Commerce Committee Report – week 9, 2018

SF 2243 – Consumer fraud caller ID;
SF 2311 – Public utilities regulation;
SF 2316 – Domestic stock insurers;
SF 2329 – Health benefit plans;
SF 2330 – Sale, lease of water treatment systems;
SF 2349 – Multiple employer welfare arrangements;
HF 2237 – IID Code clean-up. 



SF 2243 prohibits a person from knowingly using or providing false or misleading caller ID information to telephone customers in Iowa. The bill is an effort to strengthen laws on “spoofing,” where an individual or company sets up a fake name, area code and telephone number, frequently with the same area code and prefix as the customer, to encourage the customer to answer what looks like a local call. The “spoofer” may try to sell products, services or get additional personal information from the customer. A violation is an unlawful practice under Iowa’s Consumer Fraud laws.
[3/6: 50-0]


SF 2311 significantly deregulates gas and electric public utilities in Iowa. It removes or restricts the Iowa Utilities Board’s oversight on a wide range of issues, including energy efficiency, rate increases, coal plant emissions controls and consumer protections. Iowa has some of the lowest energy rates in the Midwest and the country, while developing one of the strongest clean energy economies. Energy efficiency and rebate programs have saved Iowa consumers billions of dollars, avoided the need to build costly new power plants, attracted businesses looking for low electric rates and created thousands of Iowa jobs. This bill undermines many of the policies that have led to Iowa’s cost-effective clean energy leadership. For example, it separates energy efficiency and demand response programs and makes both optional for customers. The Iowa Consumer Advocate (Utilities) has expressed concerns about many facets of the proposal, and Iowa families and businesses will likely see substantial utility rate increases. The bill is now under consideration by the Iowa House.
[3/6: 27-23 (No: Democrats, Bertrand, D. Johnson, Schneider)]


SF 2316 allows Iowa domestic stock companies to divide into two or more insurers, and provides a process for regulatory approval for such actions. The insurer must file its plan with the Iowa Insurance Division and meet various requirements. The Insurance Division will determine whether to approve the plan. The proposal is modeled after Connecticut law, and does not apply to mutual insurance companies.
[3/1: 49-0 (Absent: Bertrand)]


SF 2329 relates to “health benefit plans” for members of certain agricultural organizations, and requires the plan be provided through a self-funded arrangement and administered by a domestic third-party administrator that holds a certificate of registration issued by the Iowa Insurance Commissioner. This allows individuals who do not qualify for a health insurance subsidy to join the Iowa Farm Bureau and, as a benefit of membership, have an opportunity to buy various health coverage plans that are not ACA-compliant. The third-party administrator must have “more than ten consecutive years” of previous health care administrative services for the agricultural organization, which limits this to health plans provided through Wellmark Blue Cross and Blue Shield. The bill states that the plans “shall be deemed to not be insurance” and so are not subject to state and federal insurance regulations.

One of the concerns is that Farm Bureau and Wellmark could cherry-pick younger, healthier customers, leaving less healthy and older individuals in the individual market where Medica is the only provider in Iowa. This would further increase Medica premiums, and destabilize the individual health insurance market in the state.
[3/7: 40-9 (No: Bisignano, Bolkcom, Boulton, Dvorsky, Hogg, Jochum, McCoy, Petersen, Quirmbach; Absent: Bertrand)]


SF 2330 updates current law regarding the unlawful practice of a person selling, leasing, renting or advertising a water treatment system for which claims or representations of removing health-related contaminants are made, unless the water treatment system is performance tested by an authorized third-party testing agency accredited by the American National Standards Institute or other certified organization specified in the bill. Any fraudulent practice can be enforced under Chapter 714. The Department of Public Health and the Iowa Attorney General’s Consumer Protection Division support the legislation.
[3/6: 48-2 (No: Hogg, D. Johnson)]


SF 2349 relates to association health plans, a type of multiple employer welfare arrangement (MEWA), established by bona fide associations of employers. The arrangement was established by a trade, industry or professional association of employers that has a constitution or by-laws, is organized and maintained in good faith with membership stability. An amendment recommended by the Iowa Insurance Division was approved. It allows the Commissioner to have rulemaking authority for creation of such association health plans consistent with U.S. Department of Labor regulations, rather than putting prospective language in Code based on proposed federal rules. S F 2349 loosens up Iowa’s current laws regulating MEWAs. In the 1980s, there were significant problems with MEWAs across the country. Many were not properly capitalized and failed, leaving people with millions of dollars in unpaid health care claims. Congress then gave states authority to regulate MEWAs. Under current Iowa law, no new MEWAs can be created. The only ones that currently exist are run by the Iowa Bankers Association and the Iowa Petroleum Marketers. The U.S. Department of Labor currently is in a lengthy rule-making and public-comment period. Concerns were expressed by some members that while the MEWA options are promising for Iowa, it would be prudent to wait until federal rules and guidelines are complete.
[3/5: 33-17 (Yes: Republicans, Bowman, Dotzler, Hart, Horn; No: Democrats, D. Johnson)]


HF 2237 (SF 2249) is  a recommendation by the Iowa Insurance Division that eliminates the words “or long-term care” from Iowa code section 507B.4 to be consistent with Iowa code section 514G.102, and repeals an outdated requirement in 505.32 to establish a clearinghouse. The website fulfills this function and is linked to as needed throughout the Insurance Division website. The bill passed the House 98-0.
[3/1: 49-0 (Absent: Bertrand)]