Health on the Hill
Issues Emerge and Grassroots Grow
 Significant health reform issues are emerging as flashpoints during this early phase in development of a health reform plan and advisors are poised to address them during the April Congressional recess. Teams of 3 to 5 people are meeting with their members of Congress to discuss the hottest topic in the country – Health Care Reform. To participate in a team meeting, call the FDC and FSC Coordinators. The message is simple we:
- Oppose a government provided health plan option. Whether health reform should include a public plan option is being hotly debated. President Obama has endorsed the idea; many Democrats say health reform will fail unless a public plan option exists to force private insurance to be competitive—and they say their support for any plan depends on whether it includes a public plan option. Most GOP lawmakers oppose inclusion of a public plan option—and say it is a deal breaker issue for them. HHS Secretary Designee Kathleen Sebelius has testified that she supports a public option side-by-side with private insurers.
- Support the tax-free status of employer-provided health insurance - No key player has yet insisted on including a health insurance tax cap in a health reform plan. But several have come close—it is an important part of the Senator Baucus’ proposal, for example. President Obama has not taken it off the table, but remains skeptical about it. Opponents are emerging—e.g., Sen. Blanche Lincoln (D-AR) has come out against the idea, saying it could undermine employer-provided health insurance, especially in the small business sector.
- Support the role of the agent/advisor in health care reform – Any reform effort must allow for personal service provided by a licensed, fairly compensated, insurance professional. When the role of the advisor is understood by lawmakers, there is usually agreement that consumers must have access to this.
- Support Health Savings Accounts – Some lawmakers have questioned whether to continue current law’s self-directed health plans (e.g., high deductible health plans coupled with health savings accounts, flexible spending accounts, and health reimbursement arrangements). Members serving the small business health insurance market have found HSAs used in conjunction with high-deductible health plans offer an affordable health care solution.
Members are also encouraged to question the benefits of a government-organized health “connector” or “exchange” when meeting with lawmakers. The Health Insurance Purchasing Arrangements study provides factual evidence that in the few states that tried these connectors, they failed miserably and have been abandoned. (Remember HIPCs from the Clinton plan? Same concept).
Your Government Relations staff has been and continues to actively lobbying the health issue. These efforts were recently augmented with constituent lobbying during the National Leadership Conference which allowed for a “Day on the Hill". Additional grassroots efforts have been activated for the April district meetings and will continue for subsequent recesses in May and July. A targeted campaign to the fill the APIC legislator gaps is underway as well. If you know your member of Congress in the U.S. House or Senate, let us know so we can add you to our growing list of politically active agents.
You can view the 25+ bills monitored by AHIA-NAIFA Health & Employee Benefits by using CapWiz. Cap Wiz allows you to view full bill text, cosponsors and most recent legislative actively. The interactive features of Cap Wiz allow you to identify and contact your lawmakers.
AHIA will continue its efforts to make sure all these issues are resolved in the best interests of AHIA members and the clients they serve.
Budget Battles Continue
The House and Senate approved budgets on April 2 with no Republican support, a sign of deep partisan tensions likely to continue.
Both budget resolutions call for systemic health reform legislation. However, one of the controversial differences between the two budgets is the procedure each contemplates for enactment of a health reform bill. The House resolution calls for passing health reform legislation via the budget law reconciliation process, which because of its statutory limits on debate would prevent a filibuster and allow for passage of a bill by a simple majority in the Senate.
The Senate resolution contemplates regular legislative order, which would give opponents of the bill multiple chances to filibuster it. There are challenges with either approach.
Key Senators, especially those on the committees of jurisdiction (Finance and Health, Education, Labor & Pensions [HELP]), oppose use of reconciliation for health reform, saying it would kill any chance of bipartisan work on the issue. But some in the leadership want the option to remain open to prevent the GOP from adopting a “block anything” strategy with respect to health reform.
There are substantive problems with using reconciliation for health reform. The reconciliation rules require that all provisions in a reconciliation bill impact federal revenue. Any provision that does not affect revenue is subject to a bill-killing point of order that requires 60 votes to waive. Thus, any non-revenue provision would likely have to be left out of the bill. Examples of provisions that could be impacted by this include health insurance standard benefits packages; whether there should be an individual or employer mandate to buy health insurance; whether or not to include a public plan and if so, many of its details; privacy protection rules, etc. Plus, a new law would have to sunset at the end of the budget window unless there are 60 votes to waive the reconciliation rule that prohibits any provision that would affect federal revenue in years beyond the budget window.
The choice of which process to use will be hammered out in conference after the Congress returns from its April recess.
Advocating via the World Wide Web
Congress on You Tube – The Welcome to Congress, YouTube features leaders of both the Senate and the House announcing that Congress is now in session, on YouTube. There’s a House Hub as well as a Senate Hub. Senator Grassley’s Sound Off on Health Care was recently the featured Senate Hub video on YouTube and members were encouraged to post their comments. Senator Grassley offers his appreciation of the shared thoughts on health care reform.
Wall Street Journal Poll - The March 24 issue of the Wall Street Journal included an article titled "Health-Care Battle Set to Focus on Public Plan" (Printed in the Wall Street Journal, page A4) by Laura Meckler. The Wall Street Journal Online is conducting a poll asking if Congress should create a new, government-run health plan to compete against private insurers? Members were asked to vote and were successful in turning the even polling between “Definitely” and “No Way” that appeared the morning of the 24th, to a resounding 63.7% “No Way” as of April 6th.
Social Networking – Legislative updates and activities are also a part of a daily Twitter feed. Information is also shared with YAT's LinkedIn group and on Facebook. States are sharing state legislative information via StateChat.
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Material Error in DOL New Model Notice for COBRA Subsidy
 On March 19, 2009, the Department of Labor (DOL) issued four model COBRA notices in response to the COBRA federal subsidy enacted on February 17, 2009.
The election period outlined on the new model COBRA Continuation Election Form is not compliant with the election period as described in the federal COBRA regulations. Per the federal COBRA regulations: A COBRA Qualified Beneficiary has 60 days from the later of: the date of termination of coverage or the date of the notice.
The DOL’s model COBRA Continuation Election Form does not contain language noting the 60 day election period may begin as of the date of termination of coverage.
If an employer were to send the COBRA election package to a Qualified Beneficiary prior to the termination of their active group health coverage (for example, when coverage goes to the end of the month), the model notice implies that the Qualified Beneficiary has an election period that is shorter than it actually should be. The Qualified Beneficiary could argue that if they had more time they would have elected COBRA continuation coverage. This could lead to liability for the employer if the Qualified Beneficiary were to pursue legal action against the employer for not allowing the full 60 day election period. The ultimate risk to the employer is their financial liability to the Qualified Beneficiary for incurred medical claims if a court concludes that COBRA might have been elected, had the proper election period been provided. The DOL and IRS have been contacted about this matter. We are awaiting a response from the DOL and IRS as to when a revised model notice will be released.
In the meantime, both the DOL’s Employee Benefits Security Administration (EBSA) and the IRS have released more guidance on the new COBRA health insurance premium subsidy. On March 31, the IRS released Notice 2009-27. The Notice includes questions and answers on the COBRA subsidy. Among the issues the Notice addresses is what constitutes “involuntary separation”—the trigger for eligibility for the government subsidy. On April 2, the DOL updated its website including: IRS Notice 2009-27, expanded frequently asked questions on the model notices, a registration page for an upcoming DOL webcast on the new COBRA benefit, and regional workshop announcements. Indeed, sometimes the administrative burden can seem to outweigh the true reason behind the premium assistance provision...this is an opportunity for agents and TPAs to play a significant, positive role.
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 DI Awareness Month is Just One Month Away
May is Disability Insurance Awareness month. AHIA members are encouraged to discuss the valuable of disability income insurance with clients and prospects. Disability income insurance replaces income, restores dignity and relieves financial concerns when confronted with an unforeseen illness or accident. Yet most Americans are not covered. According to the Social Security Administration, 70% of the private sector workforce has no long-term disability insurance.
Do your part to help others learn more about disability income insurance and how it can save families from financial ruin. Start your planning now for Disability Insurance Awareness Month and save the date of May 6 for the “DI-More Important than You think” online forum. You can save 10% on great DI resources to boost your DI activity during the May campaign. Remember to enter promo code DIAM09.
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The American Recovery & Reinvestment Act of 2009 and COBRA Administration
By now, you’ve probably heard the buzz about The American Recovery & Reinvestment Act of 2009 and The Health Assistance for the Unemployed provision, the provision which affects the COBRA administration of our clients. Maybe your clients have asked you about it. Are you still wondering what this is all about? Wondering how this will affect your clients? Wondering how this will affect your business?
The provision allows COBRA/State Continuation premium assistance for a “period of coverage” after the enactment date of the February 17, 2009. The premium assistance is available for health plans that are standard COBRA eligible except for Flexible Spending under a Section 125. Medical Plans, Dental Plans, Vision Plans, HRA Plans and Prescriptions Only Plans will be among the common plans to be offered with the premium assistance.
The premium assistance provides a COBRA premium reduction of 65% for Assistance Eligible Individuals (AEI), for up to 9 full months. The AEI will pay 35% of the total premium; the employer will pay the remaining 65% and will obtain a credit for that portion (and for payment of payroll tax withholdings) by filing IRS Form 941. While this may present a cash-flow issue for your clients, this mandated scenario does not create a material hard cost/loss.
AEIs are Qualified Beneficiaries (QB) who have experienced a loss of coverage due to an Involuntary Termination between September 1, 2008 and December 31, 2009. QBs who experienced a Qualifying Event on September 1, 2008 or after who subsequently did not elect, or stopped paying the COBRA premiums, are eligible for an extended election period which ends 60 days after the re-notification is provided to the QB. For individuals who newly elect the premium assistance coverage will begin March 1, 2009, as there is no reach back to gain coverage for the months before the provision was set in place.
There are limitations for those with incomes over $125,000 for single or $250,000 filing jointly; for these taxpayers the subsidy must be considered taxable income for the year in which the subsidy was received. At the time of notification each AEI must determine whether to receive the subsidy or waive the subsidy based on their income.
Premium assistance will cease on the earliest of these: the 9 month maximum has been reached or the original COBRA eligibility end date has arrived, or will cease if the AEI becomes eligible under another Group Health Plan or Medicare.
With all of these provisions come additional administrative and compliance guidelines that clients will have to handle. First, there is the research and monitoring of the DOL and Department of Treasury websites to ensure they are in compliance with the what, how and when. Second, there is the actual notification and re-notification to AEI. Finally, there is the managing the AEI elections and waivers, along with managing premium reimbursements. At the same time there is a real possibility that we will see a large influx of COBRA participants due to the economics of the premium subsidy and the prospect of adverse selection to cover existing medical costs.
This is an opportunity to ensure that you are indeed a cut above the rest. This is the time to reach out to your clients and to assist them. Keep in mind that some will choose to be experts on the provision. This might be a time to rethink the role you are playing...perhaps this presents you with the opportunity to move the role and thus the workload surrounding COBRA over to a COBRA service provider, making it possible to refocus your efforts on your core business. Like others, you may choose to rely on experts, experts who have gained your confidence and trust, experts who can handle the premium assistance along with the standard COBRA and State Continuation regulations.
At this point, with the near panic and heightened concern that have set in, some Third Party Administrators (TPAs) could certainly use scare tactics and bring in some extra revenue. After all, the client will be at their mercy. However any TPA with a genuine concern for the client will ensure that these AEIs are properly notified of their eligibility for premium assistance, and will do so by taking as much of the workload from the employer’s human resources department as possible.
Indeed, sometimes the administrative burden can seem to outweigh the true reason behind the premium assistance provision… Especially then we can play a significant, positive role.
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AgriPlan/BizPlan Section 105 Plans from TASC
 Strengthen your competitive edge and offer your clients considerable tax savings with Section 105 plans by Total Administrative Services Corporation (TASC).
Under Section 105 of the Internal Revenue Code, business owners may deduct 100% of all medical costs as a business expense. In fact, TASC estimates that your clients can save $2,500 in taxes each year by using the AgriPlan/BizPlan. As an AHIA member and account representative, you can receive a 50% discount on the compensated Provider fee for this product.
If you have any questions or want to learn more about the AgriPlan/BizPlan product, visit www.tasconline.com or contact TASC sales at (800) 422-4661.
For information on other AHIA products and services visit www.ahia.net/store.
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 AHIA – NAIFA Health & Employee Benefits Kudos
AZ Health Chair Henry GrosJean was featured in the Phoenix Business Journal describing his active role influencing the state legislature.
NUMEROUS MEMBERS:
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 Mark Your Calendars
AHIA Online Forum Series
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 the Role of the Advisor
AHIA President- Elect Bill Foudy was recently quoted in the Agents Sales Journal March cover article, Counseling the Economic Casualties: How Health Agents Can Help After Job Loss. Foudy discussed the significant role agents play when it comes to discussing policies with clients, specifically COBRA. Foudy stressed that as an agent it is important to step in confidently and affectively after hearing a client or prospect lost their job. Foudy believes that knowing details and strategies is important because while clients have a general idea of what COBRA offers, they don’t often understand the specific procedures or time limits related to their options and responsibilities.
To view the complete article visit www.agentssalesjournal.com.
Also featured in the press:
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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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