Bill Text: PA HB59 | 2011-2012 | Regular Session | Introduced

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Bill Title: Establishing the Office of Consumer Advocate for Health Insurance as an office within the Office of Consumer Advocate and prescribing its powers and duties; establishing the Consumer Advocate for Health Insurance Fund; and making editorial changes.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2011-01-19 - Referred to INSURANCE [HB59 Detail]

Download: Pennsylvania-2011-HB59-Introduced.html

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PRINTER'S NO. 27
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 59 Session of2011
INTRODUCED BY HARPER, BARRAR, B. BOYLE, BRIGGS, DeLUCA, FABRIZIO, FARRY, FREEMAN, GINGRICH, GOODMAN, HENNESSEY, HORNAMAN, MUNDY, O'NEILL, PETRI, SCAVELLO, SCHRODER, SHAPIRO, VULAKOVICH, WAGNER, WATSON, YOUNGBLOOD AND JOSEPHS, JANUARY 19, 2011
REFERRED TO COMMITTEE ON INSURANCE, JANUARY 19, 2011
AN ACT
Amending the act of April 9, 1929 (P.L.177, No.175), entitled
"An act providing for and reorganizing the conduct of the
executive and administrative work of the Commonwealth by the
Executive Department thereof and the administrative
departments, boards, commissions, and officers thereof,
including the boards of trustees of State Normal Schools, or
Teachers Colleges; abolishing, creating, reorganizing or
authorizing the reorganization of certain administrative
departments, boards, and commissions; defining the powers and
duties of the Governor and other executive and administrative
officers, and of the several administrative departments,
boards, commissions, and officers; fixing the salaries of the
Governor, Lieutenant Governor, and certain other executive
and administrative officers; providing for the appointment of
certain administrative officers, and of all deputies and
other assistants and employes in certain departments, boards,
and commissions; and prescribing the manner in which the
number and compensation of the deputies and all other
assistants and employes of certain departments, boards and
commissions shall be determined," establishing the Office of
Consumer Advocate for Health Insurance as an office within
the Office of Consumer Advocate and prescribing its powers
and duties; establishing the Consumer Advocate for Health
Insurance Fund; and making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Article IX-A of the act of April 9, 1929 (P.L.
177, No.175), known as The Administrative Code of 1929, is
amended by adding a subarticle heading to read:
ARTICLE IX-A
OFFICE OF CONSUMER ADVOCATE
(a) General Provisions
Section 2. Article IX-A of the act is amended by adding a
subarticle to read:
(b) Office of Consumer Advocate for Health Insurance
Section 921-A. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Consumer." A person who is a named insured, insured or
beneficiary of a policy of health insurance, including, but not
limited to, employers who purchase group insurance for
themselves and their employees, or any other person who may be
affected in any way by the Insurance Department's exercise of or
the failure to exercise its authority.
"Consumer advocate." The Consumer Advocate for Health
Insurance established in this subarticle.
"Department." The Insurance Department of the Commonwealth.
"Fund." The Consumer Advocate for Health Insurance Fund
established in this subarticle.
"Health insurer." Any "company," "association" or "exchange"
as such terms are defined in section 101 of the act of May 17,
1921 (P.L.682, No.284), known as The Insurance Company Law of
1921 or any entity that provides health insurance and is subject
to 40 Pa.C.S. Ch. 61 (relating to hospital plan corporations) or
63 (relating to professional health services plan corporations)
or Article XXIV of The Insurance Company Law of 1921 or the act
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of December 29, 1972 (P.L.1701, No.364), known as the Health
Maintenance Organization Act.
"Office." The Office of Consumer Advocate for Health
Insurance established in this subarticle.
Section 922-A. Office of Consumer Advocate for Health
Insurance.
(a) Establishment of office.--The Office of Consumer
Advocate for Health Insurance is established within the Office
of Attorney General to represent the interests of consumers
before the department.
(b) Consumer Advocate for Health Insurance.--
(1) The office shall be headed by the Consumer Advocate
for Health Insurance appointed by the Governor with the
advice and consent of the Senate, who by reason of training,
experience and attainment is qualified to represent the
interests of consumers.
(2) The term of the consumer advocate shall be for six
years.
(3) Compensation of the consumer advocate shall be set
by the Attorney General.
(c) Conflict of interest.--No individual who serves as the
consumer advocate shall, while serving in the position, engage
in any business, vocation or other employment, or have other
interests, inconsistent with the official responsibilities, nor
shall the individual seek or accept employment nor render
beneficial services for compensation with any health insurer
subject to the authority of the office during the tenure of the
appointment and for a period of two years immediately after the
appointment is served or terminated.
(d) Restriction.--Neither the consumer advocate nor an
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employee of the consumer advocate shall be employed by or be
pecuniarily interested in any health insurance company,
association or exchange, or in any health insurance business,
other than as a policyholder.
(e) Political office.--No individual who is appointed as
consumer advocate may seek election nor accept appointment to
any political office during the tenure as consumer advocate and
for a period of two years after the appointment is served or
terminated.
Section 923-A. Assistant consumer advocates for health
insurance; employees.
The consumer advocate shall appoint attorneys as assistant
consumer advocates for health insurance and additional clerical,
technical and professional staff as may be appropriate, and may
contract for additional services as shall be necessary for the
performance of the duties imposed by this subarticle. The
compensation of assistant consumer advocates for health
insurance and clerical, technical and professional staff shall
be set by the Attorney General. No assistant consumer advocate
for health insurance or other staff employee shall, while
serving in the position, engage in any business, vocation or
other employment, or have other interests, inconsistent with
official responsibilities.
Section 924-A. Powers and duties.
(a) Representation of consumer interests.--In addition to
any other authority conferred by this subarticle, the consumer
advocate shall, in carrying out the responsibilities under this
subarticle, represent the interests of consumers as a party, or
otherwise participate for the purpose of representing an
interest of consumers, before the department in any matter
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properly before the department, and before any court or agency,
initiating proceedings if, in the judgment of the consumer
advocate, the representation may be necessary, in connection
with any matter involving regulation by the department or the
corresponding regulatory agency of the United States, whether on
appeal or otherwise initiated.
(b) Exercise of discretion.--
(1) The consumer advocate may exercise discretion in
determining the interests of consumers that will be advocated
in any particular proceeding and in determining whether to
participate in or initiate any particular proceeding.
(2) In making a determination, the consumer advocate
shall consider the public interest, the resources available
and the substantiality of the effect of the proceeding on the
interests of consumers.
(3) The consumer advocate may refrain from intervening
when, in the judgment of the consumer advocate, intervention
is not necessary to represent adequately the interests of
consumers.
(c) Action on petition.--
(1) In addition to any other authority conferred by this
subarticle, the consumer advocate may represent an interest
of consumers that is presented for consideration upon
petition in writing by a substantial number of persons who
are consumers of a health insurer subject to regulation by
the department.
(2) The consumer advocate shall notify the principal
sponsors of the petition within a reasonable time after
receipt of the petition of the action taken or intended to be
taken with respect to the interests of consumers presented in
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that petition.
(3) If the consumer advocate declines or is unable to
represent the interests, written notification and the reasons
for the action shall be given to the sponsors.
(d) Name in which action is brought.--
(1) Any action brought by the consumer advocate before a
court or an agency of this Commonwealth shall be brought in
the name of the consumer advocate.
(2) The consumer advocate may designate a consumer or
group of consumers in whose name the action may be brought or
may join with a consumer or group of consumers in bringing
the action.
(e) Public statement.--At a time that the consumer advocate
determines, in accordance with applicable time limitations, to
initiate, intervene or otherwise participate in a department,
agency or court proceeding, the consumer advocate shall issue
publicly a written statement, a copy of which shall be filed in
the proceeding in addition to any required entry of appearance,
stating concisely the specific interests of consumers to be
protected.
Section 925-A. Duties of department.
In dealing with any proposed action that may substantially
affect the interests of consumers, including, but not limited
to, a proposed change of rates and the adoption of rules,
regulations, guidelines, orders, standards or final policy
decisions, the department shall:
(1) Notify the consumer advocate when notice of the
proposed action is given to the public or at a time fixed by
agreement between the consumer advocate and the department in
a manner to assure the consumer advocate reasonable notice
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and adequate time to determine whether to intervene in the
matter.
(2) Consistent with its other statutory
responsibilities, take action with due consideration to the
interests of consumers.
Section 926-A. Assessment upon insurance companies,
disposition, appropriation and disbursement of
assessments.
(a) Estimate of expenditures.--
(1) Before November 1 of each year, the office shall
estimate the total expenditures for the office and submit the
estimate to the Governor in accordance with section 610.
(2) At the same time the consumer advocate submits the
estimate to the Governor, the consumer advocate shall also
submit that estimate to the General Assembly.
(3) The estimate shall not exceed an amount equal to the
total assessments as provided in this section.
(b) Budget procedures.--
(1) The consumer advocate or designated representatives
shall be afforded an opportunity to appear before the
Governor, the Appropriations Committee of the Senate and the
Appropriations Committee of the House of Representatives
regarding the estimate.
(2) If the General Assembly fails to approve the
consumer advocate's budget for the purposes of this section
by March 30, the department shall assess insurers on the
basis of the assessment provided in this section.
(3) At such time as the General Assembly approves the
proposed budget, the consumer advocate and the department
shall make an adjustment in the assessments to reflect the
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approved budget.
(4) The office shall subtract from the budget finally
approved by the General Assembly any balance of the
appropriation to be carried over into the fiscal year from
the preceding fiscal year.
(c) Assessment.--For fiscal year 2011-2012 an assessment on
each health insurer who writes coverages for health and health
under life/annuity/accident, including annuities, in this
Commonwealth shall be made. Each health insurer shall be
assessed an amount equal to the product obtained by multiplying
$2,000,000 by a fraction, the numerator of which is the direct
premium collected for all coverages by that health insurer in
this Commonwealth during the preceding calendar year and the
denominator of which is the direct premium written on such
coverages in this Commonwealth by all health insurers in the
same period.
(d) Adjustment.--In succeeding years the General Assembly
may vary the base amount of $2,000,000 based upon the actual
funding experience and requirements of the office.
(e) Fund.--All assessments received, collected or recovered
under this subarticle shall be paid by the department into a
separate account in the State Treasury, to be known as the
Consumer Advocate for Health Insurance Fund through the
Department of Revenue.
(f) Use of fund.--All assessments paid into the Consumer
Advocate for Health Insurance Fund shall be held in trust solely
for the purpose of defraying the cost of the administration and
performance of the duties of the office, related judicial
proceedings and other such matters within the jurisdiction of
the office, and shall be earmarked for the use of, and annually
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appropriated to, the office for disbursement solely for that
purpose. The fund shall be subject to audit by the Auditor
General.
(g) Construction.--Assessments made under this section shall
not be considered burdens and prohibitions under section 212 of
the act of May 17, 1921 (P.L.789, No.285), known as The
Insurance Department Act of 1921.
(h) Requisitions.--All requisitions upon the appropriation
shall be signed by the consumer advocate or the deputies that
the consumer advocate may designate in writing to the State
Treasurer and shall be presented to the State Treasurer for
payment in the manner prescribed under the act of April 9, 1929
(P.L.343, No.176), known as The Fiscal Code.
(i) Balance.--In the event that the fund is dissolved or the
office is abolished by operation of law, any balance remaining
in the fund, after deducting administrative costs for
liquidation, shall be returned to insurers in proportion to
their financial contributions to the fund in the preceding
calendar year.
Section 927-A. Reports.
The consumer advocate shall annually transmit to the
Governor, to the Attorney General and to the General Assembly,
and shall make available to the public, an annual report on the
conduct of the office. The consumer advocate shall make
recommendations as may from time to time be necessary or
desirable to protect the interests of consumers.
Section 928-A. Savings provision and construction.
(a) No bar to action.--Nothing contained in this subarticle
shall limit the right of a consumer to bring a proceeding before
either the department or a court.
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(b) No impairment to department.--Nothing contained in this
subarticle shall be construed to impair the statutory power or
duty of the department to regulate health insurers in the public
interest.
Section 3. This act shall take effect as follows:
(1) The addition of section 926-A of the act shall take
effect in 90 days.
(2) This section shall take effect immediately.
(3) The remainder of this act shall take effect
immediately.
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