Tax-writing House Committee Proposes $48 Million Hike

The House Ways and Means Committee has approved a package of revenue measures totaling more than $48 million. The package includes a transportation funding bill valued at $11.4 million, a miscellaneous tax bill totaling $13.3 million, and an executive branch fee bill that would raise $23.6 million.

The transportation funding bill would increase consumer costs by $11.4 million, but revenues would be offset by an estimated $1 million due to another House-passed bill. That bill, H.571, will allow some violators of motor vehicle laws to pay a reduced fine in exchange for reinstatement of their licenses. The fees raised include registration and license fees, but the biggest single source would come from eliminating a collection allowance for motor fuel distributors collecting the motor fuel tax.

The fee bill includes an increase in a registration fee paid by mutual funds from $600 to $1,500 per year and adjustments to fees paid to the Department of Agriculture for various things, including the registration of scanners, pump meters and other measuring devices. The mutual fund piece is worth $21 million.

The miscellaneous tax bill would increase the assessment on employers who do not provide health insurance to their employees by $6 million. It also would create a tiered system based on size of the employer. The bill raises the existing gross receipts tax on heating fuels from 0.5 to 0.75 percent, raising about $1.5 million.

Some members of the committee planned to be away at the end of the week, so Committee Chair Rep. Janet Ancel, D-Calais, took the unusual step of voting the bill out on Wednesday, two days ahead of the expected General Fund budget. The move drew criticism from Republicans, who complained that the Appropriations Committee would have little incentive to hold the line on spending if extra revenue was already in the tax bill.

Telecom Bill Approved by Committee

he House Commerce and Economic Development Committee continues to make expanded broadband coverage in Vermont a priority, and it passed another in a series of bills this week to advance that cause.

The bill, H.870, would increase the Universal Service Fund from 2.0 to 2.5 percent, with the additional revenue used for grants to expand broadband coverage. The bill requires the Department of Public Service to give priority to grant applications that provide Internet service at public schools. The bill also provides funding from the USF for a telecommunications news service for the blind and visually impaired.

Despite increasing complaints from municipalities about state preemption of local tower siting decisions, the committee opted to make only minor changes to the existing statutory preemption. The bill includes new requirements governing the colocation of facilities on existing towers.

The bill passed the committee unanimously, although three members opposed the increase in the USF. The bill is now pending in the House Institutions and Corrections Committee, which has jurisdiction over a proposed $1 million in new capital bonding for broadband grants that is included in the bill.

Commerce Takes Up Workers’ Compensation Measure

The House Commerce and Economic Development Committee began taking testimony this week on a draft miscellaneous workers’ compensation bill. The bill does not propose major changes in the system, but it does include some provisions that raise concerns about higher costs. The bill proposes to:

• Require insurers to pay compensation to employees for time missed from work to attend medical appointments. Currently, such costs are required to be borne by employers;
• Shorten the period in which injured workers are eligible for vocational rehabilitation benefits from 90 to 60 days;
• Require insurers to submit all evidence to the Department of Labor in electronic form;
• Create a vocational rehabilitation working group; and
• Require a study by the Department of Labor on workers’ compensation and opiates.

The bill also proposes other employment-related changes, including:

• Expanded penalties for employers who fail to pay wages;
• New regulations for temporary employment companies;
• A study of contingent work in Vermont; and
• A study of portable employee benefits..

Treasurer Convenes Advisory Group Over Divestment

Democratic State Treasurer Beth Pearce on Friday convened a meeting of nearly 40 state employees, union leaders, advocacy groups and others to map out a strategy to study divestment of state employee pension funds from coal and oil stocks. The meeting was chaired by Vermont Pension Investment Committee Chairman Tom Golonka of Silverlake Wealth Management, who promised to assemble a subcommittee of VPIC to study the issue at its next meeting.

The group met for about an hour and a half in a large conference room outside the Treasurer’s Office. Environmental advocacy groups and a Shumlin Administration staffer tried to steer the discussion toward developing a plan for divestment by May 2, a deadline set out in a letter from a Senate committee, but Pearce insisted she would simply provide an update on the process by then. Gov. Peter Shumlin held yet another press conference on the issue on Thursday.

State employees were wary of outsiders looking at their investments. “This is my money that I have been depositing for, like, 40 years“ said corrections officer Dave Bellini, president of the Vermont State Employees Association. “I think I heard that coal stocks are going to tank and I’m all over that. But if you just don’t like the company and don’t have any skin in the game, I’m not listening.”

House Panel Reconsiders Prescription Drug Disclosure Bill

After passing H.866 out of committee last week with little testimony, House Health Care Committee Chair Rep. Bill Lippert, D-Hinesburg, took to the House floor on Thursday and requested that the bill be sent back to committee for further consideration. Lippert’s request came after Rep. Bob Bancroft, R-Westford, expressed anger to Speaker Shap Smith at the lack of committee process with the bill.

The bill would require manufacturers of certain prescription drugs to report information to the Green Mountain Care Board on research, development, acquisition and other costs associated with the manufacture of the drugs and the prices charged to purchasers. The proposal also requires the GMCB to determine what drugs necessitate reporting, but it does not provide any funding to the board for the assigned tasks.

Lippert told House members that the committee will take testimony on the bill next week.

Gobeille Reviews U.S. Supreme Court Loss on Medical Claims

Green Mountain Care Board Chair Al Gobeille appeared before the House Health Care Committee on Wednesday to review the state’s recent loss in the U.S. Supreme Court’s 6-2 decision in Gobeille v. Liberty Mutual. The Court ruled that Vermont cannot compel benefit plans protected by the Employee Retirement Income Security Act to provide data on paid medical claims, backing Liberty Mutual Insurance Company’s contention that federal law prohibits such requirements.

Gobeille said the high court found that a 2005 Vermont data collection law cannot apply to self-funded insurance plans, which are most commonly used by large companies, and the state’s attempt to regulate these plans ran afoul of ERISA. The case is expected to have major implications for health information exchanges, as well as for other states that have started all-payer claims databases. Gobeille said the data is vital to detecting price discrepancies among doctors and hospitals.

“The lack of data for Liberty Mutual represents only 137 patients in all of Vermont. But the issue is one of precedent and integrity of the data. The exclusion of ERISA plans from the database undermines the quality of the data,” said Gobeille. Self-funded plans represent the largest portion of the private insurance market.

Senate Advances Legislation on Regulation of Hospitals, Health Insurers, and MCOs

The Senate has passed S.255, a bill that further regulates hospitals, health insurers and managed care organizations. The bill calls for a statewide comparative hospital quality report and would expand the information health insurers must report annually to the Department of Financial Regulation to include data on claims processing, denials and grievances. DFR would post this information on its website.

The Senate approved a floor amendment offered by Sen. Ginny Lyons, D-Chittenden, which requires the director of health care reform to look for opportunities to align accountable care organizations, managed care organizations and the Medicaid program and to report back to the legislature by Dec. 15, 2017.

Repeal of Large Groups from the Exchange Moves to the House

The Senate this week approved S.214, a bill that would repeal the authority for employers with over 100 employees to purchase qualified health plans on Vermont Health Connect. The legislature approved a one-year delay last year in order to allow the Green Mountain Care Board to study the potential impact on the market. The Senate approved the bill because of the expectation that only those large groups with poor claims experience will remain insured while large groups with less risk will choose to self-insure, creating more premium pressure on the large group insured market.

The bill will now moves to the House.

Bill-Back Increases to Fund Office of the Health Care Advocate

The Miscellaneous Tax Bill includes an increase to the Office of the Health Care Advocate to fill the loss of federal grant funding. The House Ways and Means Committee agreed to use the Green Mountain Care Board’s bill-back authority to the entities it regulates to fund the Office. The new allocation can be found here.

Second Senate Committee Passes Opioid Bill


On a vote of 7-0, the Senate Finance Committee passed S.243, a bill that attempts to combat opioid abuse, on Thursday The committee focused its review on a pharmaceutical manufacturer fee which is intended to fund the bill. A section-by-section summary of the bill can be found here. Vermont Department of Health Senior Policy Advisory and General Counsel David Englander provided the committee with a breakdown of the budget. His presentation can be found here. The bill increases the Evidence-Based Education and Advertising Fund by approximately $1.51 million for a total assessment to manufacturers of approximately $2.5 million.

The committee amended the bill to impose penalties and interest on manufacturers that fail to pay the manufacturer fee and to require the department to publish the list on its web site. Englander told the committee that 88 percent of manufacturers are complying with the law that created the Evidence-Based Education and Advertising Fund to collect and analyze information on pharmaceutical marketing activities.

The bill is now in the Senate Appropriations Committee for its review.

Senate Approves Prescription Drug Transparency Bill

The Senate this week passed S.216, a bill related to prescription drugs. The bill:

• Requires the Department of Financial Regulation to adopt rules for Vermont Health Connect plans requiring health insurers to provide enrollees, potential enrollees and health care providers with the names of prescription drugs covered and the applicable cost-sharing amounts. The rules will also address drug tiers, prior authorization, step therapy, and utilization management requirements;
• Requires the Medicaid office to use the same reimbursement formula for all eligible health care organizations under the 340B program. The 340B Drug Discount Program was created in 1992 and requires drug manufacturers to provide outpatient drugs to eligible health care organizations at significantly reduced prices;
• Requires the Department of Vermont Health Access to study modifications to the 340B reimbursement formula to determine financial implications on any recommended modification; and
• Revises current law to allow a health care provider or member of the Green Mountain Care Board to have refreshments or snacks at a conference or seminar.

The bill now moves to the House.

House Passes Bill Requiring Consumer Protections For ACO’s

On Thursday, the House passed H.812, a bill that requires the inclusion of consumer protections in the Green Mountain Care Board’s waiver agreement with the Centers for Medicare and Medicaid Services. The bill also requires the GMCB to incorporate a detailed list of consumer protections into the All Payer Model, develop certification standards and processes for accountable care organizations that participate in any program reform or initiative, and review ACO budgets.

Bill Requires Workplace Violence and Crisis Response Policy for AHS Employees

The House voted nearly unanimously this week in support of legislation to require each department of the Agency of Human Services to establish and maintain written workplace violence prevention and crisis response policies for employees working directly with clients. The bill, H.74, also requires providers with AHS contracts to have a written policy in place for the protection of employees.

Although Vermont has adopted federally-approved Occupational Safety and Health Administration standards that provide workplace safety guidance, AHS testified that safety education is usually reactive to an incident. H.74 requires a prevention policy that could help prepare employees before an incident occurs.

Committee OK’s Shifting Cost of Positions from General Fund to Insurance Premiums

The House Ways and Means Committee gave its approval this week to an administration proposal that would shift the cost of three Fire Service Training Council positions from the general fund to insurers.

The legislature created an insurer assessment of $250,000 in 1993 to help fund fire service training. The assessment has grown dramatically since then, with the administration now proposing an annual charge of $1.25 million.

Insurance lobbyists argued that the assessment has grown by 500 percent, with the rapid growth resulting from the lack of oversight over spending requests from the council. The legislature has felt far less constrained in increasing assessments on insurers than they have in raising general fund revenues. If the assessment had grown at the rate of inflation it would only be about $414,000 today.

Committee members were clearly unhappy with the administration’s cost-shifting. But faced with the choice between eliminating three fire training positions or increasing insurance assessments, the committee quietly approved the proposal.

House Appropriations Committee Wades Through Final Decisions On Wish List Funding

The House Appropriations Committee spent all day Friday reviewing the items on its budget “wish list.” Among the items the committee agreed to fund are a two percent COLA increase for designated agencies, $75,000 for Governor Shumlin’s needle exchange program, $1.3 million for a Judicial Child Protection Package, $350,000 for one-time tax IT security funding, $1 million for Child Care Subsidies, and funding for several current bills, including H.868, the economic development bill. Items on the list that the committee declined to fund include Attorney General’s office salary increases and additional funding for H.859, the House Education Committee’s special education bill.