Legislature(2005 - 2006)BELTZ 211
03/31/2005 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB130 | |
| SB108 | |
| SB142 | |
| SB147 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 142 | TELECONFERENCED | |
| *+ | SB 139 | TELECONFERENCED | |
| *+ | SB 108 | TELECONFERENCED | |
| = | SB 147 | ||
| = | SJR 11 | ||
| = | SB 130 | ||
SB 108-INSURANCE
CHAIR CON BUNDE announced SB 108 to be up for consideration.
LINDA HALL, Director, Division of Insurance, Department of
Community & Economic Development (DCED), said the purpose of SB
108 is to make regulation of insurance more efficient,
consistent and good for consumers. She went through a sectional
analysis that was available in the committee's packets.
2:55:54 PM
She said two sections of the bill have created some controversy.
One deals with service contracts and products called guaranteed
auto protection. It is the intent of the Division of Insurance,
which currently has authority to regulate products under its
very broad definition of insurance, to promulgate regulations
allowing recognition of unique products that are on the market
that don't fit a traditional definition of insurance. She would
like to be able to look at those products and have regulatory
oversight that allows more flexibility than the definition of
insurance has today.
MS. HALL said she has been working with Senator Seekins to
resolve this and feels it can be resolved to all the
stakeholders' interests.
The second section that has caused some interesting discussion
is section 28. She explained:
There is a provision for the division to set some
minimum standards for what's called self-funded
governmental plans. Basically, we're talking here are
not the political subdivisions; it's not
municipalities, it's not school districts. This
specifically speaks to the Union Health Trust. Today,
statutory language gives the Division of Insurance
authority to look at various entities and to determine
if they are not regulated by another entity that
oversees or licenses plans that provide health
coverage, they will fall under Title 21. If those
entities fall under Title 21 today, they would be
regulated as insurers.
In March 2004, at the request of one of the
unions....[to] make a determination whether we had
regulatory oversight. I sent letters to all five union
health trusts asking for information about who
regulated them.... I already have received some
responses to those. We are seeking additional
information to make that preliminary determination.
This section seeks to clarify our statutory oversight
and to set some minimum standards....
CHAIR BUNDE interrupted to say that he had concerns and wanted
her to come back at a future date and give the committee a
detailed response.
MS. HALL replied that she would be happy to do that. Also, she
said, "It's important that there be an objective analysis of
what money is needed to pay benefits to make sure that benefit
money is actually there when it's needed."
CHAIR BUNDE announced that the bill would be held.
SB 108-INSURANCE
CHAIR CON BUNDE announced SB 108 to be back up for consideration
and apologized for not taking public testimony earlier.
COLLEEN SAVOIE, Public Employees Local 71, opposed SB 108. It
imposes unnecessary and costly regulation and burdens to the
trust health plans that were established through the collective
bargaining process to provide benefits to state employees. It
would require the trust to file actuarial reports and other
documents. A Department of Health and Social Services (DHSS)
actuary estimated that it would cost a minimum of $40,000 to
$50,000 per year assuming the actuary was already familiar with
the plan. Administrative costs and legal fees would be related
to the filings as well.
There is a requirement for a fidelity bond covering the trustees
in an amount not less than 10 percent of the benefits paid in
the preceding year. In the case of a larger trust, such as the
FDA, that could mean a bond of as much as $6.4 million, which is
an unusually large bond and it may be difficult to obtain.
MS. SAVOIE said the fiscal note provides for one customer
service specialist, but the number of filings this bill requires
would need more.
CHAIR BUNDE said he has passed her written concerns to the
director and those would be addressed in detail in a later
hearing.
MS. SAVOIE emphasized that the reason trusts are concerned is
because every dollar that goes towards administration is a
dollar that is not used for benefits.
FRANK PUSCHAK, Anchorage, said he is a trustee for a health
plan, but he is speaking for himself. He said the trusts were
set up because the state didn't want to deal with them any more.
Sections 28 and 29 would put them under control of the state,
but the trustees would be doing all the work. SB 108 would cause
unnecessary regulation and burden. He was also confused about
what government plans are covered in the bill; he thought it
could apply to the State of Alaska and municipalities, too.
CHAIR BUNDE thanked him and closed public testimony. He said
those concerns would be addressed before acting on the bill.
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