November 22, 2013
Illinois Supreme Court Rules in Favor of Hartney but Invalidates Sourcing Rule
The Illinois Supreme Court issued its ruling this week in the case of Hartney Fuel Oil Company v. Brian Hamer. The case deals specifically with the ongoing and controversial issue of how to determine where a sale takes place in order to ensure the correct local government receives their proper share of sales tax revenues from each transaction. The case was a win for Hartney (and presumably other similarly situated retailers), as the court held that they had complied with the long-standing Department of Revenue regulation that sources local tax to the municipality where the purchase order for a sale is accepted.
The court then proceeded to rule that the Department’s regulation was not a proper interpretation of the statute, which they held requires a “facts and circumstances” test that looks at more than just where a purchase order is accepted to source a sale for local sales tax purposes. The Department had argued unsuccessfully that their current regulation called for such a test, but the court ruled that the regulation clearly looked at purchase order acceptance to determine the location of a sale. While the rule was deemed invalid, the court held that Hartney was protected since the Taxpayers’ Bill of Rights precluded the Department from assessing tax, penalty and interest against a taxpayer who was in compliance with a written opinion of the Department.
Unfortunately, the court’s decision to invalidate the municipal, county and RTA tax regulation on local sourcing leaves retailers without future guidance on how to determine the factors that should be considered in determining the proper local tax to apply to a particular sale. The Illinois Chamber has already been in contact with the Department of Revenue, legislative leaders and members to begin discussions on a legislative solution.
Illinois Chamber Workers’ Compensation Reform Package Introduced
During Veto Session, Rep. Dwight Kay (R-Edwardsville) and Senators Kyle McCarter (R-Lebanon), Christine Radogno (R-Lemont), Dale Righter (R-Charleston), Dan Duffy (R-Lake Barrington), Bill Brady (R-Bloomington) and Sen. Pam Althoff (R-Crystal Lake) introduced our workers’ compensation reform measures. The legislation follows the findings of the recently released report “The Impact of Judicial Activism in Illinois…Workers’ Compensation Rulings From the Employer’s Perspective”. Hyperlinks and position papers for each bill can be found on the Illinois Chamber’s website, www.ilchamber.org.
HB 3736, sponsored by Rep. Kay/SB 2625, sponsored by Sen. McCarter, Sen. Righter and Sen. Duffy: overturns Interstate Scaffolding decision and allows an employer to discontinue temporary benefits when an employee is discharged for “misconduct”;
HB 3737, sponsored by Rep. Kay/SB 2622, sponsored by Sen. McCarter, Sen. Righter and Sen. Duffy: establishes a primary cause standard for determining whether the workplace contributed/caused the injury; defines the scope of “traveling employee” to employment-related travel or the injury occurs while actively engaged in the duties of employment.
HB 3739, sponsored by Rep. Kay/SB 2623, sponsored by Sen. McCarter, Sen. Righter and Sen. Duffy: overturns the Will County Forest Preserve decision and restores that a shoulder injury award calculation is based upon being part of the arm; allows an employer credit for awards previously paid for “body as a whole” injuries;
Illinois Department of Insurance Allows Continuation of Cancelled Insurance Policies
The Department of Insurance announced today that it will join with 10 other states and allow insurance carriers to extend their cancelled health insurance policies for one year; a move that aligns with the announcement made by the Obama Administration last Thursday after millions of individuals, families, and employer plan policyholders received health insurance cancellations letters for their non-Affordable Care Act compliant plans.
The announcement today does not require those carriers to extend those policies, but rather allows health insurance companies to extend those policies for one year if they wish to do so. The Department is expected to follow with guidance for insurance companies on how this extension will be implemented.
The Department’s announcement also came on the same day the Obama Administration extended the enrollment deadline for individuals/families to select a qualified health plan on the Health Insurance Marketplace in order for that coverage to take effect on January 1. The original deadline by which those individuals/families would have to select a plan with coverage effective on January 1st was December 15; a deadline that has now been extended to December 23. Any plan selected after December 23 through February 15 will carry a coverage effective date of February 1 and so on until open enrollment ends on March 31 (plans selected between March 15 and 31 would take effect May 1).
Why were health insurance policy cancellations issued in the first place?
The Affordable Care Act requires all individual and group health insurance plans to cover what are referred to as the essential health benefits in 2014. These benefits includes 10 broad categories of services, including maternity, hospitalization, prescription drug, wellness, pediatric dental and vision benefits among others, in addition to all Illinois health coverage mandates. The essential health benefits may not carry any annual dollar limits on these services and all plans must also comply with new yearly out-of-pocket maximums of $6,3750 for individuals/$12,700 for families.
Many of the health insurance policies sold pre-2014 – especially in the individual market – do not comply with the essential health benefits let alone the out-of-pocket maximums. These policies, therefore, are no longer ACA-compliant and cannot be approved by the individual state insurance commissioners for sale. The only exception for these policies are those that are considered “grandfathered plans” or those plans that were purchased prior to March 23, 2010 and have not since cut any benefits or significantly increased their deductibles or co-pays.
The arrival of the policy cancellation letters, however, were supposed to accompany a fully-functioning website that would allow those cancelled policyholders the ability to explore their options moving forward.