Judge Halts State’s Attempt To Take Funds From Insurer

Nov 28, 2017

A judge has issued an injunction that will at least delay state lawmakers from getting some of the money they planned for in the revenue plan they finished last month.

The cash is tied to a pending case about whether the state can constitutionally force the Joint Underwriting Association—a medical malpractice insurer—to give up $200 million.

This is the second year lawmakers have tried to take surplus money from the JUA to help balance perennial budget gaps.

The state created the JUA in 1975, and its funds and surplus have since been kept independent. Its employees don’t get state benefits, it’s not housed in a state building, and a spokeswoman has said the group is entirely funded by contributions from those it insures.

So when lawmakers passed a budget plan saying the JUA would be dissolved if it didn’t turn over $200 million by December 1, the group sued.

US District Judge Christopher Conner has now suspended the December deadline.

In court papers, he said state lawyers misinterpreted language dictating how JUA funds should be distributed if it shuts down.

The JUA currently has a surplus of $268 million, and has said turning over $200 million of that would devastate its ability to insure its clients.

Conner seconded that assessment.

No court date has been set yet.

A spokesman for Governor Tom Wolf declined to comment on ongoing litigation.