Thanks to all NAIFA members who shared their opinions about the Supreme Court’s decision to uphold the health care law. Unfortunately, whether our members support any opinion of the US Supreme Court or not – the Court has the final say.
NAIFA’s statement on the decision did not support the ruling - rather it acknowledged the Court’s authority, and the clarity of its ruling in helping us identify how the law negatively impacts agents and their clients. Just because something is ruled constitutional does not make it a good law. We will continue to share with the media and on the Hill our data that show how agents and consumers are negatively impacted by the Medical Loss Ratio. Like you, NAIFA also remains concerned with many of the provisions including the tax provisions and the affordability of insurance.
NAIFA’s health care reform strategy is to pursue legislation that modifies the health care law and we have set out our priorities, based on effective dates of provisions.
Remove agent commissions from the medical loss ratio (MLR)
- Repeal the CLASS Act
- Raise or remove the contribution cap for flexible spending arrangements (FSAs)
- Reverse the 3.8 percent tax on unearned income (including annuities)
- Enhance HSA and FSA use
- Create purchase incentives
- Build on the employer-based system
- Reduce consumer costs
The House is expected to (again) pass a complete repeal of the health care law and the Senate is not likely to do so. The Senate simply does not have the votes to completely repeal the law and the President said he would veto a complete repeal which would then require a 2/3 majority in both the House and the Senate to override the presidential veto (those votes don’t exist). The 2012 elections may improve the chances of a complete repeal. Unfortunately, we do not have the luxury of time on our side. Our agents are seeing their commissions cut by 50 percent as a result of the MLR provision that went into effect on Jan. 1, 2011. The provisions phase in from 2010 to 2018. NAIFA will work to identify and repeal/revise the most dreadful provisions based on their effective dates. Thus, the MLR is top on our list.
While chipping away the more onerous provisions is a slow process, we are having some success:
- Expanded 1099 requirements - Repealed
- NAIFA-backed MLR corrective legislation - NCOIL & NAIC support, over 200 co-sponsors
- CLASS Act – Suspended by HHS
- Free Choice Vouchers - Eliminated
- CO-OP program’s - Budget cut
The legislative and regulatory processes are both daunting. Understanding the different role each body possesses, NAIFA will submit comments to the IRS on Notice 2012-40 Health Flexible Spending Arrangements urging for a carryover of $2,500 into the next plan year which is within its authority, while at the same time requesting Congress to eliminate or at least raise the cap on FSA contributions which would require a legislative fix. Some may look only at the IRS comments and conclude that we support the FSA cap. This simply isn’t true. The IRS does not have the authority to change the law. Thus, until we are successful in changing the law, NAIFA will make all attempts to improve the law protecting the role of the agents and the clients they serve.
NAIFA’s goals have been and continue to be ensuring affordable coverage for all Americans. NAIFA supports bipartisan efforts to improve affordability and sustainability of private insurance choices, and to ensure that consumers have access to professional services provided by licensed and regulated insurance agents.
