- Second in a series of four webinars –
This session will be recorded
John Prible,VP Federal Government Affairs
Independent Insurance Agents & Brokers of America
The Role of Independent
Insurance Agents and Brokers
• 62% of agencies sell health insurance.
• Breakdown of sales:
o 15%Large Group Policies (51+ employees)
o 25% Individual Policies
o 60% Small Group Policies (2-50 employees)
Source: IIABA Member Survey; March 2009
A Timeline of the Health Care
Provisions that could affect you.
As you can see from the summary, implementation of the new
bill will generally phase in between 2010 and 2014.
HHS is already beginning on working on regulations for
Many of the provisions in the law, however, are left to be
implemented by individual states (especially the creation of
regulation of the new Exchanges).
We expect a great deal of confusion by customers, industry,
and even state officials as implementation unfolds.
No lifetime benefit limits and restricted
Required to carry dependents up to
the age of 26.
New MLR restrictions. Individual Mandate.
CLASS Act. Employer “Mandate”.
Small business premium tax credit New rating bands.
Impact on Individuals and
A new health care world.
A new way of doing business.
Small business premium tax credit
• Applies to employers with 1-25 employees
• Employer must pay at least 50% of health care premium
• Credit based on number of employees and
average annual wages per FTE
• Employer and family members not included in eligibility
• Premium credit reduces tax deduction of premiums
Implications on the bottom line for
New New Fees on
Medical Loss Insurance
Ratio (MLR) Companies
Squeeze ($14.3 billion
Thin Margins for
Impact on Employers
Employers with 50-plus full-time (30 hours per week or more) employees are subject to the following:
If an employer does not offer health insurance and has at least one employee who qualifies for a tax credit, the
employer is subject to an annual fine of $2000 for each full-time employee.
If an employer does offer health insurance coverage but has an employee who goes to an exchange (because the
employee’s share of the premium exceeds 9.8% of their annual income) or if the employer fails to offer the
minimum health insurance coverage, the employer is subject to an annual fine of $3,000 per employee going to
an exchange (maximum penalty is $2,000 for each full-time employee in your total workforce).
If an employer does offer health insurance coverage, the employer is required to offer a voucher to employees
with incomes less than 400% FPL and whose share of the premium exceeds 8% but is less than 9.8 of their
annual income who decide to enroll on a plan in an exchange. The voucher is equal to what the employer would
have paid for the employee’s health insurance coverage. (CBO: 1-2 million employees would jump from
employer coverage to the exchange.)
Employers may not impose a waiting period before their employees can enroll in coverage of longer
than 90 days.
Employers with 200-plus full-time employees must automatically enroll their employees into health
Confusion for Employers – Where do they
turn for help?