Insurance & Commerce- House

So for good let's let's get this meeting started. The very first thing I would like to do is I would like to introduce and recognize our actual legislative analyst Michelle Nelson she's here she was not here last time so most substituting for her so she will be our full time person so as when introduced her you guys knowing now helpful she is and all the staff is so she will be here with this so. Unfortunately it appears that none of the bills are actually going to run today the first one on the docket on the agenda as a state docket agenda is represent Pilkington has a bill be asked me this morning to go and move it to deferred so that bill is gonna be moved to the deferred list the other bills some issues have come up in questions one of those is mine it's a great bill but some questions have come up so so at some point we will we will look into that there are a couple things I wanted to do as you guys know we passed a statute last session requiring fiscal impacts and I thought of I've already reached out to numerous members on the procedure and a lot of questions so what I thought we would do is I as I've asked Marty Garrity from BLR to come in really just explain the process and how she sees it playing out and then you can of course ask or any questions that you would like to because again I had some members asking me questions and I thought it be helpful if you will come and do that so Marty whenever you're ready thank you Mr chairman Garrity with the pure of Legislative Research good morning everyone I am here to present on a change in the way that certain bills are going to be handled and requirements in this committee as well as the public health committees. ACT one twelve of the twenty twenty two fiscal session impose there's a couple of things is this bill did with regards to certain insurance bills imposed the bill filing deadline and the fiscal impact statement requirement that the bills that will impose a new or increased cost obligation on health benefit plans including including pharmacy benefits for entities of the state. This includes State and Public School Life and Health Insurance programs run by EVD and self insured plans managed by the various institutions of higher ed the bill filing deadline was established as the fifteenth day calendar day of the session which would have been January twenty third but due to the four day recess for Martin Luther king day it's been extended to January twenty seventh so January twenty seventh is the deadline to file these bills that will require a fiscal impact. Under the act the committee cannot take up a bill that falls within these parameters that requires a fiscal impact Intel that fiscal impact has been submitted to this committee. So last fall who's gonna do the fiscal impact you're wondering the bureau staff is not does not have the capacity to Others information and do these fiscal impact so in the fall Legislative Council authorized the bureau to enter into a contract with the Siegel group to produce the fiscal impacts required by act one twelve the Siegel group was the consultant that assist the Legislative Council an executive subcommittee in taking a a long review of the public school the state public school life insurance health program and coming up with some recommendations for changes that were adopted during that twenty twenty two fiscal session. so Siegel has been tracking the bill since November when pre filing began and is keeping the bureau notified of any bills that will require a fiscal impact. In front of you I believe you should have procedures for the use of the health benefits actuary or those yes okay which were adopted by legislative counsel in October under Act one twelve both the Senate and house insurance and commerce committees are required to adopt procedures for the development of the fiscal impact statement under the proposed procedures Steagall notify the bureau of a bill that has been identified as requirement fiscal impact statement which they have already begun to do. The bureau and this this is running through job there will notify the chair of the committee to which of the bill was referred so there've been several bills in this committee that a Siegel has designated as requiring a fiscal impact Joe has reached out to representative Maddox letting him know Hey these bills have been assigned to your committee and they're on their way. The chair then take the step of notifying the sponsor of the bill to determine if the sponsor plans to move forward with the bill and then that's kind of if the sponsor says you have not filed the bill but I'm not going to run it then there's not not not necessarily in need for that fiscal impact so that's a step to make sure that the chair and the Committee and the sponsor one of fiscal impact for that bill. If the sponsor does move forward wants to move forward then the chair notifies Jill and Siegel proceeds to produce that fiscal impact statement once the fiscal impact statement has been provided the committee will be able to take up that bill if the bill is amended consideration of the bill will be paused until it can be determined whether the amendment requires an update to the fiscal impact statement depending on what it is it may or may not. it's my understanding that when Siegel begins the process for conducting its analysis it will make it data requests from EBD and the very institutions of higher education when Siegel receive the data it will conduct its analysis and then provide the fiscal impact statements we've already reached out to the institutions of higher ed and the bureau has entered into you and use with most of the institutions pirate to receive that data because there is personal health information that we need to account for and so it's an agreement between the bureau and those institutions and we're still working on that data use agreement with EBT. A single will present the fiscal impact analysis of the committee and will either be present in person or virtually be is soon to in order to answer any questions of the members might have. Any questions from the committee. Members if you have any questions now's a now's the time to ask okay I see represent flowers. I was just wondering why we do the. I guess why we did a contract with a private entity verses going hiring in maybe expanding even if temporary that capacity of the FNA. That decision was made by executive subcommittee I think Siegel that the analysis of this data is different than the analysis of state revenues which DFA has this is a whole separate pot of information in terms of claims and A personal health information that I think needs to be held at a different level than DFA okay thank you so much. Thank you represent Ladyman you're recognized. Thank you Mr chairman According this document so we can request that a fiscal impact statement for a draft bill so it does not have to be filed. The correct that is correct and if you do that it's the Speaker and the house that would approve that fiscal impact statement because there is a cost associated with the Steve use of Siegel and we have entered into a contract but it requires the the approval of the Speaker. Thank you Russian person. Thank you Mr chairman of is there any recourse if you disagree with the impact statement to to challenge it. There certainly I would imagine an opportunity especially with the folks from Siegel here presenting to ask them questions to have them account for their their data and their impact also to go back and and review to see if maybe they missed something. Faceoff. Are you got a reserve Ferguson anything okay. margin rose you're recognized yes thank you Mr do you have a. A ball park or maybe kind of a baseline estimate on the return time on these fiscal impact statements we don't this is a completely new product that process for us and so we're looking at kind of retirement as as a our guideline for the retirement subcommittee we engage services of an actuarial company and what happens is there's also the same deadline for retirement bills and what happened the president wanted here he's familiar with this so what. The retirement bills are filed I believe none of them are taken up and tell those fiscal impacts come back from the actuarial company it's gonna take a little bit of time because we're going to have to get the information from those entities and then Seagle will have to process that information I can't give you a timeline I it's not gonna be months but it will be days either. Thank you. Thank you. What is a flowers recognized thank you Mr chairman so since this is something that was a change that was made legislatively and it and I guess we can look forward to this being the process moving forward and I understand. So I just wondered about the deadline you know why is there deadline. since this is new but then I suspect that there's a deadline because of the intensity and comprehensiveness of. The kind of research and work that will have to be done to produce the impact statements by the end of session so that's what I'm assuming yes but for many and. Does that preclude me from. Working on a bill and let's say I've I want to work on it for next session could I still request that that impact to be done so that as I'm working on it or I may even want to do a study moving forward and want that information for next session could act is that permissible it is I think there would be two steps so there is an option to introduce a bill passed the filing deadline it requires a super majority vote of both houses that's similar to retirement bills so that's not I know it's just retirement bills or it for all afford for these bills to. So you can it's in the rules that you can by two thirds vote extend that deadline for a specific bill. Well you may also by may you may also similarly drafted bill and ask the Speaker to approve that that Siegel perform a fiscal impact on that a draft bill. Okay. Thank you. Thank you represent Johnson reports in the queue. Good okay. Thank you for. And I misspoke it's three fourths vote. Thank you for the question round against. Hello I didn't think I was on and. Just sort of follow up to representative flowers question when we talk about the extensive research I presume that Siegel will be working with D. F. and a somewhat to get certain data from them no actually none of the data is held by DFA this is really the impact to the health benefits plan that EBT has that's funded and through an institutions of higher education or self funded so DFA doesn't really hold any of this data. So do you have been a without continue to do other fiscal impact statements absolutely with with regards to revenues and taxes yes thank you. Thank you represent road you're recognized. Okay no I didn't have any questions or. Ferguson we back in the queue. Thank you Mr will signal dynamically score this star statically score and need relate relate figuring in future savings for early intervention I don't know the answer to that but I will find out and and get back to this committee unless you know thank you thank you representive Richardson. Recognized thank you Mr chair so with Siegel how are we paying them or Repin and per project per hour in. What is the rate in which a charging we are paying them on an hourly basis for their services and I don't have the contract with me but I'll get that information back Committee. Thank you operation represent one you're recognized. I was just gonna say it at the front of me that she had been reference to the twenty seven because of the holiday but in retirement some of these impact studies come back real quickly so I mean you'll you'll have bill senator flowing through on an earlier basis but then some of the impact studies will take a significant time. So that that that's the reason for the early deadline but we have bills that Are presented all along until we finish but at some will be quick and then summer going take some time but it works and actuaries will say Hey this is going to this one's going taken some time but through the process if you get a mall presented but just know that it's gone you'll you'll have to talk when you have a bill and say okay give me a time frame on this just depending on the bill depend on how soon you can get to present the bill. Thank you everyone. Miscarry I did just have that's what clarify something submits members reach out to me already about this the process as I understand it is the Siegel group actually makes the determination if a fiscal impact is warranted is that correct that's correct okay thank you have had some members question whether or not it's going to do not and I just want to clarify with the discretion that the Siegel group has all the discretion of the act yes that's correct okay thank you. Up to four hours you're recognized. So when when there is you mentioned the that we have an opportunity to go back and make sure that they don't miss anything challenge for lack of a better word Whatever aspect that we think might not have been fully fleshed out of place not too much or whatever so let's say that I have a bill and they've completed an impact statement. And there are changes made to it from what they initially gave me is that something that is going to be transparent so for example in the past we we Get it impact statement it's before we even get it it's out there on the website attached to the bill that's been filed the short of a process whereby the Speaker would approve it. In draft form once the bill is filed and they completed. Does it automatically go to this is to the system so that it's accessible and transparent to everybody and then if that is changed then there's sort of a impact to. Or do we go back and forth and before they submit anything for completion and it shared with the public. You know those changes are sort of in house. I'd. I am most hesitate to answer I believe that it will go up on the website so we'll get fiscal impact will give it to Michelle shall put it up on the website if there's an amendment to the bill and there's a change just like in Revenue and Tax I believe the various fiscal impacts are posted on there so that would be transparent. And if there's an amendment to the actual impact same thing yes yes. Thank you represent what you're recognized thank you Mr chairman of colleagues I understand all the questions of everything but this is a result of years of neglect as it relates to health benefits involving state employees and teachers know what's new and I know the approach is a more complicated but before that you know we we have they came in here and ask us for a hundred million dollars out of the clear blue one. And not too many years ago we had a two hundred million dollars and trust fund and it just but. So this is an effort to deal with all that and and here again the numbers because I know where that two of the fiscal impact statements in that type of thing but I hope will you know do this for a chance to work because a lot one into to getting to this point by the executive committee of coming up with that that's all I've got Mr thank you. Thank you Watson Johnson you're recognized yes thank you Mr yeah so I heard you say the cigar single group will determine whether a fiscal impact needed but there also is a mechanism correct for a member to request a fiscal impact even if C. we're group says no right so if he gets filed in the sea route determines that there is no imminent fiscal impact needed we have a process we can say we disagree with the the single group and then request that impact statement that's correct the I have a follow up question that if we can so let's say a bill goes to committee gets filed Segal says no fiscal impact needed it gets out of committee gets to the house for or even out of the house to the Senate and then it can any member not just the sponsor raise their hand and say Hey I I think this would be the fiscal impact and if so what's the process to rewind that to get it that would come back to committee would if the Senate request one we didn't is there process to bring it back to the house or is that just we passed that. I would actually deferred to Buddy Johnson on that because that would taken to House parliamentary issues so the process of what that would look like and the ramifications if the house budget that determination I I defer to buddy okay. If that could be a possibility that yes that's a possibility yes okay just to make sure I understand the lay of the land and work I would imagine it would be the same as with scope of practice bills or retirement bills or education bills any bills that you know currently required fiscal impact or have deadlines and something isn't that whatever process that would be in place would be the same for this. Thank you everyone Johnson ridge road recognized yes just kind of a follow up on that as well on requesting a fiscal impact statement even if Segal doesn't necessarily deem it necessary. Who approves that but does that does that to go to the Speaker like a draft bill or is there some other mechanism in place for that the Speaker would approve that thank you. Thank you represent flowers recognized that also as a follow up to represent Johnson's question is this it and I'm I'm hearing that I know but is this fiscal impact in lieu of the DFA fiscal impact or in addition to because you mention it's sort of two different pots of information in lieu of I was in love in lieu of that DFA will not do a fiscal impact that I'm aware of it further for these bills. They don't normally so no okay thank you. Okay I see no further questions hello no you could I add a couple okay just a couple things because I want to be clear these fiscal impacts are only going to be impacts on the public and teacher life insurance programs the EBT in institutions of higher at these fiscal impacts will not be the impact on private entities so it's not gonna be an impact of but it's going to cost Blue Cross blue shield or any and their insurance providers so that's a dead very clear distinction that you need to be aware of the other thing and and I think represent flowers touched upon this this is the process this is the first time we've done this this is Neil. I would suggest that maybe at the end of the session a revisit of did this process work can changes be made you know this was hung up here we need to do it differently so maybe you know again as you go through think about what you might want to consider changing for next session because again it's new and this is the first time we went through this so It's we're all going through this together. Thank you Mister that was very helpful thank you for that clarification about it this does not apply to private entities that's I've had the question come up limit to dress that thank you for that. That was very helpful thank you. Members we have one other one other matter I'd like to attend to the day since we have time we have with us today Tom Considine from in coral which is the National Council of insurance legislators he's with us today and he's asked for just a few minutes of our time to address the committee so he'd like to come to the table introduce yourself. Mr chairman thank you so much so I just can't imagine I'm going to be able to hold the committee to touch a bike that presentations at holy cow that was a tremendous amount of questions what. It's a. Which shows the attention of everyone that's just marvelous I can't sorry I hate excuse me at a minute or two would you go ahead you state your name sure sure it's Tom Considine C. O. N. S. ID I and II the CEO of the National Council of insurance legislators and I'm just really honored to be here today thank you thank you so thanks so much everyone for allowing me a few minutes today And because I mentioned is is a national organization in which the states are members and let me just start off by saying that and close been blast by strong Arkansas support and leadership right now just up at the at the table we have representative Ferguson who is the president of and Carlisle and and just an absolute blessing to the organization and and just the national leader on all these issues and so everyone knows representative Ferguson but to give you a sense of the bipartisan nature of the organization in in twenty eighteen Senator Jason Rapert was the president of the organization so obviously while both are consummate professionals they're not exactly people who see every issue the same way once Democrat wants Republican and and it just gives you a sense of of how bipartisan the organization is in and and prides itself on. it's the only insurer legislation legislative organization in the nation that passes model laws in insurance there's some other organizations that have voting private sector members as well and quell the only the only vote survived by the legislators it's of the legislators by the Legislative so we're very very proud of that it's national in the sense that all fifty states are members some states are contributing members of which Arkansas's one in the sense that they paid dues and then there's stipends available for legislators from those states to attend meetings of that's to stipends per state per meeting however there's also scholarships available for legislators who want to come and try and quell out you know for the first meeting of their second meeting additionally the the officer group is always bipartisan so this year we have representative Ferguson here from from Arkansas the vice president is representative Tom operation he's a Republican from Texas the treasurer's assemblywoman Pam hunter who's an assemblywoman from New York and for the Secretary is senator Paul I. T. who said Republican senator from Minnesota so again it's stuck bipartisan nature of the organization's been around for fifty four years now it started in nineteen sixty nine and what will is the overarching principle that drives the organization is maintaining state regulation of insurance as established by the McCarran Ferguson act in in just a little bit of background on that the state regulation of insurance was always the same it's always how it works here in the United States and then in nineteen forty four the Supreme Court in the case if anyone cares called southeastern underwriters decided that. Well no no no the business of insurance is Interstate Commerce and should be read it should be regulated by Congress and so Congress came back like that in just a couple months impasse McCarron Ferguson acted said no no the business of insurance shall be regulated by the states of the time and have a lot to do with that if you think about it because Congress was kind of busy with other things in nineteen forty four that was a big war going on in the economy was still big problem so Congress gave it right back to the states and it's worked really well ever since that and so that's the overriding goal of the organization and and so there needs to be some coronation there so it's state regulated state legislated of the business of insurance and and you know there's not a lot of the M. A. I. see the National association of insurance commissioners and I see we're very fortunate enough to have a commission on the clean with this is just a rising star over the M. A. I. C. and and we work very closely with him in a quail and just route really really so happy to see his reappointment so one coil is is kind of the analog of of that group on the legislative side and quotas three national meetings a year that have anywhere from you know two hundred and seventy five to four hundred attendees and anywhere from about fifty to seventy five legislator attendees while the country the most the least well attended meeting tends to be the March meeting because so many legislatures are in session as a matter of fact in the in a few years once the current contracts run out will be moving those meetings to a pool of because there are some legislators right some legislatures that adjourned at the end of March will be easier just last year and quell passed for model laws and adopted. Over a red top that over a dozen others model was come up for adoption or sunset every five years so as you know Arkansas led the way with some PBM legislation back in twenty eighteen I actually was surprised that five years ago already so good and quite often a model law based on the Arkansas law and so that'll be up for re adoption and and close this year. the new models in call passed in twenty twenty two were paid family leave bill that represented Ferguson sponsored event quo a regulatory sandbox bill that gives him the flexibility with legislative oversight to allow for innovation and and regulations to keep up with innovation in the insurance sector a delivery network company bill that would establish insurance standards nationwide on a state by state basis for companies like a drizzly enumerates indoor dash and that sort of thing and I was based on the TMC bill which is more commonly known as the over a bill that was passed back in twenty fourteen and and lastly a dog breed underwriting bill that says if you just can't have a a list of dog breeds and says if you have this dog breed you can you can't get homeowners insurance based on the pre there has to be some scientific data to back that up so the seven policy committees that needed every meeting pretty much if you think of a line of insurance there's a policy committee to go with it you know why we've Health up PNC workers comp that sort of thing one day the dedicated to federal and international issues and a couple others in addition to to that stuff there's a fly in that we have every year or and quot legislators from around the country who were who really among the most active flight down to Washington we have typically fifty or sixty meetings with members and senior staff on the hill and we have an amicus program one very limited instances we pick our spots really carefully one was in support of the Arkansas PBM legislation we filed an amicus with the Supreme Court well we didn't get into really the concept of PBM but Baltimore so this the fact that it was there was a case there be. For the court and it was further expansion of a less in a way that unless it was never intended to do that generally used to be that that state commissioners like Commissioner McLean or back when I was Insurance Commissioner New Jersey the state regulated health insurance market represented almost three quarters of the market and with the expansion of a resident's self funded plans going from five thousand employees all the way down to less than a hundred now it's come down to in some states in Texas state regulated market is only about nineteen percent of the market and and that really limits the ability of states to have the ability to be effective laboratories of democracy. So that's really it in in in again though the committee discussed sense of the the scope just last year and twenty twenty two we have a hundred and nine different legislators from around the country last year they they were from thirty six different states the prior year in twenty twenty one we had a hundred and three different legislators from forty two states and we just were but would love to see more more legislators from Arkansas coming joint president for the Senate or meetings and I thank you for your time and happy to answer any questions. Thank you Mr Considine members or any questions. Okay. Nine thank you for your testimony it's a two is a very good group it's been informative for me and I appreciate you coming coming all the way to Arkansas so it's good to see thank you thanks so much great to be here. Members are is the any further business we need to discuss at this time. Okay saying none it is my hope that we can actually take bills next Wednesday I hope we can start that process and be cognizant of the bill filing deadline the miss Garrity mentions obviously you you want to be aware of that but say no further business will adjourn. Thank you. Once the.