. She  would                                                                    
elaborate on  wet marine and transportation  insurance later                                                                    
in  the  bill.  Sections  12 through  26  amended  licensing                                                                    
statutes.  She explained  that the  applicable statutes  had                                                                    
been  reviewed   to  determine  primarily  what   was  being                                                                    
adjusted out  of state. She  explained it could  include out                                                                    
of state adjusters coming to  Alaska to work (a non-resident                                                                    
adjuster) or for example when a  person had a claim on their                                                                    
cell phone,  and they had  purchased the  insurance package.                                                                    
She  provided a  scenario where  the person  called the  800                                                                    
number,  which was  answered by  a non-resident  adjuster in                                                                    
Arkansas. She  elaborated that the division  had found there                                                                    
was  an issue  with  those not  being  licensed because  all                                                                    
states  did  not license  adjusters.  The  bill would  allow                                                                    
those  adjusters to  use  Alaska as  their  home state.  She                                                                    
detailed   that   the   individuals   would   have   to   be                                                                    
fingerprinted and  go through background checks  just like a                                                                    
resident.  They could  receive a  license  from Alaska,  but                                                                    
they would still be a  non-resident adjuster. The bill would                                                                    
make the change  throughout the title and  would make things                                                                    
easier  for the  consumer and  licensing staff  to implement                                                                    
and regulate.                                                                                                                   
                                                                                                                                
Ms.  Wing-Heier turned  to Sections  27 to  33 that  amended                                                                    
taxes on surplus  lines. The change allowed a  broker to pay                                                                    
taxes on behalf of  a non-admitted marine and transportation                                                                    
insurer.  The bill  also adjusted  penalties, less  for late                                                                    
filing and more punitive for  egregious conduct on behalf of                                                                    
the  surplus lines  broker. Sections  34 through  45 amended                                                                    
the   unfair   trade    practices   and   consumer   notices                                                                    
requirements  by  requiring   notices  of  cancelation.  The                                                                    
notice  of cancelation  would give  an individual  20 to  45                                                                    
days  to replace  their policy  if necessary.  Additionally,                                                                    
the  bill would  prevent  the cancelation  of a  homeowner's                                                                    
policy in the  event a consumer filed a claim  simply to get                                                                    
a  denial  knowing there  was  no  coverage, but  knowing  a                                                                    
denial was needed  in order to qualify for  state, local, or                                                                    
federal   aid,   primarily   from  the   Federal   Emergency                                                                    
Management Agency  (FEMA). She explained that  the situation                                                                    
had occurred recently in Juneau  when the glacial dam burst,                                                                    
and several consumers had called the division.                                                                                  
                                                                                                                                
Ms.  Wing-Heier continued  that  the bill  also amended  the                                                                    
contractor   controlled  insurance   programs  (CCIP).   She                                                                    
explained that  when there were  large projects such  as the                                                                    
Trans-Alaska  Pipeline  System   (TAPS)  and  the  Anchorage                                                                    
airport,   the  projects   were   OCIPs  [owner   controlled                                                                    
insurance  programs]  or  CCIPs  where the  owner  or  prime                                                                    
contractor  buys insurance  for  everyone on  the site.  The                                                                    
insurance had  to be a value  of $50 million with  a defined                                                                    
location and site.  The option saved the  contractor and the                                                                    
subcontractors money  because it eliminated  any possibility                                                                    
of  subrogation because  it did  not  matter what  insurance                                                                    
policy a  claim was filed  under, everyone was  insured. She                                                                    
noted  the method  was very  common in  large projects.  She                                                                    
referenced  the  existing  housing shortage  in  Alaska  and                                                                    
explained that  in the hard  insurance market  insurers were                                                                    
having a difficult time getting  the insurance necessary for                                                                    
projects; therefore,  the bill  extended the number  down to                                                                    
$20 million  and 40 units  for multi-owner  residential with                                                                    
defined site and  location. The bill also  added a provision                                                                    
requiring health  discount plans to disclose  that they were                                                                    
not insurance.  She detailed that  the plans  advertised the                                                                    
availability  of   a  plan  for   one  week  for   $50.  She                                                                    
underscored  that   they  were  not  insurance   plans.  She                                                                    
recognized the  option may  be good  and provide  a benefit,                                                                    
but  consumers  should  understand  the option  was  not  an                                                                    
insurance plan.                                                                                                                 
                                                                                                                                
6:50:13 PM                                                                                                                    
                                                                                                                                
Ms. Wing-Heir moved to Section  46 of the bill pertaining to                                                                    
workers'   compensation.   She  began   with   assigned-risk                                                                    
workers' compensation and explained  that small employers or                                                                    
employers with a bad claim  history put in the assigned risk                                                                    
  there  were many reasons an  employer could be put  in the                                                                    
category     after  $3,000  in  premium,  the  employer  was                                                                    
surcharged  25  percent.  In light  of  inflation,  workers'                                                                    
compensation  rates, and  payroll,  the  bill increased  the                                                                    
amount  to $6,000.  She noted  that she  had worked  for the                                                                    
division  for 40  years and  the number  had never  gone up.                                                                    
Section 47 allowed notices to  be sent via email in addition                                                                    
to mail. Section 48 expanded  coverage for colorectal cancer                                                                    
screenings.  Section  49  amended   the  interest  rate  for                                                                    
individual  deferred annuities  to  comply  with NAIC  model                                                                    
805.  Section   50  amended  requirements  for   group  life                                                                    
contracts. Section 51 amended  the grace period by extending                                                                    
the  number of  days a  person had  to replace  an insurance                                                                    
policy.  Section   52  was   a  technical   correction  from                                                                    
agriculture to agricultural. Section  53 stipulated that the                                                                    
division would  be responsible for approving  forms of motor                                                                    
vehicle service  contracts. She explained that  the division                                                                    
had received complaints from people  in scenarios where they                                                                    
purchased a  new car and were  told there was a  policy they                                                                    
could  purchase  to  bring  the  car back  to  be  fixed  in                                                                    
perpetuity. The division had never  looked at those policies                                                                    
to see what consumers were  being offered at what price. The                                                                    
bill would require the division to do so.                                                                                       
                                                                                                                                
Ms.  Wing-Heier  moved to  Section  55  that would  ban  the                                                                    
depreciation of  labor in  residential property  claims. She                                                                    
explained it  had been  a concern  of some  consumers. There                                                                    
could  still be  depreciation, but  the policy  itself could                                                                    
not depreciate  labor. The broker could  offer an individual                                                                    
an amendment  showing what the  price differential  would be                                                                    
and  the  individual would  be  able  to choose  whether  to                                                                    
depreciate the labor or not.                                                                                                    
                                                                                                                                
Representative  Bjorkman  asked  Ms. Wing-Heier  to  explain                                                                    
what it  would mean for  a person  who purchased a  plan who                                                                    
later experienced a loss and needed to make a claim.                                                                            
                                                                                                                                
Ms. Wing-Heier  explained that if  a person lost  their roof                                                                    
in a terrible  windstorm and the roof was 20  years old, the                                                                    
labor would be depreciated considerably  to the point that a                                                                    
person could not afford to put  the roof back on. She stated                                                                    
the  division was  increasingly  seeing  the situation.  She                                                                    
elaborated that it  was horrible when it was a  full loss on                                                                    
a house built  in 1970 and insurers  were depreciating labor                                                                    
back to that  date. She stated it was  a significant problem                                                                    
to consumers for large losses.                                                                                                  
                                                                                                                                
Ms.  Wing-Heier  turned  to   Section  56  that  included  a                                                                    
technical change to the Joint  Insurance Association and the                                                                    
way excess  loss insurance could be  purchased. She advanced                                                                    
to  a technical  change  in Section  57  and explained  that                                                                    
several years back a bill  had passed pertaining to the Life                                                                    
and Health  Guarantee Association and the  full Medicare and                                                                    
Medicaid  program  had   been  inadvertently  included.  She                                                                    
explained that the error meant  that if the federal programs                                                                    
were to  go broke, the  state would  have to pay  the claims                                                                    
through the  guarantee association.  Section 58  amended the                                                                    
HMO board. Sections  59 through 60 pertained to  HMOs to put                                                                    
teeth back into  statute and specifically state  that out of                                                                    
network  providers would  be  allowed.  Section 61  required                                                                    
risk  retention groups  to file  reports  of their  premiums                                                                    
with  the  division.  Section  62  was  a  technical  change                                                                    
pertaining  to  Section  1332 innovation  waivers  with  the                                                                    
federal  government   Centers  for  Medicare   and  Medicaid                                                                    
Services  (CMS).  The  bill added  the  U.S.  Department  of                                                                    
Treasury  at   the  request   of  the   federal  government.                                                                    
Additionally,  if the  state were  to come  up with  another                                                                    
idea  similar   to  the  Alaska  Reinsurance   Program,  the                                                                    
division could  apply for it  without seeking  approval from                                                                    
the  legislature for  the  particular  waiver. She  detailed                                                                    
that  there would  be public  hearings  and the  legislature                                                                    
would know about  it, but the division did not  want to wait                                                                    
one to  two years  to start the  process if  the opportunity                                                                    
presented itself.                                                                                                               
                                                                                                                                
Ms.  Wing-Heier   stated  that   Section  63  would   add  a                                                                    
definition   for  motor   vehicles.   Section  64   included                                                                    
repealers.  Section  65 was  uncodified  laws  of the  owner                                                                    
controlled insurance program.                                                                                                   
                                                                                                                                
6:55:25 PM                                                                                                                    
                                                                                                                                
Ms. Wing-Heir gave a summary of  version T to version W. She                                                                    
began by  explaining there were currently  bills before both                                                                    
bodies,  with  the one  on  the  Senate  being SB  134.  She                                                                    
explained  that  the  legislature  had  passed  HB  226  the                                                                    
previous year  relating to  pharmacy benefit  managers. When                                                                    
the department went  to draft regulations, it  had been told                                                                    
by  the Department  of Law  it  did not  have the  authority                                                                    
because pharmacy benefit managers  were registered, and they                                                                    
should be  licensed. She elaborated  that the  actions taken                                                                    
in  HB 226  had  to  be amended  to  change  the statute  to                                                                    
clarify  that  pharmacy  benefit  managers  and  third-party                                                                    
administrators  would be  licensed in  Alaska as  opposed to                                                                    
registered.  The   change  gave   the  division   much  more                                                                    
authority  to  deal  with  problems  when  they  arose  from                                                                    
pharmacists or consumers.  She explained it was  the crux of                                                                    
the summary of changes  [between the bill versions]. Another                                                                    
change  pertained  to the  OCIP  and  the reduction  to  $20                                                                    
million  and   40  units.  The  House   Labor  and  Commerce                                                                    
Committee  made  a change  to  cost  sharing for  colorectal                                                                    
cancer, which  eliminated the cost sharing  for biopsies and                                                                    
consultation  for  mammograms  and   for  the  screening  of                                                                    
colorectal cancer.  The age for colorectal  cancer screening                                                                    
had been  changed to meet  the guidelines from  the American                                                                    
Cancer Society.  There was an  immediate effective  date for                                                                    
the OCIPs  and CCIPs and  the remainder  of the bill  had an                                                                    
effective date of January 1.                                                                                                    
                                                                                                                                
Co-Chair Foster  thanked Ms. Wing-Heier for  her summary. He                                                                    
asked for verification the explanation  was for version T as                                                                    
well as the new changes in version W.                                                                                           
                                                                                                                                
Ms. Wing-Heir responded affirmatively.                                                                                          
                                                                                                                                
Representative Stapp  declared a  conflict with  Section 20.                                                                    
He shared  that the bill  would allow  him to get  a license                                                                    
notification of expiration via email as opposed to mail.                                                                        
                                                                                                                                
6:58:42 PM                                                                                                                    
                                                                                                                                
Representative  Galvin  asked  for some  clarity  about  the                                                                    
change related  to agricultural.  She asked if  anything was                                                                    
changed other than a word.                                                                                                      
                                                                                                                                
Ms.  Wing-Heir  responded  that  the  change  was  only  the                                                                    
correction of a word in statute.                                                                                                
                                                                                                                                
Representative Galvin  noted she  had a  question pertaining                                                                    
to  OCIP. She  stated  her understanding  that the  builders                                                                    
would like to see the  insurance plan modernized because the                                                                    
ability to  self-insure would enable  them to  get insurance                                                                    
quicker and at a lower price.                                                                                                   
                                                                                                                                
Ms. Wing-Heir  responded that there  was nothing  in statute                                                                    
that allowed  builders to self-insure  or buy  policies. She                                                                    
elaborated that  she would  expect rather  large contractors                                                                    
with the [financial] means to  self-insure a certain portion                                                                    
such as the  first $1 million or $5 million  of the loss and                                                                    
purchase umbrella insurance above that amount.                                                                                  
                                                                                                                                
Representative Galvin  asked if they were  changing how much                                                                    
a project needed to be insured.                                                                                                 
                                                                                                                                
Ms. Wing-Heir  responded that it  was not included  in Title                                                                    
21 and  the bill did  not change anything pertaining  to the                                                                    
amount of insurance required for a project.                                                                                     
                                                                                                                                
Representative  Galvin  asked  if  it meant  the  state  was                                                                    
allowing contractors to come up  with their own process. She                                                                    
used an oil  company as an example and  stated companies had                                                                    
to  buy a  large  bond  or something  in  case  there was  a                                                                    
problem. She thought it was  similar to insurance. She asked                                                                    
if  it was  similar to  the topic  at hand  where a  builder                                                                    
wanted  to  get their  own  insurance  in order  to  protect                                                                    
themselves in case something went wrong.                                                                                        
                                                                                                                                
Ms. Wing-Heir  responded that it pertained  to mega projects                                                                    
such  as the  North  Slope, Anchorage  airport, and  schools                                                                    
that included  framers, plumbers, dirt work,  engineers, and                                                                    
architects.  She explained  that  a contractor  could buy  a                                                                    
policy to  insure all  of the  individuals. The  option cost                                                                    
less money and they could  get higher limits because many of                                                                    
the projects  wanted limits of  $100 million or  more, which                                                                    
was cost prohibitive for  smaller contractors. She explained                                                                    
that the owner or the  prime [contractor] would purchase the                                                                    
policy  and  name  everyone  so   all  of  the  workers  had                                                                    
insurance protection.                                                                                                           
                                                                                                                                
Representative  Galvin  stated  her understanding  that  the                                                                    
amount of  protection was unchanged.  She asked if it  was a                                                                    
modernization  to  keep  up  with  what  other  states  were                                                                    
already doing.                                                                                                                  
                                                                                                                                
Ms.  Wing-Heir   responded,  "No."  She  relayed   that  the                                                                    
division had believed Alaska's  statutes already allowed the                                                                    
option. She thought  she was the only  director of insurance                                                                    
who had  to approve  the projects.  She elaborated  that the                                                                    
division  thought the  state's statutes  were correct  until                                                                    
someone  applied for  an  OCIP.  She had  been  told by  the                                                                    
Department of Law that statute  did not allow contractors to                                                                    
name an  additional insured person.  She explained  that the                                                                    
whole premise  was to have  everyone [on a  project] insured                                                                    
under the policy. She noted  that subsequently, the division                                                                    
had  heard from  contractors  building residential  projects                                                                    
and they  had been added as  well. She pointed out  that the                                                                    
particular  part  of the  legislation  passed  the House  in                                                                    
2024, but the  bill did not make it out  of the Senate Rules                                                                    
Committee.                                                                                                                      
                                                                                                                                
7:03:20 PM                                                                                                                    
                                                                                                                                
Representative Bynum  which version he should  refer to when                                                                    
asking a question.                                                                                                              
                                                                                                                                
Ms. Wing-Heir replied, "version W."                                                                                             
                                                                                                                                
Representative Bynum  looked at Section 76  that increased a                                                                    
workers'  compensation premium  from  $3,000  to $6,000.  He                                                                    
asked who the provision would impact monetarily.                                                                                
                                                                                                                                
Ms. Wing-Heir  answered that the  change would be  a benefit                                                                    
to  the   employer.  She   explained  that   employers  were                                                                    
currently  surcharged   at  $3,000  in  premium.   The  bill                                                                    
specified the 25 percent surcharge  did not apply until they                                                                    
reached  $6,000 in  premium. She  expected  that many  small                                                                    
employers  and sole  proprietors  may not  even  get to  the                                                                    
surcharge at a $6,000 level.                                                                                                    
                                                                                                                                
Representative  Bynum noted  that  employers were  currently                                                                    
paying the  surcharge. He  asked if  it would  be a  loss of                                                                    
revenue to companies.                                                                                                           
                                                                                                                                
Ms.  Wing-Heier explained  that  the surcharge  went to  the                                                                    
National  Council on  Compensation  Insurance. The  division                                                                    
had  spoken with  the council,  and it  did not  believe the                                                                    
change would result in a negative impact to the council.                                                                        
                                                                                                                                
Co-Chair  Foster noted  that the  committee needed  to adopt                                                                    
the new bill version as its working document.                                                                                   
                                                                                                                                
7:05:17 PM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute for CSSB 132(FIN),  Work Draft LS0415\W (Wallace,                                                                    
5/17/25) (copy on file).                                                                                                        
                                                                                                                                
Co-Chair Schrage OBJECTED for discussion.                                                                                       
                                                                                                                                
Co-Chair  Schrage WITHDREW  the  OBJECTION.  There being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
Representative   Tomaszewski   wondered    if   Section   88                                                                    
pertaining to  motor vehicle service contracts  pertained to                                                                    
factory warranties or after market service contracts.                                                                           
                                                                                                                                
Ms. Wing-Heir  responded that the  section applied  to both.                                                                    
She  explained that  if  it was  a new  car  with a  factory                                                                    
warranty where a business would  replace the transmission or                                                                    
provide a certain number of  oil changes. She explained that                                                                    
the  division was  finding that  consumers  were taking  the                                                                    
policies home  and not  receiving the  anticipated coverage.                                                                    
The  division  did not  realize  the  situation was  such  a                                                                    
problem  until it  started receiving  calls. She  noted that                                                                    
the division had  not reviewed the forms  previously, but it                                                                    
would start to do so.                                                                                                           
                                                                                                                                
Representative Tomaszewski  looked at Section  96 pertaining                                                                    
to  federal agency  waivers.  He asked  if  the state  would                                                                    
automatically  enroll  into  new  types  of  regulations  or                                                                    
health  insurance requirements.  He asked  if it  would cost                                                                    
the state money. He requested more detail.                                                                                      
                                                                                                                                
Ms.  Wing-Heir replied  that in  2015  and 2016,  healthcare                                                                    
insurance had  almost doubled in the  individual market. She                                                                    
noted it was right after the Affordable Care Act (ACA).                                                                         
                                                                                                                                
Representative Tomaszewski  noted he had lost  his insurance                                                                    
policy at the time.                                                                                                             
                                                                                                                                
Ms. Wing-Heier  elaborated that health insurance  had become                                                                    
incredibly  expensive in  a number  of  years. She  detailed                                                                    
that  Alaska  lost Moda  off  the  individual market  for  a                                                                    
number of  years and it  was not a  good time in  Alaska for                                                                    
individuals trying  to procure  insurance for  themselves or                                                                    
their families. She explained that  the division had come up                                                                    
with an idea and the  legislature had allocated $55 million.                                                                    
She detailed that the division  took the highest cost claims                                                                    
out and the  state paid them. The idea was  that because the                                                                    
market was  so highly subsidized,  the division went  to CMS                                                                    
(that  was  already paying  the  subsidies)  and offered  to                                                                    
lower  the  premiums  through  a  reinsurance  program.  The                                                                    
division  had  provided  a scenario  where  CMS  was  paying                                                                    
$200,000  in  subsidies  and  the   number  was  reduced  to                                                                    
$140,000 because the state took  the highest claims out. The                                                                    
division had asked  if it could have the $60,000  if CMS was                                                                    
only paying $140,000. She explained  that the offer had been                                                                    
accepted. She  relayed that the  program had  been operating                                                                    
for  close to  ten years  and it  had brought  in over  $800                                                                    
million  in  federal  funds from  the  advance  premium  tax                                                                    
credits or subsidies. She explained  that if the opportunity                                                                    
presented  itself  to  apply  for  another  1332  waiver  to                                                                    
address the cost of healthcare  insurance, that the division                                                                    
would have the  flexibility to do so without  having to make                                                                    
the  request to  the legislature  and possibly  delaying the                                                                    
project for two years.                                                                                                          
                                                                                                                                
7:10:09 PM                                                                                                                    
                                                                                                                                
Representative  Galvin  asked  if the  state  currently  had                                                                    
managed  care.  She  asked how  the  new  insurance  section                                                                    
played a role.                                                                                                                  
                                                                                                                                
Ms.  Wing-Heir responded  that Alaska  had  managed care  in                                                                    
"bits and  pieces." She  relayed that  she was  the director                                                                    
under  Title 21,  and it  included 118,000  Alaskans in  the                                                                    
individual market,  small group,  and some large  group. She                                                                    
explained there  was not much  managed care in  those areas.                                                                    
She  expounded  that  self-insured such  as  AlaskaCare  and                                                                    
union plans with the coalition  were managed care. The state                                                                    
had   not  been   able  to   offer  managed   care  to   the                                                                    
aforementioned  consumers under  Title  21.  The bill  would                                                                    
"put the teeth back into" an  HMO as an option for employers                                                                    
or individuals to  choose a managed care  plan. She remarked                                                                    
that the  Alaska did not  have a Medicare  Advantage program                                                                    
and  it could  not  get  the program  without  some type  of                                                                    
managed  care statute.  She recognized  there had  been some                                                                    
issues with  how the  programs were  sold or  distributed in                                                                    
the Lower 48. The division was  hoping to get some offers of                                                                    
Medicare  Advantage and  to give  consumers  an option.  She                                                                    
reasoned  it  made sense  to  give  consumers an  option  to                                                                    
select a  less expensive health insurance  for employees and                                                                    
their families.                                                                                                                 
                                                                                                                                
Representative  Galvin  stated   that  hearing  the  context                                                                    
around Medicare Advantage made sense.  She thought Ms. Wing-                                                                    
Heier  had  stated  previously  there  would  also  be  some                                                                    
protections  in   place  for  individuals  or   an  employer                                                                    
choosing  a  managed  care  plan   to  ensure  they  receive                                                                    
coverage  for items  like congenital  conditions or  cancer.                                                                    
She asked for more details.                                                                                                     
                                                                                                                                
Ms.  Wing-Heir  responded  that  she did  not  know  of  any                                                                    
product under  Title 21 that  would do that. She  knew there                                                                    
had   been  some   short-term   limited   plans  with   some                                                                    
conditions, but  most plans  were pretty  heavily regulated.                                                                    
She explained that under an  HMO, typically because it was a                                                                    
managed care product,  an individual went to  a primary care                                                                    
physician who  would provide a  referral to a  specialist if                                                                    
needed.  She  elaborated  that they  could  do  a  capitated                                                                    
agreement  where they  took a  given number  of people.  She                                                                    
noted there were  all kinds of ways a  managed care provider                                                                    
could  manage costs.  She relayed  that  there were  limited                                                                    
medical resources  in Alaska and  some things that  were not                                                                    
available, such as  a burn unit. The bill  specified that if                                                                    
an individual needed a specialist and there was not one in-                                                                     
network  or the  HMO, the  insurance agency  could not  deny                                                                    
coverage.  The same  applied in  the event  of an  emergency                                                                    
when an in-network  provider was not available,  the HMO had                                                                    
to  accept and  pay  for a  service as  though  it were  in-                                                                    
network.                                                                                                                        
                                                                                                                                
7:14:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster asked his staff to review the fiscal note.                                                                      
                                                                                                                                
BRODIE   ANDERSON,   STAFF,  REPRESENTATIVE   NEAL   FOSTER,                                                                    
reviewed  the zero  fiscal note  from  DCCED, OMB  Component                                                                    
354,  control code  mnqAV. The  note showed  an increase  of                                                                    
$110,000 in  receipt services collected. He  deferred to the                                                                    
department for additional details.                                                                                              
                                                                                                                                
Ms.  Wing-Heir clarified  that the  fiscal note  reviewed by                                                                    
Mr. Anderson was to version  T of the legislation. There was                                                                    
a bit of  an addition to the fiscal note  for version W. She                                                                    
apologized  that  the committee  did  not  have the  updated                                                                    
note. She explained  that the fees and  penalties on surplus                                                                    
lines brokers and the wet  marine and transportation tax had                                                                    
been  adjusted. The  bill deleted  a provision  that allowed                                                                    
the deduction  for seating premiums  and paid  claims, which                                                                    
was in line with other  insurers. The result was an expected                                                                    
revenue  increase of  approximately $110,000.  She explained                                                                    
how the fiscal  note was impacted by version W  of the bill.                                                                    
She detailed that when HB  226 passed the previous year, the                                                                    
division  had  been   unable  to  get  a  fee   in  the  new                                                                    
regulations  resulting from  the  bill.  She expounded  that                                                                    
when the  licensing bill had  come back to  the legislature,                                                                    
the legislature added a biannual fee of $2,000 for third-                                                                       
party  administrators  and   $15,000  for  pharmacy  benefit                                                                    
managers (there were 34 who  did business in the state). She                                                                    
believed  the  change  added   about  $300,000  in  revenue;                                                                    
therefore, the total  change in revenue under  version W was                                                                    
about $400,000.                                                                                                                 
                                                                                                                                
Co-Chair  Josephson asked  for verification  that the  House                                                                    
had its own version of the bill.                                                                                                
                                                                                                                                
Ms. Wing-Heir responded affirmatively.                                                                                          
                                                                                                                                
Co-Chair Josephson  asked how many hearings  the House Labor                                                                    
and Commerce Committee had on the bill.                                                                                         
                                                                                                                                
Ms. Wing-Heir  responded that  there had  been four  or five                                                                    
hearings.                                                                                                                       
                                                                                                                                
Co-Chair  Josephson  assumed  that Ms.  Wing-Heier  had  the                                                                    
state's Aetna  plan the way House  Finance Committee members                                                                    
did.                                                                                                                            
                                                                                                                                
Ms. Wing-Heier responded affirmatively.                                                                                         
                                                                                                                                
Co-Chair Josephson asked if it was better than an HMO plan.                                                                     
                                                                                                                                
Ms.  Wing-Heir responded  that it  was probably  better, but                                                                    
she did  not know  for certain. She  stated there  was still                                                                    
some  directed  or  managed   care  within  AlaskaCare.  For                                                                    
example,  AlaskaCare set  up the  surgery center  providers,                                                                    
which was  managed care.  She believed  AlaskaCare may  be a                                                                    
bit better, but the two should be close.                                                                                        
                                                                                                                                
Co-Chair Josephson asked if the  bill would enable employers                                                                    
in Alaska to  opt out of a plan like  Aetna's and move their                                                                    
employees into an HMO, which they currently could not do.                                                                       
                                                                                                                                
Ms. Wing-Heir  responded that  employers could  currently do                                                                    
it, but  no one offered  it because  there were no  teeth in                                                                    
the   current  HMO   statutes.   Current  statutes   allowed                                                                    
employers  to have  an HMO,  but employees  would get  to go                                                                    
wherever  they wanted,  meaning  there was  no benefit.  The                                                                    
bill would  put the  benefit back in.  She stressed  that it                                                                    
was  an  option,  not  a  mandate.  Additionally,  the  bill                                                                    
included language allowing for  out of network services when                                                                    
necessary.                                                                                                                      
                                                                                                                                
Co-Chair  Josephson asked  if  committee  members should  be                                                                    
concerned about a race to the  bottom in terms of quality of                                                                    
care that employers might opt their employees into.                                                                             
                                                                                                                                
Ms. Wing-Heir responded, "I don't  believe that at all." She                                                                    
believed  there would  be the  same fine  doctors that  were                                                                    
currently  providing  services.  She thought  perhaps  those                                                                    
doctors would  like the changes  better. She compared  it to                                                                    
the  direct health  care agreement  that was  passed in  the                                                                    
prior year  where more capitated  agreements could  be done.                                                                    
For  example,  a  clinic  could  agree to  see  all  of  the                                                                    
employees of Joe's Plumbing for  a given amount under an HMO                                                                    
insurance plan. She noted that  all of Joe's employees would                                                                    
have to go to the same clinic.                                                                                                  
                                                                                                                                
Co-Chair  Josephson asked  if the  bill  Ms. Wing-Heier  was                                                                    
referring to was former Senator David Wilson's bill.                                                                            
                                                                                                                                
Ms. Wing-Heier responded affirmatively.                                                                                         
                                                                                                                                
Co-Chair Josephson recalled that  there had been controversy                                                                    
associated with the bill.                                                                                                       
                                                                                                                                
Ms.  Wing-Heier answered  that the  controversy  was not  so                                                                    
much  about   the  direct  healthcare,  but   about  whether                                                                    
regulation  should   be  taken  on  by   the  division.  She                                                                    
elaborated  that "they  wanted it  to be  regulated somehow,                                                                    
somewhere," and it had ended  up on the division's doorstep.                                                                    
She  clarified  that  the  division  had  not  asked  to  be                                                                    
responsible for the  regulation, but it had  accepted it and                                                                    
the bill passed.                                                                                                                
                                                                                                                                
7:20:32 PM                                                                                                                    
                                                                                                                                
Representative Bynum  wished there  was a  way to  get three                                                                    
more  zeros added  to the  revenue projected  in the  fiscal                                                                    
note, but he understood that  was not currently possible. He                                                                    
asked  about  a  couple  of   hypotheticals  that  were  not                                                                    
included  in  the  bill.  He  stated  there  had  been  many                                                                    
conversations  about having  an opportunity  for cities  and                                                                    
boroughs,   particularly   for    employees   in   Teachers'                                                                    
Retirement System (TRS)  programs, to be able  to partake in                                                                    
health insurance in  a different way. He asked  if the topic                                                                    
had  been discussed  or considered  as part  of the  omnibus                                                                    
package.                                                                                                                        
                                                                                                                                
Ms. Wing-Heir responded that Title  21 did not extend to the                                                                    
NEA [National Education  Association] plans school districts                                                                    
were under and  did not extend to  AlaskaCare. She clarified                                                                    
that relatively  speaking, Title 21 pertained  to 118,000 of                                                                    
730,000  Alaskans  and  represented  a small  piece  of  the                                                                    
insured market. She explained that  Title 21 did not pertain                                                                    
to unions, self-insured  individuals, Medicare, Medicaid, or                                                                    
Tricare.                                                                                                                        
                                                                                                                                
Representative  Bynum remarked  that  he  would not  provide                                                                    
another hypothetical because he was  certain it would not be                                                                    
included.                                                                                                                       
                                                                                                                                
Senator Bjorkman  added that it  was important  to reiterate                                                                    
what  Ms. Wing-Heier  had said  about the  private insurance                                                                    
market and  its ability to  have managed care.  He explained                                                                    
that many school districts  were self-insured, including the                                                                    
Kenai Peninsula Borough School  District, the Mat-Su Borough                                                                    
School District,  and the Public Education  Health Trust. He                                                                    
detailed  that  all  of   the  aforementioned  entities  had                                                                    
managed  care with  a network  and  preferred providers.  He                                                                    
explained that  the bill  would set up  HMO options  for the                                                                    
private market. He  clarified that it was  not a substandard                                                                    
option  and gave  the  private market  an  option that  many                                                                    
people in the public market already had.                                                                                        
                                                                                                                                
7:23:15 PM                                                                                                                    
                                                                                                                                
Representative  Bynum  stated  there  had  been  substantial                                                                    
discussion  over  the past  six  months  to  a year  in  the                                                                    
insurance  market,  specifically  about  Alaskan  homeowners                                                                    
being able  to have their  homes covered  in the event  of a                                                                    
landslide.  He  noted  it  had been  a  big  discussion  for                                                                    
Southeast  Alaska. He  asked  if the  topic  had been  under                                                                    
discussion pertaining to the bill.                                                                                              
                                                                                                                                
Ms. Wing-Heir  responded that it  had been  discussed almost                                                                    
daily. She did  not know if there was anything  she could do                                                                    
in statute. The division had  spoken with insurers and there                                                                    
was  not  currently  a  market   or  company  for  landslide                                                                    
insurance.  She  elaborated  that the  property  market  was                                                                    
shrinking   and  natural   disasters  including   wildfires,                                                                    
atmospheric rivers,  and storms causing billions  of dollars                                                                    
of  property damage  worldwide were  impacting  the cost  of                                                                    
property insurance.  She noted  that landslides were  on the                                                                    
list among  other including wildfires in  Central Alaska and                                                                    
melting permafrost. She emphasized  that because of changes,                                                                    
it was becoming  harder and harder to insure.  She knew that                                                                    
Southeast  Alaska  had a  huge  problem  with landslide  and                                                                    
mudslide insurance.                                                                                                             
                                                                                                                                
Representative  Bynum  stated  it   was  difficult  to  tell                                                                    
community members  living in the  middle of town  that their                                                                    
homes and live  savings could be lost with no  way to recoup                                                                    
them.  He understood  there was  insurance against  fire and                                                                    
other things. He  stated that living right in  the middle of                                                                    
a community  with no assurances made  people lose confidence                                                                    
in their ability to live  in Alaska communities. He remarked                                                                    
that it was a big concern for him.                                                                                              
                                                                                                                                
Co-Chair  Foster   asked  if  the   fiscal  note   would  be                                                                    
forthcoming later in the evening or the following day.                                                                          
                                                                                                                                
Mr. Anderson shared that he  had been notified by DCCED that                                                                    
it trying to get the  fiscal note to the committee hopefully                                                                    
for distribution during the current  evening, so that if and                                                                    
when  the  bill  moved,  the  attached  fiscal  notes  would                                                                    
reflect the current version of the bill.                                                                                        
                                                                                                                                
7:26:05 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
7:29:19 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster relayed that a  bill could be passed without                                                                    
the  updated fiscal  note as  long as  the updated  note was                                                                    
received before the  bill was sent on from  the committee to                                                                    
the House floor. He planned  to have the updated fiscal note                                                                    
by  the  time  the  bill  was heard  by  the  committee  the                                                                    
following day.                                                                                                                  
                                                                                                                                
Representative  Galvin referenced  Ms. Wing  Heier's earlier                                                                    
discussion about  changing some fees from  $3,000 to $6,000.                                                                    
She understood the fees had  not been changed in many years.                                                                    
She asked if the updated fees  would fall in line with other                                                                    
existing fees and move the target to the right number.                                                                          
                                                                                                                                
Ms.  Wing-Heir responded  that the  $3,000 to  $6,000 was  a                                                                    
threshold for a surcharge  on a workers' compensation policy                                                                    
and did not  go to the state in any  way. She explained that                                                                    
there  was currently  a $300  biannual  fee for  third-party                                                                    
adjusters  and the  legislature was  asking to  increase the                                                                    
number to a biannual fee  of $5,000. There was not currently                                                                    
a fee on pharmacy benefit managers  and the bill would add a                                                                    
$15,000  biannual fee.  She explained  that those  fees fell                                                                    
right in  the middle  of fees charged  in other  states. She                                                                    
relayed  that  Arkansas  charged   $40,000  for  a  pharmacy                                                                    
benefit manager.  She estimated that Alaska  was probably on                                                                    
the low end, but there were  other states like New York with                                                                    
a fee of $25,000 for three years.                                                                                               
                                                                                                                                
Co-Chair  Foster noted  that due  to the  complexity of  the                                                                    
bill, some  committee members had indicated  they would like                                                                    
to  sleep on  it. He  discussed  his schedule  plan for  the                                                                    
following day.                                                                                                                  
                                                                                                                                
7:33:25 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
7:35:16 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster believed the soonest  the bill could be read                                                                    
across on the floor was Monday.                                                                                                 
                                                                                                                                
Co-Chair Schrage relayed that the  soonest the bill could be                                                                    
on  the floor  was  Monday. He  suggested  holding the  bill                                                                    
until  the following  day  to receive  the  fiscal note  and                                                                    
report it out.                                                                                                                  
                                                                                                                                
CSSB 132(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster reviewed  the  schedule  for the  following                                                                    
day.                                                                                                                            
                                                                                                                                
Mr.  Anderson reviewed  the bill  numbers for  the following                                                                    
day's meeting.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
SB054 Additional Documents - ASID Report 3.9.2023.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Additional Documents - Legal Memo 1.5.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Additional Documents - Legal Memo 4.7.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Additional Documents - Sunset Review of AELS Board 4.7.2024.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Additional Documents - USACE Contract Opportunity 1.31.2024.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Explanation of Changes Ver. G to Ver. H (SFIN).pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Explanation of Changes Ver. I to Ver. G (SL&C).pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Public Testimony - Letter - AIA 2.3.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Public Testimony - Letter - ENSTAR 2.26.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Public Testimony Rec'd by 4.16.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Public Testimony Rec'd by 5.2.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Sectional Analysis Ver. H 5.2.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB054 Sponsor Statement Ver. H 5.2.2025.pdf HFIN 5/17/2025 10:00:00 AM
SB 54
SB137 Explanation of Changes Ver. A to Ver. N.pdf HFIN 5/17/2025 10:00:00 AM
SB 137
SB137 Sectional Analysis Ver. N.pdf HFIN 5/17/2025 10:00:00 AM
SB 137
SB137 Sponsor Statement Ver. N.pdf HFIN 5/17/2025 10:00:00 AM
SB 137
SB132 Draft Proposed CS ver W.pdf HFIN 5/17/2025 10:00:00 AM
SB 132
SB132 Public Testimony-Letter-Fairbanks Chamber 04.04.25.pdf HFIN 5/17/2025 10:00:00 AM
SB 132
SB132 Public Testimony-Letter-United Policyholder 04.09.25.pdf HFIN 5/17/2025 10:00:00 AM
SB 132
SB132 Sectional Analysis ver 34-LS0415-W.pdf HFIN 5/17/2025 10:00:00 AM
SB 132
SB132 Sectional Summary ver 34-LS0415-T.pdf HFIN 5/17/2025 10:00:00 AM
SB 132
SB132 Sponsor Statement ver 34-LS0415-T.pdf HFIN 5/17/2025 10:00:00 AM
SB 132
SB132 Summary of Changes ver T to ver W.pdf HFIN 5/17/2025 10:00:00 AM
SB 132
SB 54 Public Testimony Rec'd by 051725.pdf HFIN 5/17/2025 10:00:00 AM
SB 54