What Producers Need to Know to Sell LTCI
By Tom Riekse, Jr.
 Since the Deficit Reduction Act of 2005 went into effect, more and more states have looked into adopting a Long-Term Care Insurance (LTCI) Partnership program for the simple reason that private LTCI will save the states future Medicaid dollars. The popular media, too, has largely been positive toward long-term care planning. As of July 2008, more than 30 state legislatures had either considered or decided to become LTC Partnership states, and most mandate training for producers to sell this type of coverage. However, not all the states have yet firmed up specific training requirements.
Most of these states introducing partnerships require, at a minimum, LTCI training based on the National Association of Insurance Commissioners (NAIC) model, which requires an initial eight hours of study, with a four-hour refresher course every two years. Some states have added provisions of their own, or require state-specific supplemental information. As the public becomes more aware of LTCI with its increasing availability, this field may be expected to grow—along with producer questions about it.
Currently a myriad of training options exist from a number of sources, but producers must take some care to find out exactly what is, or will be, required within their states. For example, Colorado’s requirements are among the toughest, mandating an initial eight hours of classroom training along with another eight hours of self-study, then five hours of follow-up classroom training every two years. As mentioned, many states also require supplemental information specific to their own Medicaid programs and other regulations, but Minnesota mandates that its state-specific material be incorporated into the general LTCI training and not be presented separately. Florida had an October 1, 2008, deadline for producers to complete a two-hour state-specific supplement on top of the NAIC program, but at the time of writing, the deadline had been suspended for further consideration.
In some states like Illinois, training requirements have been updated. Prior to July 1, 2008, Illinois producers had to complete a six-hour course. Now they must take another course by July 1, 2009 covering the NAIC content. In Iowa, producers previously had to take the initial eight-hour NAIC course with a six-hour follow-up every three years. Now the initial training, though still based on the NAIC model, requires only four hours of study, with a three-hour refresher every three years.
While some states have special or state-specific training requirements, the great majority follow the NAIC model. If a producer has completed the training in one state, he or she will be qualified to sell LTCI in most other states. Because of a few exceptions and because training mandates are still being solidified in some places, it’s advisable to double-check requirements with your state’s regulatory board. Additionally, because not every state is moving toward partnership at the same rate, deadlines for training can vary.
The training must consist of topics related to:
- LTCI
- Long-term care services
- Qualified state LTCI partnership programs
- State and federal rules and requirements, as well as the relationship between qualified state LTCI partnership programs and other public and private coverage of long-term care services, including Medicaid
- Available long-term care services and providers
- Changes or improvements in long-term care services or providers
- Alternatives to the purchase of private LTCI
- The effect of inflation on benefits and the importance of inflation protection
- Consumer suitability standards and guidelines
The required training must be “carrier neutral,” and cannot include any sales or marketing information, materials or training other than those required by state or federal law. These training requirements may be approved as continuing education courses under applicable state law or regulation.
There are various methods to use to get the training done. Several carriers have provided extensive live classroom training or negotiated discounts on online training, which can include audio and video presentations. AHIA has partnered with AHIP to produced training and several other non-carrier education firms also offer courses.
Admittedly, producers may find themselves under pressure short term to complete the mandatory training. However, the long-term gain will be well worth the effort.
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Great Conference — Now a Time for Action
 All who visited San Diego earlier this month were provided a wealth of information. The AHIA Employee Benefits Symposium kicked off the education and was credited with having provided the “most valuable information, I’ve ever received at a local, state or national meeting” by Trent Bryson.
During the NAIFA general sessions and educational workshops, attendees learned important lessons. The AHIA-sponsored workshops were well received. Tom Petersen presented Excuse Me, But There Is A HOLE in Your Protection. Using real case studies, Petersen explored variations of disability insurance plans that can be, and are, used. Excess and specialty disability plans for buy-sell, buy-in, business overhead expense, key person, severance and contract agreements, venture capital funding, and bank loans, as well as excess of personal or group disability plans were identified and discussed. One attendee was overheard saying “This was great. I’m dealing with a severance situation now. He’s right.”
Author Dave Racer presented Hope 4 Health Care Reform and our members loved it. Dave encouraged agents to personally commit to fighting for a free market in health care.
“We talk to employers. They talk to employees. This gives us access to millions of people, to give them facts about health reform” said Racer.
The facts needed are readily available in FACTS: Not Fiction. Dave is making FACTS: Not Fiction available to AHIA members at a huge discount. This is just in time for the fall 2008 election cycle.
You can get the books for as little as 82 cents each, if you buy a case (215) at just $175. Or you can get 100 for $90 – 90 cents each. Go to www.alethospress.com/ahia.htm to take advantage of this offer.
FACTS: Not Fiction is the perfect handout for employers, employees, legislators, health care providers, the media; anyone you can help influence.
Encourage your local chapters to buy these by the case. And tell other agents about this offer. Thank you for your willingness to engage in this vital health reform debate, a debate we must win.
The health-related presentations concluded with AHIA Annual Meeting keynote speaker Roger Schultz and 2008-2009 AHIA President Robelynn Abadie. Schultz provided step-by-step instructions on how to distinguish yourself from the competition and Abadie outlined the importance of the work agents provide. She provided emotional testimonies, including her personal story.
“It involves a young, divorced mother of two small children who were under the age of 5 at the time. Obviously, the divorce was imminent and the father left the family without future support after he moved out of state. Finances were very tight and her income was based on commissions which early on were inconsistent.
Years passed and when the children were ages 13 and 11, she found out she had to have surgery for a tumorous growth. The surgery was successful and the tumors were benign, but took her away from work for nearly three months. Six months later, another surgery was scheduled, which also created an extended absence from work.
The only income she had during that time off was from a disability income policy she had purchased and partial disability benefits were paid for nearly nine months after the initial claim payment.
- The proceeds from that policy kept them safe in their home.
- The income from it prevented her from withdrawing the children from their private church school where they had found security after the upheaval in their life.
- The peace of mind that came from such a seemingly minor transaction was immeasurable.
That young woman was me.”
Mark your calendars now to attend next year’s events in Orlando, Florida, September 12-16, 2009.
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Health on the Hill
Congress Tackles Tight Schedule
 Congress returned to Washington on September 9 for a three- to four-week session with the primary focus on passing legislation to keep the government funded and operating past the start of the fiscal year that begins October 1. Rather than approving numerous appropriations bills, on which lawmakers have had difficulty finding consensus this year, Congressional leadership plans to pass an enormous continuing resolution (CR) that will in one bill provide the funding for the entire government from October 1 until whatever the agreed-upon end date of the CR turns out to be.
Ideally, Congress would like the CR to provide funding through February 2009, so that the 111th Congress can address the fiscal priorities of the new president and the new Congress. However, continuing partisan disagreements over such issues as the tax extenders bill, the alternative minimum tax (AMT) correction bill, and energy legislation may cause lawmakers to settle for a CR that lasts only until a week or two past the November 4 elections. In that case, the 110th Congress would return to Washington in mid-November for a lame duck session. Both Democrats and Republicans would like to avoid that result, but leaders from both parties acknowledge the possibility of a lame duck session in November/December.
Legislation of interest to AHIA members that could break through the partisan gridlock is a mental health parity bill. Currently mental health parity rules that reflect a compromise between House and Senate legislation (H.R 1424, S.558) are attached to a Senate tax extenders bill (S.3335), but lawmakers are working on a free-standing bill that might win enactment. (The tax extenders bill—specifically, whether to offset its cost—is among the most partisan and controversial of the remaining must-do bills.)
Another bill that has the potential for enactment is an expanded Americans with Disabilities Act (ADA). The Senate passed the expanded ADA (S.3406) on September 11. The House passed its version of it (H.R.3195) in June. Relatively minor differences in the two bills—which expand the definition of “disability” that triggers ADA protections—must be reconciled. But with the Senate’s approval coming by unanimous consent, and with the House approval coming by an overwhelming 402 to 17 vote, the ADA expansion bill will likely win Congressional approval. Whether the president will sign it into law (he objects to the expanded definition of “disability”) is an open question, but it appears Congress’ approval is strong enough to override a potential veto.
Target date for final adjournment of the 110th Congress is October 2. However, the highly partisan effort to enact sweeping energy policy legislation will determine if lawmakers will have to return for a lame duck session after the November 4 election. At this time, a lame duck session seems likely, but it is too soon to tell with certainty.
Senate Finance Plans September Health Reform Hearings
The Senate Finance Committee plans three health care hearings this month. The three September hearings are part of the committee’s ongoing focus on health reform. Throughout 2008, the committee’s chairman, Senator Max Baucus (D-MT), has convened hearings, roundtables and events to prepare for congressional action on health reform next year.
The first of the three September hearings was held on September 9. Titled “Improving Health Care Quality,” the hearing examined the importance of measuring and improving the quality of care provided to patients in all settings. Witnesses also testified about quality improvement initiatives in the private sector.
The next hearing, “Delivery System Reform,” is scheduled for September 16. Topics to be addressed at that hearing include creating a patient-centered model of care, understanding the importance of primary care, and developing new approaches to shore up the role of primary care in the health system. The third hearing , “Insurance Market Reform” will convene on September 23 and explore ways to improve access to health insurance through pooling arrangements, or through the creation of health insurance exchanges or “connectors.” The concept of “connectors” envisions connecting individuals, small businesses and those eligible for premium subsidies to available health insurance plans.
The panel’s comprehensive examination of health care reform is expected to continue to be a top priority during the next session of Congress. Health reform is very probably going to be the first major legislative initiative of 2009 if Democrats win the White House. It is also a priority for the GOP, but may not be the first initiative of 2009 if the GOP prevails in the November elections.
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Treasury, SBA Partner to Help Small Businesses Understand the Value of Health Savings Accounts
On September 12, the Treasury Department and the U.S. Small Business Administration announced a new Health Savings Accounts website that provides small businesses with information on how Health Savings Accounts (HSAs) can help meet their employees' health care needs.
While many Americans have access to health coverage through their employers, many employees work for small companies that are unable to sponsor health insurance plans. Many of these employees can benefit from the affordability and flexibility of HSAs and HSA-eligible health plans.
The new website presents the advantages of HSAs, provides comparisons to other health coverage options, and has other materials to help employers and individuals determine whether and how to enroll in HSA-eligible coverage and how to save for health care costs through an HSA.
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’08 Health Care Debate
Both presidential nominees have proposed tax policy changes that significantly redesign the health care landscape. Their proposals are categorized into the good, the bad and the vague below:
First the good:
Obama
- Maintains traditional group coverage
- Increases health technology
- Calls for chronic disease management & wellness programs
- Malpractice reform
McCain
- Retains same tax exclusion for employers
- Promotes Guaranteed Access Plan (GAP) similar to 34 existing state high risk pools
- Expands HSAs
- Increases health technology
- Calls for chronic disease management & wellness programs
- Malpractice reform
Now for the not so good and the vague:
Obama
- Prohibits coverage denial due to pre-existing conditions
- Creates new public insurance program
- Creates a “Play or Pay” mandate
- Does not support HSAs
- Expands coverage options for children, including raising the national dependent age to 25
- Imposes “strict” limits on loss ratios
- Gives states flexibility to experiment with reform
McCain
- Replaces existing tax exemptions for employer-sponsored health care with a refundable health care tax credit - $2500/individuals, $5,000/families
- Allows Association Health Plans
- Cross-state selling
- Gives states flexibility to experiment with reform
Both candidates’ proposals will present significant challenges, but Sen. McCain’s approach seems less dangerous — at least at this point. Primarily because many of the concerning elements of his proposal will not likely be acceptable to the democratically controlled Congress.
Additional information can be found in the freshly minted Democrat and Republican policy platforms.
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Mark Your Calendars
September 22nd – DC Employee Benefit Summit
$100 Discount for AHIA Members
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Promoting AHIA and the Role of the Advisor
In addition to its regular communication with members and leadership, AHIA officers continue to spread the AHIA message through appearances in various press and industry magazines as well as participation in state and local NAIFA chapter meetings, and various conferences and forums. Recent visits/appearances include:
- AHIA President Robelynn Abadie – AHIA Employee Benefits Symposium, NAIFA 2008 Convention and Career Conference, AHIA Annual Meeting, Advisor Today, Health Insurance Outside the Box
- AHIA Past President Tom Vander Wal – AHIA Employee Benefits Symposium, NAIFA 2008 Convention and Career Conference, AHIA Annual Meeting
- AHIA President-Elect William Foudy – AHIA Employee Benefits Symposium, NAIFA 2008 Convention and Career Conference, AHIA Annual Meeting
- AHIA Secretary Michael Brown – AHIA Employee Benefits Symposium, NAIFA 2008 Convention and Career Conference, AHIA Annual Meeting
- AHIA Treasurer Larry Fortenberry – AHIA Employee Benefits Symposium, NAIFA 2008 Convention and Career Conference, AHIA Annual Meeting
- EVP Diane Boyle – AHIA Employee Benefits Symposium, NAIFA 2008 Convention and Career Conference, AHIA Annual Meeting and various congressional meetings and hearings
Here are a few ways you can help communicate your association’s message:
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2008-2009 AHIA Board of Directors
 PRESIDENT
Robelynn H. Abadie, CSA, LUTCF, RFC
PRESIDENT-ELECT
William J. Foudy, LUTCF
SECRETARY
Michael O. Brown, LUTCF
TREASURER
H. Larry Fortenberry, CPA, CLU, ChFC
IMMEDIATE PAST PRESIDENT
Thomas J. Vander Wal
DIRECTORS
Ed Anderson, CLU, LUTCF
Gregory A. Bailey, FSS
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