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WASHINGTON The $787 billion stimulus package recently enacted by Congress and signed into law by President Barack Obama in February contained provisions of substantial significance to the life-health insurance industry, both for carriers and agents. Especially significant in terms of cash outlays were provisions in the package improving the short-term health insurance safety net for people laid off from their jobs. The final bill provided $24.7 billion to provide subsidies for 9 months to laid off employees under the Consolidated Omnibus Budget Reconciliation Act or COBRA. It was available March 1. Robelynn Abadie, president of the Association of Health Insurance Advisers, noted at that time that the COBRA provision “is the most immediate concern to AHIA members.” Industry officials expected numerous challenges for human resource/risk managers/COBRA administrators, as well as small employers and agents to implement the subsidy. This was particularly so, she explains, for those small employers who utilize the State Continuation programs and usually have little experience or assistance other than what their agent provides. “The role of the agent is critical as employers are scrambling to comply but AHIA members are prepared to meet the challenge,” Abadie said. It points up the important role agents play in the health insurance area, she said. “A critical point is that agents do so much more than just sell policies. We assist our clients and guide them through plan changes, mandates, economic and personal challenges, as well as provide a level of assistance that no one else offers.” Group health carriers also benefited from a provision that establishes a temporary increase in the federal medical assistance percentage (FMAP) with respect to Medicaid payments for FY2009-FY2011 for eligible states. The estimated cost of this was $86.6 billion. The bill also provided $19.4 billion for first-time incentives for hospitals, doctors and other healthcare providers to keep health records electronically while also providing $1.1 billion to fund wellness programs and $1 billion to study the comparative effectiveness of medical treatments.
WASHINGTON The $787 billion stimulus package recently enacted by Congress and signed into law by President Barack Obama in February contained provisions of substantial significance to the life-health insurance industry, both for carriers and agents. Especially significant in terms of cash outlays were provisions in the package improving the short-term health insurance safety net for people laid off from their jobs. The final bill provided $24.7 billion to provide subsidies for 9 months to laid off employees under the Consolidated Omnibus Budget Reconciliation Act or COBRA. It was available March 1. Robelynn Abadie, president of the Association of Health Insurance Advisers, noted at that time that the COBRA provision “is the most immediate concern to AHIA members.” Industry officials expected numerous challenges for human resource/risk managers/COBRA administrators, as well as small employers and agents to implement the subsidy. This was particularly so, she explains, for those small employers who utilize the State Continuation programs and usually have little experience or assistance other than what their agent provides. “The role of the agent is critical as employers are scrambling to comply but AHIA members are prepared to meet the challenge,” Abadie said. It points up the important role agents play in the health insurance area, she said. “A critical point is that agents do so much more than just sell policies. We assist our clients and guide them through plan changes, mandates, economic and personal challenges, as well as provide a level of assistance that no one else offers.” Group health carriers also benefited from a provision that establishes a temporary increase in the federal medical assistance percentage (FMAP) with respect to Medicaid payments for FY2009-FY2011 for eligible states. The estimated cost of this was $86.6 billion. The bill also provided $19.4 billion for first-time incentives for hospitals, doctors and other healthcare providers to keep health records electronically while also providing $1.1 billion to fund wellness programs and $1 billion to study the comparative effectiveness of medical treatments. The legislation’s tax provisions included both business and individual tax relief that will benefit small insurance agencies, said officials at the National Association of Insurance and Financial Advisors. On the business side, the bill included an additional year of authority for small businesses to expense (rather than capitalize) up to $250,000 in capital acquisitions, and a 50% bonus depreciation provision. At the same time, the industry spent time waiting for the other shoe to drop. For example, insurance agents who work in the executive compensation market needed to be watchful of the limitations placed on the executives of companies participating in the Trouble Asset Relief Program (TARP), NAIFA cautioned its members. “There is concern that Congress may look to expand executive compensation limits to any company receiving federal assistance, which could include companies that are receiving special tax breaks,” NAIFA said in a bulletin to its members. While the bill addressed the “pressing problem” of patching the alternative minimum tax for this year, “it did not address the equally compelling problem presented by the scheduled repeal of the estate tax next year or the sun-setting of many other Bush-era tax provisions originally enacted in 2001 and 2003,” NAIFA said. At the time the stimulus was passed, Aetna spokesman Mohit Ghose said the company “is very supportive” of the healthcare provisions in the stimulus package, including Medicaid money for those who lose their jobs and don’t qualify for COBRA, as well as the COBRA subsidy. “The funds to support wellness program and the $1 billion to study the comparative effectiveness of medical treatments are also very important as we try to build a better healthcare system,” he said. But “details matter,” Ghose cautioned. These include the regulations implementing the privacy provisions in the medical records funding program. “We must get them right so we don’t impede the progress in developing better systems of healthcare.” John Greene, vice president of congressional affairs for the National Association of Health Underwriters, voiced deep concern at this time about a provision in the health records provision that gives all 50 states’ attorneys general the authority to enforce the privacy provisions. “This is going to be problematic because it could potentially create 50 different enforcement guidelines health agents will have to follow,” Greene said. “It runs contrary to what we were trying to achieve,” he added, noting that NAHU would have preferred a federal preemption scheme. “The idea is that you want the flow of information from anywhere you are in the country,” he said. “This could staunch the flow of information from one place to another.” At the same time, “we are glad they have put real money into this effort and we will see if the privacy concerns we have concerns about actually becomes a 50-state mess,” he said. Greene also noted provisions in the bill that expand the number of people eligible for healthcare assistance under the Trade Adjustment Act. The problem with the provision is that it did not expand the options as to how they could use the credit. “The only options that are automatic are high risk pools, which are very expensive,” Greene said. “Why should you encumber the federal government with the highest-cost options?” he asked. “As a result, you could have a credit that you couldn’t use.”
The legislation’s tax provisions included both business and individual tax relief that will benefit small insurance agencies, said officials at the National Association of Insurance and Financial Advisors. On the business side, the bill included an additional year of authority for small businesses to expense (rather than capitalize) up to $250,000 in capital acquisitions, and a 50% bonus depreciation provision. At the same time, the industry spent time waiting for the other shoe to drop. For example, insurance agents who work in the executive compensation market needed to be watchful of the limitations placed on the executives of companies participating in the Trouble Asset Relief Program (TARP), NAIFA cautioned its members. “There is concern that Congress may look to expand executive compensation limits to any company receiving federal assistance, which could include companies that are receiving special tax breaks,” NAIFA said in a bulletin to its members. While the bill addressed the “pressing problem” of patching the alternative minimum tax for this year, “it did not address the equally compelling problem presented by the scheduled repeal of the estate tax next year or the sun-setting of many other Bush-era tax provisions originally enacted in 2001 and 2003,” NAIFA said. At the time the stimulus was passed, Aetna spokesman Mohit Ghose said the company “is very supportive” of the healthcare provisions in the stimulus package, including Medicaid money for those who lose their jobs and don’t qualify for COBRA, as well as the COBRA subsidy. “The funds to support wellness program and the $1 billion to study the comparative effectiveness of medical treatments are also very important as we try to build a better healthcare system,” he said. But “details matter,” Ghose cautioned. These include the regulations implementing the privacy provisions in the medical records funding program. “We must get them right so we don’t impede the progress in developing better systems of healthcare.” John Greene, vice president of congressional affairs for the National Association of Health Underwriters, voiced deep concern at this time about a provision in the health records provision that gives all 50 states’ attorneys general the authority to enforce the privacy provisions. “This is going to be problematic because it could potentially create 50 different enforcement guidelines health agents will have to follow,” Greene said. “It runs contrary to what we were trying to achieve,” he added, noting that NAHU would have preferred a federal preemption scheme. “The idea is that you want the flow of information from anywhere you are in the country,” he said. “This could staunch the flow of information from one place to another.” At the same time, “we are glad they have put real money into this effort and we will see if the privacy concerns we have concerns about actually becomes a 50-state mess,” he said. Greene also noted provisions in the bill that expand the number of people eligible for healthcare assistance under the Trade Adjustment Act. The problem with the provision is that it did not expand the options as to how they could use the credit. “The only options that are automatic are high risk pools, which are very expensive,” Greene said. “Why should you encumber the federal government with the highest-cost options?” he asked. “As a result, you could have a credit that you couldn’t use.”