Georgia Senate leaders found a way around their colleagues’ initial squeamishness about passing a controversial minimum commission bill pushed by a powerful House insurance agent to get the measure moving again Wednesday.
Lt. Gov. Casey Cagle and Senate leaders temporarily added two members to the Senate Insurance Committee for a meeting Wednesday. The agents bill backed by House Rules Chairman John Meadows, R-Calhoun, an insurance agent, then won the committee's approval.
The move came two days after the same committee stalled House Bill 838 when four members recused themselves because they work in the insurance industry. That nonvote came a day after The Atlanta Journal-Constitution raised questions about Meadows' involvement.
But Meadows’ Rules Committee decides which Senate bills get a vote in the House, and he made it clear that Senate bills would have a hard time getting through his committee. That is expected to change now that his bill is moving.
With the two new members on the Senate Insurance Committee, the measure passed 4-2.
State Sen. Burt Jones, R-Jackson, who serves on the committee and opposed the bill, noted that the same panel recently didn't act on legislation calling for an increase in the minimum wage.
“And now we are prepared to vote on guaranteeing people an income with this legislation, when many of the members of the General Assembly will be positively affected by it,” said Jones, who founded an insurance business. “It would be kind of hard to go back and explain to folks why we can’t do something for hardworking Georgians but we are free to do things for General Assembly members.”
State Sen. Josh McKoon, R-Columbus, an attorney who serves on the committee, said the measure has legal issues. Legislative lawyers agree.
In a letter Tuesday, legislative counsel Wayne Allen said there could be potential issues with the bill that would make it subject to a legal challenge. Allen cited case law dating to 1951, when the Georgia Supreme Court struck down a law allowing the Georgia Milk Control Board to set the price of milk because it violated the state constitution’s due process clause.
The courts, Allen said, have a long history of trying to prevent any intrusion by lawmakers into private business affairs without it clearly being in the public interest. And it was not clear, Allen said, that the courts would see HB 838 as being in the public interest.
State Rep. Shaw Blackmon, R-Bonaire, who carried the measure for Meadows, said: "It may or may not have some issues. I think any legislation we pass can be challenged by anyone in any way, and I think it's up to the courts to decide."
Blackmon said his aim was to stem the slide of commissions being paid to insurance agents for selling small-group health care policies.
The bill would guarantee a minimum 5 percent commission for agents who sell group health policies to small businesses. It also would set a 4 percent minimum commission for individual health benefit plans.
Blackmon and lobbyists for agents said the measure was needed in part because the Affordable Care Act mandated that insurance companies spend at least 80 percent of the money they take in from premiums on health care costs and improving quality. The other 20 percent can go to administrative, overhead and marketing costs, and agents’ commissions are being cut as companies seek to keep most of that 20 percent.
“Small businesses are the ones that have taken the punishment,” Blackmon said. “I just hate for small businesses not to get a fair shake. That’s why we’re here, to have those kind of discussions.”
However, Republican lawmakers have long criticized government attempts to involve itself in the marketplace, particularly on wage issues. And the fact that the idea came from a powerful House leader who sells health insurance for a living raised conflict-of-interest questions.
Georgia’s conflict-of-interest laws are weak. Some would say nonexistent. Members can recuse themselves from voting on issues when they have a conflict. Some do. Many don’t. And members don’t publicly investigate such conflicts. They generally only play out in the media.
The rules basically dictate that unless a bill solely benefits a member’s business, recusal isn’t necessary. House members recused themselves 18 times during the 2015 session, according to the most recent data available. In the Senate, members asked to be excused from a vote on seven occasions.
About a dozen lawmakers who work in the insurance industry or have lapsed agents licenses serve on the House committee that passed Meadows’ bill. When four members of the Senate Insurance Committee recused themselves from voting Monday on Meadows’ bill, it was unusual: Those same members have voted on dozens of other insurance bills over the years.
Legislative rules allow leaders to temporarily add members to committees.
HB 838 is now eligible to be considered by the Senate on Tuesday or March 24, the last two days of the 2016 session.
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