Prepare Now – November is LTC Awareness Month
 Now is the time to prepare for Long Term Care Awareness Month and following are a few simple steps AHIA believes will help agents provide objective information to facilitate LTC planning. The November issue of Health Insurance Matters will include additional information to help you promote long term care awareness. Using these resources, you can increase public awareness about the risks and costs of long-term care, as well as the potential need for services.
AHIA will distribute a national press release and AHIA President Robelynn Abadie, LUTCF, CSA, RFC will write to President George W. Bush and members of Congress to share LTC experiences; explain the role of the agent; and highlight the fact that long-term care insurance reduces the burden on public programs.
You can easily participate in LTC Awareness Month by using the following steps:
The reality is that most of us will need some type of long-term care in our later years. While this is a normal part of aging, the tragedy is that many of us don’t plan for it adequately. Help promote Long-Term Care Awareness Month and more importantly, long-term care planning.
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Health on the Hill
Two New Laws Affecting Group Insurance
 Mental Health Parity - Congress entered an extended recess period after approving the much-publicized Emergency Economic Stabilization Act (EESA) that combines a financial industry stabilization bill with other initiatives address tax extenders, alternative minimum tax relief, energy tax and mental health parity. The President signed EESA into law on October 3.
The mental health parity provisions expand upon the Mental Health Parity Act of 1996 which required employers with over 50 employees to equate aggregate lifetime limits and annual limits for mental health benefits with aggregate lifetime limits and annual limits for medical and surgical benefits, and allowed for an increased cost exemption if employers demonstrated a one percent or more rise in costs due to parity implementation.
The new law prohibits employer group health plans, including self-insured employers, from adopting mental health (including substance abuse) treatment limitations, financial requirements, or out-of-network coverage limitations unless comparable limitations and requirements are adopted for medical and surgical benefits. Employers with fewer than 50 workers will be exempted from the parity requirements.
The new law also provides a one-year transition period for employers for whom the cost of compliance would exceed two percent of their health insurance costs in the first year and one percent in each subsequent year. It does not apply to health insurance plans that do not include mental health/substance abuse benefits.
The departments of Health and Human Services, Labor, and Treasury are expected to write the regulations for the new law. Regarding enforcement, the Internal Revenue Service may impose a tax of $100 per day per beneficiary on employers or insurers who do not comply with the equity requirements. HHS and DOL can also enforce the provisions, and aggrieved individuals may bring a civil action to obtain covered benefits.
Sick Student Coverage - On October 9, President Bush signed a bill (H.R. 2851) into law that will ensure dependent college students who take a medically necessary leave of absence do not lose health insurance coverage under a new tax code Section 9813.
The House passed the legislation, known as Michelle's Law, by voice vote in July, and in the midst of the financial rescue debate, the Senate passed it by unanimous consent on September 25.
The new law requires group health plans to continue coverage for dependent college students on medical leave for one year after the first day of the medically necessary leave of absence, or until the date on which such coverage otherwise would terminate under the terms of the plan.
CR Funds High-Risk Pool Grants and Comparative Effectiveness Research
On September 30, President Bush signed into law H.R. 2638, the “Consolidated Security, Disaster Assistance, and Continuing Appropriations Act.” This bill includes language, known as a “continuing resolution,” that will provide temporary funding from October 1, 2008 through March 6, 2009 for most federal agencies and programs funded through the annual appropriations process. Grants for high-risk pools and comparative effectiveness research are included among the federal programs that will be funded under this temporary arrangement.
Health Benefits W-2 Disclosure Up for Discussion
On October 7, Senate Finance Committee Chairman Max Baucus (D-MT) and Senators Chuck Grassley (R-IA), Ron Wyden (D-OR), Mike Enzi (R-WY), and Ben Nelson (D-NE) released for comment draft legislation that would require employers to disclose the amount an employer pays for health insurance coverage on behalf of its employees on the Form W-2.
According to the Senators, because many employees are unaware of the amount of money their employer pays for their health insurance coverage, they may be making inefficient choices of health coverage, leading to increased health care spending. The Senators believe that disclosing the amount an employer pays for health insurance coverage on behalf of its employees on the Form W-2 would inform workers about the total cost of their coverage and what they may be giving up in wages. They say that making the cost of health insurance coverage more transparent – in conjunction with other health care reforms such as health information technology, prevention, and pay for performance – could eventually help to control health care costs. The Senators’ health insurance cost disclosure proposal is similar to one contained in President Bush’s fiscal year 2009 budget.
The proposal in the discussion draft would mandate that statements be provided to employees for calendar years beginning after 2008.
Please provide your comments to Diane Boyle to share with the AHIA Legislation Committee and Board of Directors.
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’08 Health Care Debate
 Employers Find Fault with Both McCain and Obama Health Proposals
Resent results of a corporate health care policy survey reveal dissatisfaction among corporate health care sponsors and administrators with the health care reform proposals of both presidential nominees.
A majority of the survey's 187 participants representing employer-sponsored health plans said they opposed a proposal by Senator John McCain (R-AZ) to tax employees for the health benefits they receive from employers. Many also said they opposed a campaign proposal of Senator Barack Obama (D-IL) to mandate that employers pay a portion of their employees' health care costs.
Employer-provided health benefits are not taxed under current law. The McCain campaign said its proposed tax would be offset by a tax credit for health care. The Obama campaign said small employers would be exempt from its proposed mandatory payroll tax on employers that do not provide health insurance.
Employers on their own have adopted a variety of measures to improve employee health and control costs, but survey participants believe the government could do more to promote the disclosure of health care costs and treatment outcomes and the use of health information technology.
Results from the health policy survey show that employers think their employees want employer-sponsored health coverage. In response to a question about where they think employees prefer to get their health insurance, assuming equivalent costs, 87.1 percent of the survey participants answered "their employer or their spouse's employer," 9 percent answered "the individual insurance market," and 3.7 percent said "government sponsored or public programs."
State Health Reform Goes to Voters
In addition to choosing which presidential candidate has the best health care plan, voters in Arizona, Colorado and Montana will have the chance to make dramatic changes to their own states’ health care systems when they go to the polls November 4.
Colorado voters will decide whether companies employing more than 20 workers must offer health insurance. The Freedom of Choice in Health Care initiative in Arizona would prohibit state lawmakers from passing legislation that would require Arizonans to join a government-run health care system.
In Montana, the Healthy Montana Kids Plan would expand eligibility for the state’s Children’s Health Insurance Program (CHIP) and the Montana Medicaid Program, allowing about 30,000 more uninsured kids into these programs. The measure would also assist lower-income parents pay the premiums for their employer-sponsored plans so that their children could be covered. Other states have passed such legislation. Montana’s legislative efforts were not successful so proponents decided to try the ballot.
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Treasury & IRS Issue Priority Employee Benefits Guidance Items
The Treasury recently published its 2008-2008 Priority Guidance. This document lists 314 guidance projects on which the Treasury and IRS expect to focus during the fiscal year beginning July 1, 2008 and ending June 30, 2009. There are a number of employee benefit item (beginning on page 3) divided into two categories – A) Retirement Benefits and B) Executive Compensation, Health Care and Other Benefits, and Employment Taxes.
The Retirement Benefits projects include 32 items including several items relating to the Pension Protection Action of 2006 that may be of interest to AHIA members.
All 25 items in the Executive Compensation, Health Care and Other Benefits, and Employment Taxes category are listed below:
- Guidance on nondiscrimination rules to self-insured retiree medical plans.
- Final comprehensive regulations on cafeteria plans under §125. Proposed regulations were published on August 6, 2007.
- Guidance on of the Heroes Earnings Assistance and Relief Tax Act of 2008, adding new §125(h), relating to qualified reservist distributions from a health FSA to reservists called to active duty.
- Notice on the effective date for compliance with the requirements of Rev. Rul. 2006-57 regarding the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation fringe benefits.
- Revenue procedure on the application of the cross-reference of §152(e) to other code sections when the custodial parent has not released the claim to the personal exemption for a dependent.
- Revenue ruling on the applicability of §162(l) to COBRA premiums.
- Proposed regulations under §162(m) on the transition relief under Treas. Reg. §1.162-27(f)(1).
- Guidance on additional issues on Health Savings Accounts (HSAs).
- Final regulations on qualified non-personal use vehicles.
- Regulations under §409A on the calculation of income inclusion and additional taxes.
- Guidance on §409A correction program.
- Guidance regarding reporting and income tax withholding under §409A.
- Revenue Procedure on private letter rulings not involving §409A.
- Final regulations under §423 regarding employee stock purchase plans.
- Guidance under §457(f) on ineligible plans.
- Revenue ruling on SECA tax on Conservation Reserve Payments that reflects the enactment of the Food, Conservation, and Energy Act of 2008.
- Guidance of the Heroes Earnings Assistance and Relief Tax Act of 2008 regarding the treatment of military differential pay as wages.
- Regulations implementing new §3121(z), as added by the Heroes Earnings Assistance and Relief Tax Act of 2008, on foreign employers.
- Guidance under §3504 on reporting FUTA taxes for home health care recipients.
- Guidance under §4980B regarding calculation of the applicable premium for COBRA continuation coverage.
- Final regulations on Health Opportunity Patient Empowerment Act of 2006 changes to §4980G with respect to comparable employer contributions to employees’ HSAs.
- Proposed regulations under §4980G on interaction of §4980G and §125 with respect to comparable employer contributions to employees’ HSAs.
- Final regulations under §6039 on information reporting on stock transfers.
- Guidance under §§6205, 6402, 6413, and 6414 on making employment tax adjustments and refund claims.
- Temporary regulations implementing Genetic Information Nondiscrimination Act of 2008.
AHIA will continue to monitor the progress on these items and will notify you as developments arise during the year.
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Mark Your Calendars
 October 23-25, Itasca, Illinois
2008 WIFS National Conference
AHIA Online Forum Series
November 5th: Leading with Questions: The Ultimate Key to increase LTCi sales
December 3rd: Driving a Consistent Message from Start to Finish
January 7th: Health Care Trends and Forecast in 2009
February 4th: Case Studies in Best Practices in Group Benefits
March 4th: The Habits of High Producing Agents
April 1st: Wellness at Work
May 6th: DI-More Important than You think
June 3rd: The Truth about Healthcare Consumerism
July 1st: Differentiate and Expand Your Business
August 5th: The Crucial Impact of Critical Illness
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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 – Know a Plan’s Limit, Wall Street Journal
- AHIA President-Elect William Foudy – Trust For America's Health Meeting, American Diabetes Association Meeting
- AHIA Director Ed Anderson - Missouri Governor's Proclamation Signing for LTC Awareness Month
- EVP Diane Boyle –various congressional meetings and hearings
Here are a few way in which 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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