Raleigh Report – February 18, 2011

Health Benefit Exchange Bills Introduced

“What the heck is a health benefit exchange?” you may already be asking. HBEs are a little known but critically important part of the Affordable Care Act, the national health care reform legislation passed by Congress and signed by President Obama a year ago. Under that law, most Americans will be required by 2014 to have health care insurance, either provided by an employer or purchased by the individual. Tax incentives are included to help small businesses and lower-income individuals.

HBEs are the marketplace where small businesses and individuals would go to buy insurance coverage. Under the federal law, states can design and create their own HBEs, with some quality and coverage constraints imposed by the federal law. Insurance companies would sell policies there, and federal financial incentives would be available to purchasers. States which do not have HBEs by 2014 would have their residents fall under a federally operated exchange. Since most states don’t want to cede power to the federal government but prefer to maintain the flexibility offered to the states, most are moving to create their own HBEs.

One of the flash points around the creation of these state HBEs has become the question of how much influence insurance companies and providers (doctors, hospitals, etc.) will have in the operation of the HBE. Should insurers and providers be on the governing boards of HBEs? Should they be on advisory panels which could give input, but not make governing decisions? Should they be excluded from governance entirely?

Two bills have been introduced in the General Assembly. One gives a whole lot of influence to insurers and providers. The other gives much, much less.

H 115, NC Health Benefit Exchange Act
Introducers: Reps. Dockham, Brubaker, Wray, and Murry
Status: in House Health and Human Services Comm.
H 115 creates a 12-member Board, including:
• The state Insurance Commissioner, nonvoting
• Someone representing an insurance company, appointed by the Governor.
• Two members of the public, not affiliated with an insurer or provider, and who are likely to be customers of the HBE, one appointed by the Speaker and the other by the President Pro Tem.
• An additional 8 members appointed by the Insurance Commissioner as follows:
o Someone from an insurance company which sells individual policies.
o A representative of the insurance industry, to be recommended by the state’s largest health insurer (that would be Blue Cross Blue Shield, though it is not named in the bill)
o An agent licensed to sell health insurance.
o Two representatives of the providers: one recommended by the NC Medical Society and the other by the NC Hospital Association.
o One representing business and recommended by the NC Chamber (of Commerce).
o One representing small business and recommended by the National Federation of Independent Business.
o One who is either a health policy researcher or a health economist with experience related to the operation of health insurance.

H 126, NC Health Benefit Exchange Act
Introducers: Reps. Insko, Hall, & Fisher
Status: not yet assigned to a committee, but presumably it will also go to House HHS
H 126 would create a 10-member Board, as follows:
• Insurance Commissioner, as a nonvoting member
• Director of the state’s Division of Medical Assistance (which oversees the state’s Medicaid and Health Choice for Children programs)
• Two members appointed by the Governor
o One representing an employer with no more than 50 employees
o One representing an employer with more than 50 employees
• Two members of the public who are likely to be customers of the HBE, one appointed by the Speaker and the other by the President Pro Tem.
• Four members appointed by the Commissioner and with the following expertise and experience:
o state-scale information technology systems (electronic funds transfers, secure data transfers, etc.)
o health economics or health care finance
o actuarial science or risk management
o health policy analysis or health law
H 126 also contains a strong conflict of interest statement that would require Board members to recuse themselves from any official matter in which “the Board member or his or her immediate family has any financial involvement or interest”.

Other New Bills

H 114, Assistance to Voters in Family Care Homes
Introducer: Rep. Setzer
Status: House Elections Comm.
Under H 114, a person with disabilities living in a family care home and who is qualified to vote could be assisted in voting only by his/her legal guardian. Under current law, any voter needing assistance getting in and out of the voting booth or marking their ballot may get it from a list of qualified relatives, from any person of the voter’s choosing (except for an employer or union leader), or from precinct officials. Apparently H 114 would eliminate receiving help from any of those sources other than the legal guardian.

S 47, Restore Partisan Judicial Elections
Introducer: Sen. Tillman
Status: Senate Judiciary I Comm.
Identical to H 64, introduced by Reps. Sager, Dixon, and Cleveland, and in House Elections Comm.
S 47/H 64 would return the election of justices of the NC Supreme Court and judges of the Court of Appeals, superior courts, and district courts to partisan elections. The bills also make possible the primary system necessary for partisan elections.

S 75, Promote Electricity Demand Reduction
Introducer: Sen. Hartsell
Status: Senate Commerce Comm.
Current law requires power companies to generate a certain amount of their electricity through renewable energy and energy efficiency standards. S 75 would add to what qualifies as part of this renewable energy portfolio by including “energy demand reduction,” voluntary programs under which the power companies could turn off certain equipment (e.g., air conditioners) for limited periods of time during peak demand.

H 52, The Castle Doctrine – check H 74
Introducers: Reps. Spear, Owens, Ingle, and Crawford.
Status: House Judiciary Subcommittee B
Identical to S 34, introduced by Sens. Brock, D. Berger, and Harrington, and in Senate Judiciary II.
Currently law authorizes residents to use deadly force (and not limited to guns) on intruders if the occupant reasonably understands the intruder to be intent upon either causing severe bodily harm or committing a felony. H 52/S 34 lowers that standard to authorize the use of deadly force on anyone who has unlawfully and forcefully entered a residence or removed someone from that residence. If someone has unlawfully and forcibly entered a home, then they are presumed to be intent upon committing an unlawful act involving force or violence. So, under current law, if an intruder is clearly in the process of running away, the resident can’t legally shoot to kill. Under H 52/S34, s/he could.

H 63, Firearm in Locked Motor Vehicle/Parking Lot
Introducers: Reps. Shepard, Hilton, Barnhart, and Cleveland
Status: House Judiciary Subcommittee B
H 63 makes it illegal for any “business, commercial enterprise, or employer” to prohibit the transportation and storage of legally owned firearms that are locked and out of sight in motor vehicles. Businesses could be sued if they violate this law or if they fire an employee for transporting a firearm in their own vehicle in compliance with this bill. (Vehicles owned by the employer can be designated as firearm-free.) In addition, businesses can be sued for any bodily harm or death that comes about “as a result” of their prohibition of locked and out-of-sight firearms in motor vehicles. How the bodily harm or death would be a “result” of banning locked-up and out-of-sight guns is not made clear. At the same time, businesses, commercial enterprises, and employers that allow firearms can NOT be sued for any damages that result from the locked and concealed storage of firearms in a motor vehicle.

This bill would probably apply to churches and other communities of faith, as there is no exception for nonprofits. While they are not a “business” or “commercial enterprise,” they are employers, and the bill states clearly its intent to allow citizens to carry and store guns in vehicles in “any place the vehicle is otherwise permitted to be.”

H 111, Handgun Permit Valid in Parks and Restaurants
Introducer: Rep. Hilton
Status: House Judiciary Subcommittee B
Current law prohibits carrying a gun, rifle, or pistol into any establishment serving alcohol. The concept that guns and alcohol don’t mix well seems like reasonable to many people.) H 111 would permit anyone with a concealed handgun permit to bring a firearm into restaurants and other eating establishments where alcohol is served. It would also eliminate the authority currently granted to local governments to prohibit concealed handguns in local government parks.

H 92, Repeal Land Transfer Tax
Introducers: Reps. Howard, Starnes, Brawley, and Jordan
Status: House Finance Comm.
Current law, adopted in 2007, permits local governments to assess certain local option taxes if approved by voters. One of them is a land transfer tax assessed on the value of real estate when it is conveyed to a new owner. It can be up to 0.4% of the sale price. H 92 would eliminate this local option completely. (The conveyance tax paid throughout the state, and split between county and state, would remain in effect.)

H 93, Modify Refundability of EITC
Introducers: Reps. Howard, Setzer, Brubaker, and Starnes
Status: House Finance Comm.
The state Earned Income Tax Credit benefits low-income working families. At the national level, the EITC has been important in lifting working people out of poverty and rewarding work. The state EITC (like the federal one) is refundable, meaning that a taxpayer whose credit is more than the tax s/he owes gets a check for the amount of the difference. H 93 would eliminate the refundability of the EITC. The NC Council of Churches has supported the state EITC, with refundability, and opposes this restriction on the EITC’s benefits for low-income working families.

H 57, Payments for LIEAP/CIP/Utility Payments Only
Introducer: Rep. Burr
Status: House Appropriations Comm.
H 57 would mandate that any assistance provided by the state for heating and cooling expenses be paid directly to the utility provider, instead of to the low-income person in need of assistance. Anyone who is caught using those funds improperly would be subject to penalty by the county department of social services.

H 61, Speaker/Pro Tem Term Limits
Introducer: Rep. Blust
Status: House Judiciary Comm.
H 61 proposes a constitutional change to limit the Speaker of the House and President Pro Tempore of the Senate to two two-year terms. The bill would place a constitutional amendment before the voters of North Carolina in the 2012 election.

H 65, NC Farmers Freedom Protection Act
Introducer: Rep. Bradley
Status: House Agriculture Comm.
Under H 65, all foodstuffs produced in North Carolina and solely for consumption in North Carolina would be exempt from federal regulation. It specifically exempts all “producers, the means of production, and the produce.” These products must be clearly designated to stay within the state and would be subject only to state regulation. This would clearly apply to food safety regulations and, because it exempts “producers,” would also seem to apply to federal protections regarding farmworkers. The bill raises several questions:
• While farmers might like the “freedom” from federal regulations, would there be NC regulations to replace them?
• Would consumers exercise their “freedom” to avoid NC all farm produce should there be an outbreak of e. coli or other food-borne disease related to one “Made in NC” product?
• While small farmers might be able to confine the sale of their produce to NC consumers, could large farmers separate their in-state produce from that which would be sold out of state?

H 100, Nonprofits/Criteria to Receive State Funds
Introducers: Reps. L. Brown and Cleveland
Status: House Appropriations Comm.
H 100 would set two new requirements for a nonprofit receiving state funds: 1) It must receive at least 35% of its funding from private sources. 2) It must have administrative costs of no more than 15% of its budget or receipts. Funding would be suspended for a nonprofit that was not in compliance, and the nonprofit could have to return funds already received.

H 2, Protect Health Care Freedom, has been passed by the Senate and will be returned to the House for concurrence in amendments (none of which change the bill’s basic message of opposing the health insurance mandate of federal health care reform). Published reports say that the Governor has decided that this bill is not worth a veto fight and that she will let it become law without her signature.

S 8, No Cap on Number of Charter Schools, has been greatly expanded. It now contains the following significant provisions:
• Charter schools would be authorized and regulated under a new NC Public Charter School Commission. It would be made up of the Superintendent of Public Instruction, two appointees from the Governor, and eight appointees from the General Assembly, two of whom would be teachers, administrators, board members, parents, or students of charter schools. The State Board of Education could veto any decision of the Commission, but only with a three-fourths vote.
• Current law requires local school boards wanting to convert a traditional public school into a charter school to show that a majority of the school’s educational staff support the conversion and to give evidence that parents support it. S 8 would eliminate this requirement.
• Local school boards could serve as the board of directors for a public school converted to a charter school, rather than creating a separate non-profit corporation.
• Requirements that a charter school have a minimum number of teachers and a minimum number of students are removed.
• A charter school which is unable to enroll enough students who live in NC can enroll up to 10% of their students from out of state. Those students would have to pay tuition equal to what that county and the state were paying per pupil.
• A public school converting to a charter school would have to give enrollment preference to students living in that school’s former attendance area for at least two years.
• State funds could be used for equipment, land and buildings. Counties could appropriate money to charter schools for similar uses. Counties would be authorized to levy property taxes for capital funding for charter schools. Counties could also allocate to charter schools a portion of lottery funds designated for school construction.
• The Department of Justice would be authorized to conduct criminal background checks on employees and applicants, but only if the employee or applicant consented.

S 13, Balanced Budget Act of 2011, has been ratified and sent to the Governor. Published reports indicate that she is considering vetoing it, primarily because it takes funds which were being used to recruit new businesses to NC. It would also take funds which have benefited local sustainable agriculture and which have promoted better health, including efforts to quit smoking.

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