Insurance News Roundup

Drones
Liberty Mutual will begin using drones to document fire and natural disaster damage claims, according to the Boston Business Journal. The company had to get permission from the Federal Aviation Administration, which set certain height, weight, and speed limits on the drones.  “The drones will keep Liberty Mutual claims adjusters and contractors safer, the insurer stated, since they won’t have to take the risks of piloting a plane or falling off a ladder during a roof inspection,” the article stated. Using drones to document property damage is another example of how the insurance industry is using emerging technologies.  In May, this blog discussed the use of fitness trackers (e.g., Fitbit) with life insurance policies.

Cigna Deal
According to the New York Times, Anthem has agreed to buy Cigna in a deal worth $54 billion, which includes debt assumption. The deal must still receive shareholder and regulatory approval. According to the Hartford Courant, Cigna has 4,200 employees in Connecticut, while Anthem employs hundreds in Wallingford. The combined company would insure about 53 million people with medical coverage. Earlier this month, Aetna also agreed to purchase Humana. If both deals are completed, there will be three major health insurers in the United States, down from five. “Health insurers are seeking to consolidate to gain greater scale to reduce costs and capitalize on growing opportunities in the government and individual markets,” the article stated.

Prescription Drug Prices
Several states have introduced cost transparency bills to better understand the rising price of prescription drugs, “which are often attributed to high research and development costs,” the New York Times reported. Some bills limit disclosure to drugs costing over $10,000 per year while others require disclosure of development, manufacturing, marketing, and advertising costs, the article stated. Some bills also allow states to act on the disclosed information.  Under the Pennsylvania bill, for example, insurers could refuse to pay for a drug if the manufacturer failed to file the required report. “Most of the bills have not been acted upon, though hearings were held in California and Oregon,” the article stated.

Proposed Federal Rule Aims to Make SNAP Benefits More Accessible for Seniors, Individuals With Disabilities

The federal agriculture (USDA) secretary recently announced a proposed rule to allow seniors and individuals with disabilities to use their SNAP (formerly known as food stamps) benefits to pay for governmental and nonprofit grocery delivery services. The proposed rule is intended to help serve those individuals who are eligible for SNAP but, due to limited mobility, have difficulty using the benefits to purchase groceries.

As described in the proposal, the grocery delivery services purchase food for, and deliver it to, a head of household who is unable to shop for food and is (1) age 60 or older, or (2) has mental or physical disability. According to the USDA press release, “nationally, only 42% of eligible elderly individuals participate in SNAP, compared to 83% for all people who are eligible.”

The USDA intends to initially test out the program as a one year pilot program. According to the release, “lessons learned during the pilot will [be] used to help shape the final rule.”

Click here to read the press release and here to read the proposed rule.

Lower Wholesale Electricity Prices in New England

ISO-New England reports the average real-time electric energy price for June 2015 was $19.61 per megawatt-hour, a decline from nearly twice that much for the same period last year and an almost 85% drop from February 2015 when the price was $126.70 per megawatt hour. ISO-New England notes that this price is the lowest average wholesale electric energy price since March, 2003. Factors that affect this price include power plant fuel prices, electricity demand, and the fuel mix (i.e., the mix of resources used for power generation in any given time period).

Some of the region’s energy companies may cause the price to drop even further, according to an article posted by Utility Dive. The article notes that Emera Energy will upgrade its Rhode Island plant to increase the facility’s efficiency. The president of the New England Power Generators Association notes that companies in New England may prefer to add generating capacity through such efficiency upgrades rather than building new plants. He argues that upgrades could also decrease the wholesale price of electricity. Emera Energy also owns a plant in Connecticut.

Extended Hours for Alcohol Sales

PA 15-244, § 82, beginning July 1, 2015, allows package stores and grocery stores, among others, to sell alcohol for off-premises consumption for an additional hour each day (until 10 p.m. Monday through Saturday and until 6 p.m. on Sunday).

Additionally in the same act, package store owners will be able to own four stores on July 1, 2015 and then five on July 1, 2016, rather than three as under prior law.

Read the full CT Post article here.

Two Tales of One City

http://bit.ly/1JBh0jS

It’s the best of times and the worst of times for Detroit.  The city “has emerged from the largest municipal bankruptcy in U.S. history with new leadership, a downtown restocked with young professionals, and a public-relations slogan, ‘America’s great comeback city,” reports Bloomberg Businessweek. But the landscape radically changes when one looks beyond the city center to the neighborhoods where 95% of Detroit residents live. The Center for Community Progress told Bloomberg Businessweek that “Detroit is at risk of becoming two different cities: one thriving and one continuing to decline.”

http://bit.ly/1KmYxKJ

The outward signs of that decline are boarded-up homes that sell for incredibly low prices, a good thing for would-be homebuyers like Cindy Gresham, who, according to Bloomberg Businessweek, paid $6,000 in 2010 for her home. Not bad, except for the $8,589 unpaid property tax bill which tripled to about $25,000 today.

But that’s not all for Gresham and many other Detroit homeowners. Detroit’s property taxes, like those of most jurisdictions, are based on a property’s fair market value. Consequently, the tax assessments should fluctuate with market values. In Detroit’s case, though, assessments often don’t reflect “the 48 percent plunge in home values over the past decade.”  The city has been lowering tax assessments while trying to boost property values, partly by suing the owners of blighted property, seeking that they improve the properties or turn them over to the city.

Detroit’s strategy illustrates the fiscal policy paradox facing many cities. Lowering assessments makes homes more affordable to low- and moderate-income people, but not if they have to pay back taxes. Making homes more affordable by bringing assessments into line with depressed home sale values also works if cities don’t increase tax rates to maintain municipal services. Cities could reduce tax rates by cutting services, but that could backfire if the level and quality of those services falls, thus depressing property values and causing people and businesses to move.

Ironically, Michigan law waives property taxes for homeowners like Gresham whose household income put them below the poverty line. But the rule isn’t well known, and filing the documents can be complicated, University of Michigan (Ann Arbor) urban and regional planning professor Margaret Dewar told Bloomberg Businessweek.  If the rule were widely known and applied, the tax load borne by other taxpayers might increase, thus creating another policy paradox.

CDC Reports Increase in Heroin Use

The Centers for Disease Control and Prevention (CDC) recently reported sharp increases in heroin usage across most demographic groups over the last decade. Among the more startling findings:

• between 2002 and 2013, the rate of overdose deaths related to heroin nearly quadrupled, with nearly 8,200 people in 2013 dying of overdose;
• during that same time frame, there is a 50% increase in the percentage of men using the drug (2.4% to 3.6%) and a 100% increase in the percentage of women using it (0.8% to 1.6%); and
• there is more than a 100% increase in the heroin usage rate among people ages 18 to 25 (3.5% to 7.3%).

The CDC’s research also shows that heroin users typically use at least one other drug, and most used at least three other drugs.

As noted in an NPR article discussing the report, Dr. Tom Frieden, head of the CDC, says that the heroin epidemic is linked to opioid painkiller use. According to the CDC study, people who abuse painkillers are 40 times more likely to be addicted to heroin.

School Districts Begin to Charge for Busing as State Aid Declines

According to Stateline, school districts in at least five states are charging parents school transportation fees in order to preserve other programming when faced with budget cuts.

Citing an October 2014 report by the Center on Budget and Policy Priorities, a Washington, D.C. research group, Stateline reports that states have cut back on their education funding over the past seven years.  At least 30 were providing less funding per student last year than they did before the 2008 recession, and 14 cut funding by 10% or more. 

Examples of school districts that have begun charging for bus service to offset these funding cuts include:

• Jeffco Public Schools in Golden, Colorado, which charges $150 per child, per year;
• Franklin Public Schools in Franklin, Massachusetts, which charges for students in grades seven to 12 at the rate of $325 per child per year, capped at $975 per family; and
• Poway Unified School District in San Diego County, California, which charges $575 a year per child, capped at $1,437 for three or more children.

Hawaii also charges for busing.  The entire state consists of one school district run by the state’s education department.

Some parents are upset at the charges while others are supportive of the charges’ purpose.  For families with a lower income, the fees may create attendance barriers.  The fees have also upset parents who already are required to pay athletic fees, book fees, and technology fees to their child’s school. 

In a district such as the Douglas County School District in Colorado, however, parents were supportive of fees that provided an upgraded safety and security system for public school buses.  The fee revenue paid for a real-time GPS tracking system to monitor students who ride the bus.  The district charges $150 per year, per student.

 

Controlling Surprise Health Care Bills

Kaiser Health News recently reported on New York’s efforts to help consumers minimize the financial impact of “surprise” health care bills. Under a law that took effect April 1, 2015, patients are prevented from owing more than their in-network copayment, coinsurance, or deductible on surprise bills for out-of-network emergency services. A bill is generally considered a surprise if consumers receive services without their knowledge from an out-of-network doctor at an in-network hospital, among other things. A surprise bill also results when a patient is referred to an out-of-network provider but has not signed a written consent form agreeing that the services will be out of network and may result in higher out-of-pocket costs.

Connecticut legislators recently enacted surprise billing legislation, which takes effect July 1, 2016. Under PA 15-146 (§§ 9 & 10), if an insured patient receives a surprise bill, he or she will only be required to pay the coinsurance, copayment, deductible, or other out-of-pocket expense that would apply if the services had been rendered by an in-network provider. Under the act, a surprise bill is a bill for non-emergency health care services received by an insured for services rendered by an out-of-network provider at an in-network facility during a service that was performed by an in-network provider or previously approved by the health carrier, and the insured did not knowingly elect to receive the services from the out-of-network provider. The act also prohibits health insurers from charging an amount for emergency services performed by an out-of-network provider that is greater than that charged when performed by an in-network provider.

Shaming Tax Delinquents: Does it Work?

It just might, particularly for tax delinquents with relatively small debts, according to a recent study, as reported by NPR’s Shankar Vedantam. 

As Vedantam explains, the researchers conducted a field experiment to test whether shaming penalties work in reducing tax delinquencies.  They mailed letters to tax delinquents in Kentucky, Kansas, and Wisconsin. Some of the letters warned recipients about the interest and penalties they were incurring from not paying, while others listed their name and the names of other tax delinquents in the area and the amount each of them owed.  The letters to the second group implied that this information was being shared with their neighbors.

The study found that the shaming letters increased the likelihood of a taxpayer paying his or her debt by almost 21%. The letters also appeared to be more effective for smaller debts.  As Vedantam notes, “presumably, people care what their neighbors think when they owe $200 or maybe $2,000. But when they owe $20,000 . . . [t]he money's worth more than their reputation.”

States’ LEED Certification Programs Provide Incentives to Building Owners and Developers

OLR Report 2015-R-0061 provides a brief summary of Leadership in Energy and Environmental Design (LEED) incentive programs in other states.  The LEED program is a building certification process developed and administered by the U.S. Green Building Council (USGBC) that aims to improve a building’s performance across a variety of “green” areas.  Additional information on obtaining LEED certification is provided in OLR Report 2014-R-0200. 


Several states have implemented incentive programs to encourage private sector building owners and developers to pursue LEED certification for their buildings. These incentives include financial incentives such as grants, tax credits, rebates, and priority permit processing.


In Connecticut, the Department of Energy and Environmental Protection and the Office of Policy and Management administer the Green Buildings Tax Credit Program which provides a tax incentive for building owners and developers of certain commercial properties that meet or exceed the LEED gold certification standard.


Many states and local governments also offer incentives that could be used to achieve LEED certification, but do not specifically require certification in order to qualify for the incentive.


For more information, read the full report.

Updated Analysis of National and State Elderly Poverty Rates

A new Kaiser Family Foundation (KFF) issue brief presents national and state poverty rates for Americans ages 65 and older, based on the U.S. Census Bureau’s official and supplemental poverty measures. The supplemental poverty measure (SPM) is generally considered to be more accurate than the official poverty measure because it considers factors such as seniors’ (1) available financial resources, (2) in-kind benefits (e.g., food stamps), (3) out-of-pocket medical spending, and (4) geographic variations in housing expenses, among others.

KFF’s key findings include, among other things:

• Approximately 45% of seniors had incomes below twice the SPM’s poverty thresholds in 2013, compared to 33% under the official poverty measure.

• The percentage of seniors living in poverty is larger in every state under the SPM than under the official poverty measure, and at least twice as large in nine states, including Connecticut (as well as California, Hawaii, Indiana, Massachusetts, Maryland, Nevada, New Hampshire, and New Jersey).

• In 2013, elderly women experienced a higher poverty rate than elderly men under both the official and supplemental poverty measures.

Missing Children, State Care, and Child Sex Trafficking

A June 2015 publication developed by the National Council of Juvenile and Family Court Judges and the National Center for Missing and Exploited Children (NCMEC) provides information about resources that can help juvenile justice and child welfare agencies, law enforcement, legal guardians, and others involved in efforts to locate and recover children missing from care.

In this publication, NCMEC and the National Council of Juvenile and Family Court Judges put forth recommendations for the development of model policies and procedures for judges to follow when a child runs away or goes missing from care.  The publication suggests that judges could:

• require each agency to take a current photograph of the child, and an updated photograph of a child who returns to care from a runaway episode, and maintain an easily accessible electronic copy in agency records;
• issue an order requiring each agency to take certain steps, such as ensuring that law enforcement authorities immediately enter the child’s name and identifying information into the FBI’s NCIC Missing Person File and provide documentation of such to the court;
• issue individual orders to social workers or juvenile justice workers or a standing order in their jurisdiction to report children missing from care to NCMEC; and
• continue the child welfare or juvenile justice placement even for children who reach the age of majority and are still missing or are missing for long periods of time, so those children can easily access services if and when they are located.

The recommendations suggest a collaborative approach that engages the judiciary; child welfare, juvenile justice, and law enforcement agencies; NCMEC; and other national organizations.

The full publication is available below:
http://www.ncjfcj.org/sites/default/files/NCJFCJ_NCMEC_DCST_TAB_Final_6.10.15.pdf

Supreme Court to Reexamine Affirmative Action in Higher Education

Two years after examining the use of race in the University of Texas-Austin’s (UT) admissions process, the New York Times reports that the Supreme Court recently agreed to take another look at the practice when it granted certiorari to the same challenge on which it first ruled in 2013.


The university uses race as one factor among several in evaluating applicants, an approach it argues is consistent with past Supreme Court precedent. The plaintiff, however, argues that UT could achieve (and, in fact, did achieve) a diverse student body through race-neutral means, meaning that it’s unconstitutional for the university to consider race.


In 2013, the Court didn’t rule on the merits of the challenge, which had been rejected by lower courts. Rather, it remanded the case to the lower court (the Fifth Circuit Court of Appeals) after finding that it did not properly apply the strict scrutiny standard of review to UT’s practice. (Courts use strict scrutiny when reviewing government programs that make racially-based distinctions. Under the standard, the government must identify a compelling goal for the program and, according to the article, “a close fit between means and ends.”) After the remand, the court of appeals upheld the admissions process for a second time.


Arguments before the Supreme Court are expected next fall.


http://www.nytimes.com/2015/06/30/us/supreme-court-will-reconsider-affirmative-action-case.html?_r=0

Connecticut Designated a Manufacturing Community Under Federal “Investing in Manufacturing Communities Partnership”

This week, the federal commerce secretary announced that a portion of Connecticut was designated as a “manufacturing community” under the Investing in Manufacturing Communities Partnership (IMCP) program. The portion designated encompasses Hartford, Middlesex, New London, and Tolland counties.

Connecticut’s Department of Economic and Community Development applied for designation by submitting a plan for developing the manufacturing community, and its plan was one of 12 selected by the interagency designation panel. See a summary of Connecticut’s plan here.

The IMCP program is designed to accelerate the resurgence of manufacturing in communities nationwide by supporting the development of long-term economic development strategies. Because of its designation as a manufacturing community, Connecticut has access to nearly $1 billion in available funding from various federal agencies and will receive a dedicated federal liaison to assist with accessing available federal resources.

Hot Report: Acts Affecting Veterans

OLR Report 2015-R-0158 provides highlights of new state laws affecting veterans and the military enacted during the 2015 regular legislative session.

Some of the policy areas covered in the report include:

• Certified Junior Reserve Officer Training Corps (JROTC) shortage hiring
• Connecticut Women Veterans’ Program
• Continuing education on veterans’ mental health conditions
• Judicial Branch data collection and reporting for diversionary programs
• Life insurance war-risk exclusion clause prohibition
• Military retirement income exemption
• Qualifications and duties of the Office of Military Affairs Executive Director
• Subsidized Training and Employment Program (STEP) For unemployed armed forces members

Read the full report for information about the laws passed in each of those areas and several others.

Report on Injuries and Deaths Related to Inflatable Amusements

This past May, a Florida waterspout-turned-tornado made national news carrying an inflatable bounce house into the air with children inside. Three children were injured.


The federal Consumer Product Safety Commission (CPSC) collects data on injuries and fatalities from inflatable amusements and its most recent report, dated February 2015, summarizes this data from 2003-2013.


According to the report, during the 10-year period, there were an estimated 113,272 emergency department-treated injuries with over 90% associated with bounce houses. Most of the injuries were to limbs, such as fractures, strains, sprains, or dislocations. There were also 12 fatalities related to inflatable amusements in this timeframe. The report states that there was a “statistically significant increasing linear trend of yearly estimates for emergency department-treated injuries.”

Staggered Fiscal Years Between State and Local Governments

OLR Report 2015-R-0103 identifies three states that stagger state and local fiscal years by law. Specifically, Florida’s and Mississippi’s fiscal years run from July 1 to June 30, while their municipal fiscal years lag behind, running from October 1 to September 30. New York law sets different fiscal years for villages, towns, and counties, but each ends after the state’s fiscal year.  In Texas, municipalities may set their own fiscal years by ordinance, while county fiscal years either follow the calendar year or run from October 1 to September 31.


The opinions of municipal representatives differ as to the value of the staggered years. One indicated that the practice allows the city to account for state funding when preparing the city’s budget.  But some reported that the staggered fiscal year complicates their counties’ budgets. Some officials did not identify any specific advantages or disadvantages.

Everything You Always Wanted to Know About Home Cooling

With the summer heat finally here, the U.S. Department of Energy recently posted an “Energy Saver 101: Everything you Need to Know about Home Cooling” infographic on its website.  According to the infographic, 6% of an average household’s energy use is for space cooling, two-thirds of all U.S. homes have air conditioners, and homeowners spend $11 billion a year to run their air conditioners.  The site also has information on how different types of air conditioners work, tips on AC maintenance and common problems, and tips for saving energy and lowering your cooling costs.

Service Plaza Info Available Online

A new website helps Connecticut summer travelers find rest areas and view traffic cameras along I-95, I-395, and Route 15.


The website, www.ctserviceplazas.com, is operated by the company that operates 20 service plazas on the state’s highways.

States with Electronic Benefit Transfer (EBT) Card Restrictions

The National Conference of State Legislatures (NCSL) has compiled a table showing how states are imposing a federal restriction on where certain EBT transactions can take place. The restriction is part of a 2012 federal law that requires states to maintain policies or practices that prevent EBT transactions funded through Temporary Assistance for Needy Families (TANF) block grants from taking place at (1) liquor stores, (2) casinos or gambling establishments, and (3) any retail establishments that provide adult-oriented entertainment (PL 112-96). The NCSL table only includes those states that have addressed the issue in statute.


Last year, Connecticut’s Department of Social Services adopted regulations to implement the restriction. The regulations prohibit recipients of cash assistance under the Connecticut’s TANF-funded cash assistance program (i.e., Temporary Family Assistance) from conducting EBT transactions in prohibited locations and impose penalties for violations. The penalties are as follows:

• first violation: a warning
• second violation: a penalty in the amount of the EBT transaction
• third violation: a one-month suspension and a penalty in the amount of the EBT transaction
• fourth violation: at DSS’s discretion, benefit suspension for any length of time or termination.

A Review of the Federally Mandated Congestion Charge (FMCC) Component of Electricity Bills

OLR Report 2015-R-0105 describes the federally mandated congestion charge (FMCC) component of electricity bills. It also explains how funds collected through this charge are spent.


Residential electricity customers pay FMCCs in both the distribution and generation portions of their bills. For the average residential Eversource customer using 700 kwh per month, the FMCC is approximately 2% of the bill.


By law, FMCCs are collected on electricity bills to cover certain costs the Federal Regulatory Authority (FERC) approves and various costs the Public Utility Regulatory Authority (PURA) approves (CGS § 16-1(35)).


The report describes many of the components of FMCCs and the proportion of funds allocated to each component based on the publicly available information in the electric companies’ filings in the most recent PURA docket currently under review. FMCCs include (1) nonbypassable charges – charges that customers must pay regardless of retail energy supplier and (2) bypassable charges – charges that customers may avoid by selecting a retail energy supplier rather than receiving service through the electric companies’ standard service rates.


For more information, click here to read the full report.

"Significant Increase" In Adolescent ED Visits for Self-Inflicted Injuries

According to a recent article in Pediatrics, from 2009 to 2013, research found a “significant increase” in the number of self-inflicted injuries (SII) by adolescents that resulted in trips to the emergency department (ED). Researchers reviewed 286,678 adolescent trauma victims during that time, and found that the number who visited the ED for SII increased from 1.1% in 2009 to 1.6% in 2012. Of that population, they found that SII due to firearms decreased (from 27.3% to 21.9%), though it was still the most common method of SII among males (34.4%). Among females, the most common methods of SII were cutting or piercing (48.0%).


Researchers also found that the chances of SII were higher among (1) females, (2) older adolescents (i.e., age 15 or older), (3) adolescents with comorbid conditions (e.g., substance abuse or mental health disorder), and (4) Asian American adolescents and lower among African American adolescents. The chances of adolescents admitted to the ED dying were higher for those with SII than for those with other injuries.


Click here to read the full article and here for additional information and resources on SII from the federal Centers for Disease Control and Prevention.

Homelessness Has Significant Impact on Young Children’s Health

The Center for Housing Policy, the research division of the nonprofit advocacy organization National Housing Conference, recently released a brief describing research on the health impacts of homelessness on children.  The research shows that pre- or post-natal homelessness can have lifelong health effects, and the younger and longer a child is homeless, the poorer the child’s health outcome. 


The brief notes that the timing of homelessness is important, and being homeless both before and after birth is associated with significantly worse health outcomes than being homeless before or after birth alone, as shown in the chart below.

Image Source:  Children’s Health Watch Data via Center for Housing Policy brief

Additionally, the brief notes that the duration of homelessness affects health outcomes: young children who are homeless for more than six months fair more poorly than children who were never homeless or homeless for fewer than six months.  Further, being homeless for at least six months is especially harmful to infants as compared with toddlers, as shown in the below chart.

Image Source:  Children’s Health Watch Data via Center for Housing Policy brief