THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BAKER, MICOZZIE, CLYMER, SAYLOR, BOYD, CHRISTIANA, CUTLER, ELLIS, EVERETT, FRANKEL, GABLER, GEIST, GINGRICH, GOODMAN, GROVE, KAUFFMAN, KILLION, PICKETT, REICHLEY, ROAE, SCHRODER, STERN, SWANGER, J. TAYLOR, VULAKOVICH, WATSON, CAUSER AND BARRAR, JANUARY 19, 2011

REFERRED TO COMMITTEE ON INSURANCE, JANUARY 19, 2011  

AN ACT

Providing for affordable health insurance.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Affordable

Health Insurance Act.

Section 2.  No unfair trade practice.

Insurers that include and operate wellness and health

promotion programs, disease and condition management programs,

health risk appraisal programs and similar provisions in their

high deductible health policies in keeping with Federal

requirements shall not be considered to be engaging in unfair

trade practices under any provision of law relating to unfair

trade practices with respect to the practices of illegal

inducements, unfair discrimination and rebating.

Section 3.  No required relationship.

There shall be no required relationship between preferred

provider and nonpreferred provider plan reimbursements for

health savings account-eligible high deductible plans using

nonpreferred provider reimbursements. Such plans shall not:

(1)  unfairly deny health benefits for medically

necessary covered services;

(2)  have differences in benefit levels payable to

preferred providers compared to other providers that unfairly

deny benefits for covered services;

(3)  have a plan coinsurance percentage applicable to

benefit levels for services provided by nonpreferred

providers that is less than 60% of the benefit levels under

the policy for such services; or

(4)  have an adverse effect on the availability or the

quality of services.

Section 4.  Health reimbursement arrangement-only plans.

The following shall apply:

(1)  The Insurance Commissioner shall be authorized to

allow health reimbursement arrangement-only plans that

encourage employer financial support of health insurance or

health-related expenses recognized under Federal law.

(2)  Health reimbursement arrangement-only plans that are

not sold in connection with or packaged with health insurance

coverage shall not be considered insurance.

(3)  Individual health insurance policies funded through

health reimbursement arrangement-only plans shall not be

considered employer sponsored or group coverage, and nothing

in this section shall be interpreted to require an insurer to

offer an individual health insurance policy for sale in

connection with or packaged with a health reimbursement

arrangement-only plan or to accept premiums from health

reimbursement arrangement-only plans for individual health

insurance policies.

Section 5.  Deductions.

In addition to other deductions allowed by law, a taxpayer in

this Commonwealth may deduct from taxable income for State

income tax purposes an amount equal to 100% of the premium paid

by the taxpayer during the taxable year for high deductible

health plans which are eligible to be used with a health savings

account under the applicable provisions of section 223 of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

223) to the extent the deduction has not been included in

Federal adjusted gross income and the expenses have neither been

provided from a health reimbursement arrangement nor included in

itemized nonbusiness deductions excluded from the taxpayer's

taxable income.

Section 6.  Credits.

The following shall apply:

(1)  A taxpayer shall be allowed a credit against the

income tax imposed by law for qualified health insurance

expenses in an amount of $250 for each employee enrolled for

12 consecutive months in a qualified health insurance plan if

qualified health insurance is made available to all of the

employees and compensated individuals of the employer under

the applicable provisions of section 125 of the Internal

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 125).

(2)  In no event shall the total amount of the tax credit

under this section for a taxable year exceed the taxpayer's

income tax liability. Any unused tax credit shall be allowed

the taxpayer against succeeding years' tax liability. No such

credit shall be allowed the taxpayer against prior years' tax

liability.

(3)  The Department of Revenue shall promulgate rules and

regulations necessary to implement and administer this

section.

(4)  The credit allowed by this section shall apply only

with regard to qualified health insurance expenses.

(5)  As used in this section, the following words and

phrases shall have the meanings given to them in this

paragraph:

"Qualified health insurance."  A high deductible health plan

that includes, at a minimum, catastrophic health care coverage

which is eligible to be used with a health savings account under

the applicable provisions of section 223 of the Internal Revenue

Code of 1986 (Public Law 99-514, 26 U.S.C. § 223).

"Qualified health insurance expense."  The expenditure of

funds of at least $250 annually for health insurance premiums

for qualified health insurance.

"Taxpayer."  An employer who employs directly, or who pays

compensation to individuals whose compensation is reported on

Internal Revenue Service Form 1099, 50 or fewer persons and for

whom the employer provides high deductible health plans, that

include catastrophic health care coverage, which are established

and used with a health savings account under the applicable

provisions of section 223 of the Internal Revenue Code of 1986

(Public Law 99-514, 26 U.S.C. § 223) and in which the employees

are enrolled.

Section 7.  Exemption from insurance premium tax.

Insurers shall be exempt from otherwise applicable taxes on

insurance premiums paid by residents for high deductible health

plans eligible to be used with a health savings account under

the applicable provisions of section 223 of the Internal Revenue

Code of 1986 (Public Law 99-514, 26 U.S.C. § 223).

Section 8.  Duties of Insurance Commissioner.

The Insurance Commissioner shall:

(1)  Develop flexible guidelines for coverage and

approval of health savings account eligible high deductible

plans designed to qualify under Federal and State

requirements as high deductible health plans for use with

health savings accounts.

(2)  Encourage and promote the marketing of health

savings account eligible high deductible plans by accident

and sickness insurers. Nothing in this section shall be

construed to authorize the sale of insurance in violation of

requirements relating to the transaction of insurance or

prohibiting the interstate sale of insurance.

(3)  Conduct a study of health savings account eligible

high deductible plans available in all other states and

determine whether, and in what manner, they serve the

uninsured and whether they should be made available to the

citizens of this Commonwealth.

(4)  Develop an automatic or fast track approval process

for health savings account eligible high deductible plans

already approved under the laws and regulations of this

Commonwealth or other states.

(5)  Promulgate rules and regulations for the design,

promotion and regulation of health savings account eligible

high deductible plans, including rules and regulations for

expedited review of standardized policies, advertisements,

solicitations and other matters deemed relevant.

Section 9.  Effective date.

This act shall take effect in 60 days.