The clock is ticking for independent agents to make sure their clients are prepared to comply with coming reforms to the nation’s health insurance system.
Despite the Supreme Court’s ruling on the law, some say it’s challenging to provide detailed advice to clients because the federal government has yet to release much of its anticipated regulations on how the Patient Protection and Affordable Care Act (PPACA) will look in practice.
“We are still lacking so much guidance and there is still so much uncertainty about how the law will get implemented on a state-by-state basis,” says Brian Gillette, chief operating officer of Group Benefits, Ltd. in Urbandale, Iowa.
One of the most-pressing matters is helping employers to decide whether or not to continue offering insurance to workers in 2014, when individuals and small companies are expected to be able to purchase coverage through state or federal exchanges.
The exchanges are intended to be shopping centers for health insurance, but how they will actually operate remains to be seen. It is unclear what role—if any—agents will have to advise buyers in the exchanges.
States have until Jan. 1, 2013 to get their exchange certified by the Department of Health and Human Services—and if they don’t, the federal government will intervene. Most states have yet to establish an exchange.
Agents say they’re also under a tight schedule to guide clients, who will likely make decisions about their 2014 benefits next year, if not sooner.
“We’re just 18 months from 2014,” says Becky Parker, health reform manager at MHBT Inc., based in Dallas. “We can’t wait any more time to start putting these long-range [company benefits] plans into place.”
The decision of whether or not to keep benefits has financial and cultural implications for a company, she says. Employers need to consider a range of potential effects, such as those on company turnover, morale, workers compensation coverage and payroll taxes.
“They really need to be having the hard conversations internally with their management about whether they’re going to maintain coverage,” Parker adds.
Gillette says he’s surprised that some of his large commercial clients are considering dropping coverage in 2014 and instead giving a pay raise to employees, who could shop for insurance in an exchange. Employers with 50 or more full-time workers would be subject to an annual federal penalty, if they don’t offer coverage and at least one employee is eligible for a tax credit subsidy under the law’s employer mandate.
“One of the questions we’re actually getting is, ‘Help me do the math on how much I’ll have to pay on a penalty versus what I’m paying today just to have coverage,’” he adds.
Gillette also notes there are “a lot of nuances in the law” and his firm would prefer to have better federal guidance to make a precise calculation for clients.
Parker also says there are many “what-if scenarios” that need to be addressed in federal regulations.
Under the law, the waiting period for new employees to become eligible for benefits cannot exceed 90 days. While “that sounds so cut and dry,” she notes there are questions that need to be answered.
“What if somebody was working for you on a temporary basis, does that count as [part of] their 90 days?” she asks.
As agents wait for guidance to such situations, they say they’re providing as much information as they can to clients, noting that they’ll deliver more detailed direction after they thoroughly analyze the regulations when they’re released.
“We would rather be right than first,” Gillette says. “We want to be able to provide solid guidance.”
In addition, Bill Daly, vice president of employee benefit plans at Allen & Stults Co., says it helps to provide a personal touch when helping clients understand their coverage. It’s common for him to receive phone calls from employees of clients, some of which look to the Hightstown, N.J., firm as their human relations resource.
“We’re using the same system that they’re using,” he says, noting that clients view the firm’s agents as both insurance professionals and consumers. “It’s a great tool to be able to tell my family’s stories of claims and listen to their family’s stories of claims, and to be able to discuss how things work. I think that adds a lot of assistance to the customers and to the clients when you have the time to sit down for 20 minutes and say, ‘This is what we have and this is what we know and these are the uncertainties.’”
Even after the court’s ruling, clients are asking if the law will change or be repealed, depending on the outcome of this year’s elections.
“There’s a possibility,” he says. “But we have to follow the rules and regulations that we have right now.”
Victoria Goff (firstname.lastname@example.org) is IA online editor.
IN&V first caught up with Daly, Gillette and Parker in April before the Supreme Court issued its decision to uphold nearly all of the health care law. Read that story to find out other ways they’re helping clients.