capital report: april 2, 2019

Healthcare Updates: DOJ Endorses ACA Repeal Ruling; Association Health Plans Struck Down

The U.S. Department of Justice (DOJ) announced last Monday, March 25 that it will be supporting the Texas District Court ruling from late last year that declared the Affordable Care Act (ACA) to be unconstitutional. The law still stands and the appeal to the judge’s decision will be heard in U.S. Court of Appeals for the Fifth Circuit.

The case was a result of a lawsuit filed by 20 Republican state attorneys general after the repeal of the Individual Mandate in the Tax Cut and Jobs Act of 2017. Healthcare policy insiders on both sides of the aisle are doubtful that the ACA will be tossed out as unconstitutional, but acknowledge that the issue may, once again, come before the Supreme Court.

In other healthcare news, last Thursday, March 28, a U.S. District Court judge declared the Department of Labor’s new rules for Association Health Plans (AHPs) as illegal. This is a blow to associations and their small business members seeking to provide less expensive healthcare plans outside the ACA. The judge argued that by enabling associations to offer plans without the minimum set of benefits as required by the ACA, the rule was “clearly an end-run around the ACA.” The DOJ has not yet decided how it will respond to the ruling.

In the meantime, the Auto Care Association is still lobbying on several potential ACA “fixes.” These include a delay in, or repeal of, the Health Insurance Tax (HIT), which continues to drive up the cost of healthcare premiums in the fully-insured market, and the Cadillac Tax provision, which is a 40% excise tax on benefit-rich plans. While temporarily repealed, the HIT is currently set to return in January 2020 and the Auto Care Association is supporting H.R. 1398, which would delay the HIT until 2022. Additionally, the Auto Care Association is on record in support of H.R. 748, which would fully repeal the Cadillac Tax. Both House bills have companion bills in the Senate.

Questions? Contact Paul Fiore.

 

Massachusetts Right to Repair Coalition Adds 1,000 New Independent Shops, Secures 55 Bipartisan Cosponsors

On March 25, Massachusetts Right to Repair, a coalition of Massachusetts independent repair shops and consumers, announced that it recruited more than 1,000 new shops and 55 members of the state legislature to its cause of protecting car owners’ right to choose where they have their cars repaired. The coalition supports bipartisan legislation that would empower consumers to control who has access to the repair and diagnostic data compiled and transmitted by their vehicles.

Read the full release.

Questions? Contact Aaron Lowe.

Learn more: www.massrighttorepair.org

 

FTC Announces Workshop on Manufacturer-imposed Repair Restrictions

The Federal Trade Commission (FTC) announced that it will host a workshop on July 16 to “examine ways in which manufacturers may limit third-party repairs.” According to the notice, the workshop will discuss some of the issues that arise when a manufacturer restricts or makes it impossible for a consumer or an independent repair shop to make product repairs, and whether such restrictions undercut the Magnuson-Moss Warranty Act. Under Magnuson-Moss, car companies are prohibited from conditioning warranty coverage on the use of an original equipment part or service.

As part of the workshop notice, the FTC is calling for the submission of empirical research and data on repair limitations that are imposed by manufacturers and their impact on independent repairers and consumers. The FTC also is seeking information from manufacturers that might justify certain limitations.

The Auto Care Association is in the process of developing information to submit to the FTC. Any members with input that they believe to be of interest should contact Aaron Lowe.

Submissions must be provided to the FTC by 11:59 p.m. EDT on Tuesday, April 30.

Read the full release.

Learn more: https://www.autocare.org/government-affairs/issues/magnuson-moss-warranty-act/

 

Member Input Needed: Demurrage and Detention Practices at Ports

The Auto Care Association has joined the Federal Maritime Commission (FMC) Innovation Team to help advise and bring clarity to when and how shippers pay demurrage and detention fees. Please contact Angela Chiang, director, international affairs, by Friday, April 5 if you have been impacted or have any comments you would like the FMC to consider regarding demurrage and detention practices.

Learn more: https://www.autocare.org/what-we-do/international/fair-port-practices/

 

Reminder: Complete our 2019 Advocacy Survey

What are the most important issues facing the auto care industry? Do you have any experience advocating on behalf of your company? How do you personally feel about the political process? Please help the association effectively plan for future public policy discussions by completing our annual advocacy survey.

Take the survey: http://re.spon.se/tG2iQ6

 

2019 State Legislative Update

Below are some of the pending “priority bills” that the Auto Care Association is tracking at the state level. For more information on these bills, contact Tom Tucker, director, state affairs, at tom.tucker@autocare.org.

Missouri – House Bill 451 | This bill would repeal the requirement that all vehicles must obtain a vehicle safety inspection in order to be licensed.

  • Position: Oppose
  • Status: Bill was amended to allow for vehicles having less than 150,000 miles for the 10-year period following their model year of manufacture to be subject to inspections. Bill passed the House and now moves to the Senate.

Montana – Senate Bill 251 | This bill would require auto repair shops to conduct repairs in accordance with all directives from the OEMs.

  • Position: Oppose
  • Status: This bill failed.

New Jersey – Senate Bill 1712 | This bill would require vehicle manufacturers to provide notice to new vehicle purchases or lease of their rights under the Magnuson-Moss Warranty Act.

  • Position: Support
  • Status: Committee passed unanimously; awaiting vote by the full Senate.

Hawaii – Senate Bill 823 | This bill would require insurers to provide the consumer a choice of OEM crash parts or aftermarket crash parts. If the consumer chooses the OEM part, the consumer shall not be required to pay the additional cost for repairs using that OEM part.

  • Position: Oppose
  • Status: House Finance Committee passed the bill; currently under review by the Fiscal Committee before moving to the full House for a vote.

New Hampshire – House Bill 664 | This bill would require an insurer to reimburse an automobile repairer for all repairs if the repairer follows OEM-recommended collision repair procedures.

  • Position: Support with amendment
  • Status: Amendments exempting certain parts were adopted and the bill passed the House; awaiting a vote in the Senate.

California – Assembly Bill 142 | This bill would increase the amount of the manufacturer lead-acid battery fee to $2 and enable the fee to continue indefinitely.

  • Position: Oppose
  • Status: The bill passed the Environmental Safety and Toxic Materials Committee and was sent to the Appropriations Committee for fiscal review.

Nevada – Assembly Bill 173 | This bill would prohibit repair shops from deviating from OEM repair procedures and prohibit the use of aftermarket parts for 60 months after its manufacture date.

  • Position: Oppose
  • Status: Bill hearing was held on March 12; the Auto Care Association testified with coalition partners in opposition.

Connecticut – House Bill 7266 | This bill would mandate that no policies shall require a repair shop to deviate from the collision repair guidelines, procedures, recommendations and service bulletins issued by the vehicle or OEM.

  • Position: Oppose
  • Status: Bill hearing was held on March 7; the Auto Care Association testified with coalition partners against the bill. 

Illinois – Senate 2014 | This bill would require that no vehicle repair facility or installer may use repair specifications or procedures that are not in compliance with the OEM for those parts. Further, no estimate may include the use of non‐OEM aftermarket crash parts unless authorized by the customer in writing.

  • Position: Oppose
  • Status: No action has been scheduled.

Minnesota – Assembly Bill 173 | This bill would prohibit insurers from conditioning payment to settle a claim on the use of a repair procedure or specification that conflicts with the repair procedures and specifications recommended by the OEM, notwithstanding the use of OEM parts.

  • Position: Oppose
  • Status: Bill failed to reach crossover.

New York – Assembly Bill 3872 | This bill would prohibit insurers from conditioning payment to settle a claim on the use of a repair procedure or specification that conflicts with the repair procedures and specifications recommended by the OEM, notwithstanding the use of OEM parts.

  • Position: Oppose
  • Status: No action has been scheduled.

New York – Assembly Bill 2911 | This bill would prohibit insurers from limiting payment on claims for damage to motor vehicles based on pricing caps for labor, parts, paint or repair materials; prohibits insurers from recommending a repair facility.

  • Position: Oppose
  • Status: No action has been scheduled.
Texas – House Bill 1348 | This bill would require numerous restrictions related to alternative parts including price‐based prohibition of least expensive parts. It includes requirements for OEM specifications and mandate the use of OE repair procedures.
  • Position: Oppose
  • Status: No action has been scheduled.

Texas – House Bill 2696 | This bill would eliminate the regular mandatory vehicle safety inspections for noncommercial vehicles.

  • Position: Oppose
  • Status: Bill hearing scheduled for April 3.

Questions? Contact Tom Tucker.

   

Get the Latest Coverage of the 2020 Elections

Thanks to support from the Auto Care Political Action Committee (ACPAC), we are pleased to bring Capital Report readers the latest “Inside Elections with Nathan Gonzalez,” a bi-monthly nonpartisan analysis of U.S. elections.

Read the latest issue: https://www.autocare.org/Government-Affairs/Capital-Report/Election-Updates/inside-elections-032219/
 

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