HB 28-FIRE AND EMERGENCY MEDICAL SERVICES  8:05:58 AM CO-CHAIR NAGEAK announced that the first order of business would be HOUSE BILL NO. 28, "An Act exempting solicitations or voluntary agreements to provide ambulance, emergency, or fire department services from regulation as insurance." 8:06:13 AM REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, speaking as the sponsor of HB 28, paraphrased from the following written statement [original punctuation provided]: HB 28 addresses an issue important to many organizations: Money. It is great to be able to look to someone, such as the State of Alaska, for money. However, even if money is available for projects, such as buying new equipment or repairing a building, money is very rarely available for operating expenses. Fire Departments, ambulance services, and other emergency service organizations often struggle to keep the doors open. In many communities, the power to levy taxes often provides sufficient funding to operate these departments. When it doesn't, or isn't an option, organizations turn to other types of sources for money. Sometimes it's a pancake supper or a fish fry. Maybe it's a bake sale or some other project. How about BINGO? In different communities, different things work. The problem with these types of activities is they take even more of the emergency volunteer's time. Time they need to spend training and responding to emergencies. Donations also are very helpful. But, it is becoming increasing difficult to convince people to give money to an organization. One alternative to encourage people to help support fire and EMS services in the community is to offer a "no charge" policy to those that give to the organization. Unfortunately, such a simple concept is considered insurance in Alaska and subject to numerous laws and regulations. If you just charge the individual for an ambulance transport, it's not a problem. But, if you ask for money up front to keep gas in the ambulance and the station heated in exchange for not charging the individual if you transport them it's insurance and subject to all of the regulations of the Division of Insurance. In a similar situation, a community that has no fire department might want to start one. Often, organizations charge if they have to come help you. Others ask for donations. In some areas, you might hear it referred to it as a subscription. In a subscription department, if you pay in advance to receive the service, then the organization that agrees to provide you with that service doesn't charge you additional fees, you are providing insurance if others are charged for the service. This bill is fairly simple, it exempts municipalities and community non-profit organizations from regulation if they receive money in advance and then don't charge for services offered to those that give donations. Our intent is to provide a mechanism for an organizations to entice donations and financial support by allowing them to waive fees to those that provide an agreed upon level of financial support in advance of the possibility that services might be provided at some time in the future. There is no guarantee that the organization will be able to provide the needed services, just as there is no guarantee now. This bill simply allows the organization, if it so choses, to waive its fees to those that support the organization and keep the doors open, the lights on, the building heated, and fuel in the trucks - without being regulated by the Division of Insurance. I am happy to answer any questions you may have. REPRESENTATIVE FEIGE then disclosed that he started the Chickaloon Fire Service Department, of which he is currently the chief. He noted that the Chickaloon Fire Department is a subscription department that provides a basic level of fire service for the Chickaloon community. 8:10:24 AM CO-CHAIR LEDOUX inquired as to how the fire departments came to know that [subscription service] is considered insurance and should be regulated by the Division of Insurance. REPRESENTATIVE FEIGE stated that the [Chickaloon Fire Department] had no idea that subscription service wasn't something it could do and other fire departments, including Deltana and Salcha, did it as well. Representative Feige clarified that HB 28 simply exempts [ambulance, emergency, or fire department services] from regulation as insurance. In further response, Representative Feige said that the violation was brought to the attention of the Chickaloon Fire Department in discussions with other departments. He noted that the Division of Insurance really hasn't contacted the [Chickaloon Fire Department] about this. 8:12:51 AM MICHAEL PASCHALL, Staff, Representative Eric Feige, Alaska State Legislature, began by disclosing that he is the assistant chief and secretary to the Rural Deltana Fire Department, which could be impacted by this legislation. In response to Co-Chair LeDoux, Mr. Paschall clarified that the City of Delta Junction asked the Division of Insurance for an interpretation [of the subscription service] and the division responded that it was insurance, and thus couldn't continue. 8:13:40 AM REPRESENTATIVE DRUMMOND inquired as to how a subscription fire and ambulance service works. REPRESENTATIVE FEIGE explained that volunteer fire departments have operating expenses for which they have to raise funds. Under the subscription method, people would sign up and pay a fee to the fire department; the fee would be good for perhaps a year. In Chickaloon, the fire department would respond/provide services to those who subscribed and paid the fee. The Chickaloon Fire Department also decided to respond to all wild land fires in the community. Although only responding to those calls from subscribers is a liability, it reflects the reality that it costs money to keep equipment in a state of readiness. 8:15:02 AM REPRESENTATIVE DRUMMOND related her understanding that frequently the cost of ambulance service is reimbursed to those individuals with medical insurance. However, if HB 28 passes and there is no charge to the individual with medical insurance for receiving ambulance service, then there would be no reimbursement by their medical insurance company. MR. PASCHALL clarified that the scenario is one in which there is an agreement between the individual patient and the insurance company. He further clarified that the most common scenario in this type of arrangement is one in which only the individual is released from paying. With the ambulance service, the insurance company is charged and from whom the funds are collected because they are a third party. Again, it's a fundraising mechanism, he remarked. 8:16:28 AM REPRESENTATIVE FOSTER inquired as to whether this method of raising funds is fairly common in other states. MR. PASCHALL informed the committee that the subscription service is actually how most fire departments started in the late 1700s. The situation is one in which the interpretation of Alaska statute has been that [subscription service] is insurance. The intent of HB 28 is to allow organizations to continue [subscription service] without having to bond, hire an insurance agent, a broker, etcetera. He specified that this exemption is for small nonprofit municipal organizations not for private companies. 8:17:49 AM CO-CHAIR LEDOUX asked whether other states have a statute such as this. If so, have insurance companies attempted to avoid reimbursing for ambulance service, she further asked. MR. PASCHALL answered that he wasn't familiar with such situations, but noted that he hasn't done extensive research on that. He suggested that representatives of the North Star Fire Department and the Division of Insurance may be able to provide an answer. 8:18:46 AM REPRESENTATIVE REINBOLD thanked the sponsor and his staff for starting and being a part of volunteer fire service. She asked whether the volunteer fire departments have to have insurance. MR. PASCHALL explained that the departments maintain a certain level of insurance and HB 28 doesn't impact that. This legislation only impacts the fee transaction between a donor to the department and someone who later becomes a customer of the department, HB 28 doesn't pertain to any of the rules that govern the insurance of the organization itself. 8:22:01 AM CO-CHAIR NAGEAK opened public testimony on HB 28. 8:22:45 AM The committee took an at-ease from 8:22 a.m. to 8:24 a.m. 8:24:22 AM MIKE TVENGE, City Administrator, City of Delta Junction, began by relating the mayor and city council's support for HB 28. He informed the committee that in 2008 when the city learned of the subscription service and insurance conflict, it made an inquiry to the Division of Insurance. Upon request, the division made a clear legal response to the city that resulted in the city amending its ordinance to reflect the state's position. After amending the ordinance, there was an approximate 50 percent decrease in voluntary donations. The aforementioned is why the City of Delta Junction asked its representative to introduce legislation addressing the matter. The intent of HB 28 is to assist volunteer emergency services in the collection of revenue to continue providing these volunteer services. Mr. Tvenge opined that HB 28 could help smaller communities across the state. 8:25:52 AM JEFF TUCKER, Fire Chief, North Star Volunteer Fire Department; Past President, Alaska Fire Chiefs Association (AFCA), related AFCA's support for HB 28. With regard to the medical insurance question, Mr. Tucker explained that nationally the subscription fees typically pay for the upfront personal costs of the individual, but third party billing of the insurance companies is typical. This just relieves the obligation of the individual to pay the insurance, he further explained. 8:26:48 AM CO-CHAIR LEDOUX posed a situation in which the fire department bills the insurance company for an individual who isn't obligated to pay the insurance company. If the insurance company pays the fire department, she asked whether the fire department reimburses the funds to the individual who had a subscription. MR. PASCHALL explained that it's a situation in which an individual who lives in a rural community supports the local fire/ambulance service through a donation. In return, the fire/ambulance service doesn't hold the individual personally responsible for the charges, but will bill the insurance company. The aforementioned typically isn't a formal written contract for a defined service with a specified fee, which is what the insurance laws were written to address. He further clarified that this is not a situation regarding how to regulate the provision of specific services for specific fees at certain rates rather the individual is being rewarded for helping the community provide a service on an ongoing basis. The fact that a third party insurance company is involved is merely a result of the fact that the individual has insurance that provides medical transport coverage. The risk for the [fire/ambulance service] is that some individuals have such insurance and some do not. In most of these cases the cost of running a call is relatively small, while the operating costs makeup the bulk of the expenses. 8:30:54 AM MARTY HESTER, Deputy Director, Division of Insurance, Department of Commerce, Community & Economic Development, related that the Division of Insurance does not have any objection to the language in HB 28. 8:31:21 AM CO-CHAIR NAGEAK closed public testimony. 8:31:35 AM MR. PASCHALL closed by characterizing HB 28 as a good bill that helps organizations with a current practice and refines the statute as necessary. 8:32:05 AM CO-CHAIR LEDOUX moved to report HB 28 out of committee [with individual recommendations and the accompanying fiscal notes]. There being no objection, HB 28 was reported from the House Community and Regional Affairs Standing Committee.