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Tuesday, July 17, 2007

Ind. Law - Another case of intent of legislator foiled by the law itself

This July 10th ILB entry noted how, to quote the Evansville Courier & Press: "Two state lawmakers who helped pass Indiana's new truck seat belt law were surprised to learn a loophole they tried to close still may be open." The entry ends with this quote from an editorial in the Fort Wayne Journal Gazette:

The disagreement is the latest that shows how important it is for legislators and their legal advisers to scrutinize the precise language of the bills they author and shepherd through the legislative process.
The entry concluded with this observation from the ILB:
This brings to mind a recent Supreme Court ruling (see ILB entry here from June 23rd), Utility Center, Inc., d/b/a Aquasource v. City of Fort Wayne, where the Court wrote, re the wording of the law as passed and the intent of a legislator, that the court must look to the language of the statute itself, not the intent of the bill's author.
Today's story, reported in the Indianapolis Star by Daniel Lee, appears to deal with language inserted into a bill at the last minute, without adequote vetting. The headline: "New health insurance law won't help all: Many Hoosiers, including lawmakers, surprised by loophole for some employers." Some quotes:
[A] new state law that, starting July 1, requires health insurers to provide coverage to a policyholder's children up to age 24, even if those children are not full-time students. * * *

[However, it turns out that] thousands of Hoosiers with young adult children aren't eligible for the coverage.

As many as half of all employer health plans in Indiana are governed by federal rules, not state law. That means those employers are under no obligation to abide by Indiana's measure. * * *

The loophole also surprised Indiana lawmakers.

"We were unaware of that at the time," said state Rep. Charlie Brown, a Gary Democrat and one of the bill's sponsors. "The intent was that we would get as many 24-year-olds and younger on some kind of health plan."

The measure was part of legislation that raised the state's cigarette tax in order to fund health initiatives. Brown said the provision came down to the wire of this year's session of the General Assembly, giving legislative services scant time for research.

It turns out health-care plans that are "self-funded" -- that is, the employer pays its own medical expenses and pays an insurer as a benefits administrator -- are exempt from the new state law because they are overseen by a federal regulation known as ERISA, or the Employee Retirement Income Security Act. Most labor unions' health benefit plans are regulated through ERISA.

Employers that are "fully insured" -- meaning employers pay premiums to a health insurer -- are regulated by state law, according to Carol Cutter, chief deputy of health and legislative affairs for the Indiana Department of Insurance.

Churches and state and local government have to abide by the new state law even if they are self-funded.

Many large employers using PPOs have self-funded plans. HMOs typically are fully insured.

Posted by Marcia Oddi on July 17, 2007 08:10 AM
Posted to Indiana Law