Banking and Insurance Committee Approves HealthNET PA Bills

Two Mortgage Reform Bills Also Endorsed

The Senate Banking and Insurance Committee today approved three bills in the HealthNET PA legislative package intended to improve health care access and coverage (Senate Bills 442, 443 and 189) and two mortgage reform bills (Senate Bills 170 and 171), according to Committee Chairman Senator Don White (R-41).

Senate Bill 442, introduced by Senator White, amends the Insurance Company Law of 1921 to create a Mini-COBRA Small Employer Group Health Plan in the Commonwealth. The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) provides former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates when coverage is lost due to certain specific events. However, these benefits only apply to employers with 20 or more employees. SB 442 would extend the COBRA guidelines to group plans that employ 2-19 employees.

“This legislation could provide an important safety net to an estimated 150,000 individuals who worked for small businesses but are between jobs,” Senator White said. “This benefit is already in place for larger companies. It is time we make it part of the health insurance network for small businesses as well. In addition, this program will enable more Pennsylvanians to take advantage of the relief offered in the federal stimulus package.”

The American Recovery and Reinvestment Act of 2009 (“ARRA”) enacted on Feb. 17, 2009, also known as the federal stimulus act, provides a 65 percent federal subsidy for COBRA premiums. The subsidy is good for up to nine months for those who worked for an employer with 20 or more employees and are eligible to keep their employer plan under COBRA. The subsidy is good for up to six months for people who worked for a small business with fewer than 20 workers and are eligible to continue their employer plan through a state continuation program, such as the Mini-COBRA program established by SB 442.

Senate Bill 443, also introduced by Senator White, would permit health insurers to withhold payment to providers in the event of a medical error. “Medicare has already stopped reimbursing providers for the cost of medical-related infections and mistakes and it is time that we give health insurance companies the same opportunity,” Senator White said. “This bill reduces health care insurance costs while pushing providers to eliminate mistakes.”

Senate Bill 189, introduced by Senator Jake Corman (R-34), would extend health insurance coverage, at the expense of policyholders, to adult dependent children up to the age of 30 who are not married, have no dependents, are residents of the Commonwealth or enrolled as a full-time student at an institution of higher education and are not provided insurance coverage or eligible for government benefits. Insurers would be able to determine increases in the premium to cover this additional benefit.

“Looking at the demographics in Pennsylvania, the largest segment of the uninsured are young adults age 18 to 34,” Senator Corman said. “This legislation would provide an option that would enable some of those young adults to receive the benefits of health insurance coverage.”

The 15-bill HealthNET PA package (Including Senate Bills 189, 442 and 443) includes legislation that would develop or expand health care clinics across Pennsylvania to provide “medical homes” for 175,000 working-poor clients and ease pressure on hospital emergency rooms. The HealthNET PA plan would expand access to health care and medicine to more than 500,000 uninsured and low-income working Pennsylvanians. It would utilize information technology to control costs and reduce health care-associated infections, and provide expanded insurance options for employers and families, and will incorporate the concepts of disease prevention and wellness.

In addition to the HealthNET PA bills, the Banking and Insurance Committee also approved two bills sponsored by Senator Mike Brubaker (R-36) to protect consumers from fraud perpetrated by unscrupulous mortgage brokers.

Senate Bill 170 would prohibit a mortgage broker or originator from being the exclusive recipient of communications to a consumer. The legislation would prevent brokers from withholding information about interest rates, fees or monthly payments, and would ensure that consumers are informed of the terms of their mortgage.

Senate Bill 171 would protect mortgage company employees that report illegal activities or take part in an investigation, hearing or inquiry by preventing employers from taking actions such as reducing an employee’s salary or benefits, changing the terms of employment, or firing an employee.

Senator Brubaker introduced the bills in response to the OPFM mortgage scandal that swindled more than $26 million from Pennsylvania homeowners. “I am still hearing from families that were victimized in Lancaster County as they struggle to make payments on mortgages they thought they had paid in full,” Senator Brubaker said. “We need to take every necessary step to make certain this does not happen again.”

Tim Nyquist
Phone: (717) 787-1377
Joe Pittman
Phone: (717) 787-8724
Kristin Crawford
Phone: (717) 787-4420